Axent Holdings Pty Ltd t/a Axent Global v Compusign Australia Pty Ltd

Introduction 1 This proceeding involves the construction, validity and, if valid, the alleged infringement of a patent titled "Changing Sign System" (Patent). The Patent is Australian Patent No. 2003252764. For the reasons stated hereafter, Axent has not made out its case of infringement by the respondents. The respondents established that the Patent was wholly invalid for lack of inventive step. 2 Axent Holdings Pty Ltd (trading as Axent Global) is the registered proprietor of the Patent. It is the applicant/cross-respondent in these proceedings. Axent is an electrical engineering company specialising in the design, manufacture, supply and support of LED-based visual communication systems, including electronic speed signs on Australian roads. Axent operates from a purpose-built facility in Clayton in metropolitan Melbourne. 3 Compusign Australia Pty Ltd and Compusign Systems Pty Ltd (together referred to as Compusign) also manufacture and install LED-based displays for the traffic control industry in Australia. In the proceedings, the two companies are the first and third respondents, and Compusign Australia is the first cross-claimant. Compusign Systems was incorporated on 15 January 2013 some years after the incorporation of Compusign Australia. Compusign, which has a factory in Victoria, also provides service and maintenance for Compusign products throughout Australia. 4 Hi-Lux Technical Services Pty Ltd, which is the second respondent and the second cross-claimant in the proceedings, provides a range of products to the traffic signal industry and government departments throughout Australia. Hi-Lux has a purpose-built office and manufacturing facility in Thomastown in metropolitan Melbourne. 5 In an originating application and statement of claim filed on 2 December 2016, Axent alleged that Compusign Australia and Hi-Lux had infringed all the claims of the Patent. Compusign Systems was joined as a respondent on 24 May 2017. Axent sought declaratory, injunctive and other relief, including damages or an account of profits. 6 In cross-claims filed on 14 February 2017, Compusign Australia and Hi-Lux alleged that all the claims of the Patent were invalid. Both respondents pleaded that the invention as claimed was not novel or fairly based on the matter described in the specification, and lacked inventive step. They pleaded non-compliance with s 40(3) of the Patents Act 1990 (Cth) in that the claims were not clear and succinct. Hi-Lux also alleged that the Patent was invalid on the ground that the invention as claimed had been secretly used by the patentee in Australia before the priority date of the claims. Only some of these grounds were, however, pursued at the hearing, and Axent denied that the Patent was invalid in any respect. 7 In its Amended Defence, Compusign admitted that: (1) between 22 April 2004 and July 2013, Compusign Australia had imported into Australia components for, and had manufactured, promoted, sold, supplied, repaired and replaced in Australia, variable speed limit signs for traffic control on roadways; (2) from July 2013, Compusign Systems had undertaken the same activities; and (3) it did not have any licence, authority or consent from Axent to supply these products. Compusign also alleged that, if the Patent were valid: (1) any infringements before 2 December 2010 were statute-barred by virtue of s 120(4) of the Patents Act; (2) by reason of the amendment of the complete specification of the Patent, by operation of s 115(1) of the Patents Act, no pecuniary relief is available for any alleged infringements of the Patent before the amendment (i.e, 22 August 2011); (3) Compusign Australia was making or had taken definite steps to make a product as claimed, by reason of its use of the Compusign prototype before the priority date and, accordingly, pursuant to s 119 of the Patents Act, Compusign would not infringe the Patent; (4) Compusign was not aware that the Patent existed before about 16 September 2016, when it received a letter of that date from Axent's solicitors enclosing a copy of the Patent, with the result that any damages for infringement before that date ought to be refused under s 123 of the Patents Act; (5) any exploitation of the Patent by Compusign was by, or authorised in writing by, an authority of a State for the services of that State, such that the exploitation was not an infringement of the Patent by reason of s 163 of the Patents Act; (6) due to Axent's non-payment of fees, the Patent ceased on 7 October 2015 and was not restored until 15 September 2016, with the effect that by operation of ss 223(10) and 143(a) of the Patents Act and reg 13.6(1) of the Patents Regulations 1991 (Cth), Axent was unable to bring infringement proceedings in respect of the period when the Patent had ceased. 8 In its Amended Defence, Hi-Lux admitted that: (1) in Australia, it had manufactured, sold and supplied, offered to sell and supply, and kept for those purposes, products that it described as variable speed limit signs (including versions with pre-programmed displays and that its customers programmed); and (2) it had no licence, authority or consent from Axent to supply these products. 9 In its Amended Defence, Hi-Lux relied on ss 119, 120(4), 143(a), 163 and ss 223(10) of the Patents Act, and reg 13.6(1) of the Patents Regulations with respect to Axent's non-payment of fees. Besides this, its Amended Defence also included the following, at [18(c)-(e)]: (c) It says that Axent has pleaded in the alternative that each of claims 1 to 28 is a product claim, and a method claim, and that the proper construction of each claim remains unclear … (d) It says further that various integers of claims 1 to 28 are unclear, as detailed in its cross-claim; and (e) It sets out in Annexure A to this defence a list of features that it admits that its Hi-Lux VSL Signs have. 10 In a Reply filed on 15 March 2017, Axent specifically denied that Compusign's exploitation of the Patent was an exploitation by a State or an exploitation authorised in writing by a State for the services of the State, although it admitted that: … VicRoads or the Roads Corporation of Victoria:- a) was at all relevant times until 1 July 2010 a statutory corporation established under the Transport Act 1983 (Vic); b) is and has been since 1 July 2010 a statutory corporation established under the Transport Integration Act 1983 (Vic); and c) is and has at all relevant times been an authority of a State within the meaning of that phrase in section 163 of the Patents Act[.] 11 On 24 May 2017, the Court ordered that issues of liability be heard and determined separately from and in advance of issues of the quantum of any pecuniary relief. Only issues of liability therefore arose at the hearing, which was held on 23, 24, 26, 27 and 30 April 2018, 1 and 2 May 2018, and on 17 October 2018. 12 In an attempt to identify and resolve the parties' ongoing difficulties with one another's conduct of the litigation, the court made orders on 24 May 2017 for the filing of position statements, first on infringement and secondly on invalidity. Axent filed an amended position statement on infringement on 28 July 2017, while Compusign filed a position statement in response on infringement on 18 July 2017. Hi-Lux filed its position statement in response on infringement on 17 July 2017. The parties also exchanged position statements on invalidity. 13 Compusign's responsive position statement on infringement clarified its position as follows: 4. From about 22 April 2004 and until about July 2013, [Compusign Australia] imported into Australia components for and manufactured, promoted, sold, supplied, repaired and replaced in whole or in part in Australia variable speed limit signs for traffic control on roadways (the Compusign Products). 5. From about July 2013, [Compusign Systems] has imported into Australia components for and manufactured, promoted, sold, supplied, repaired and replaced in whole or in part in Australia the Compusign Products. 6. The Compusign Products were so designed, made and/or supplied from time to time by the Compusign Parties for specific traffic works and projects in accordance with technical specifications of road authorities and other third parties. The products are made specifically for each such project in accordance with the technical requirements of that project. … 23. As shown in the table in Annexure 1, the supply of the Compusign Products for the listed road projects occurred before 2 December 2010 (being six years before these proceedings were commenced). … [T]he Applicant asserts that supplies of signs for the Clem 7 project occurred in 2011 and 2012. However, contrary to that assertion, Compusign Australia supplied the Compusign Products in around March 2009 and not in 2011 or 2012. 24. Accordingly, any alleged infringements of the claims of the Patent by [Compusign Australia] before 2 December 2010 are statute-barred by operation of section 120(4) of the Act. 25. As Compusign Systems was not incorporated until January 2013 and did not commence selling Compusign Products until about July 2013, this time-bar only applies to alleged infringing exploitation of Compusign Products by Compusign Australia before 2 December 2010. Annexure 1 set out the various projects for which Compusign had designed and supplied the relevant signage products. 14 The parties filed an agreed statement of issues on infringement (agreed infringement issues) and an agreed statement of issues on invalidity (agreed invalidity issues) on 17 April 2018. The agreed infringement issues listed some but not all the issues that were the subject of argument in submissions and at the hearing. 15 I note here that in the agreed infringement issues document, Axent also identified issues that it said had not previously been raised and that its evidence did not address, but it did not in substance renew this complaint at the hearing. Rather, Axent addressed the issues in dispute between the parties in opening and closing submissions. There was no apparent basis for any contention to the effect that Axent was unfairly prejudiced in doing so.

Overview of the patent 16 The Patent claimed an earliest priority date of 4 October 2002 (priority date), being the date on which a provisional application was filed. The application for the Patent was filed on 6 October 2003. The Patent was granted on 26 June 2008. 17 Save for any issues that may arise under s 138 of the Patents Act, issues of infringement and validity are to be determined under the Patents Act, in the form in which it existed on the date of application. This was prior to, among other Acts, the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth) (Raising the Bar Act). So far as any issue under ss 22A and 138 of the Patents Act is concerned, these provisions apply in their form as at the date on which application is actually made for the revocation order: see AstraZeneca AB v Apotex Pty Ltd [2014] FCAFC 99; 226 FCR 324 at [182]-[184] (AstraZeneca FCAFC); Apotex Pty Ltd v Warner-Lambert Company LLC (No 2) [2016] FCA 1238; 122 IPR 17 at [7]. 18 In 2009, after the Patent was granted, Axent applied to amend the specification, including some of the claims of the Patent. The Roads Corporation (a predecessor to VicRoads) unsuccessfully opposed the application. IP Australia granted Axent's amendment application on 29 June 2011: see Roads Corporation v Axent Holdings Pty Ltd [2011] APO 43. 19 Axent did not pay the renewal fees for the Patent by 6 October 2015, as it was required to do. Nor did Axent pay these fees within the additional period of grace for which the Patents Regulations provide. The fees were treated as paid in September 2016. As will be seen below, the parties contested the duration of the period in which the Patent ceased to be registered for non-payment of fees.

The background to the invention 20 The invention the subject of the Patent is said to relate to a changing sign system for use as a variable speed limit sign on roadways. The specification explains: Existing speed signs, which are typically static, have to be a black number on a white background with a red outer circle (annulus) using reflective material. (In accordance with Australian Standards, as incorporated herein by reference.) This style of sign is important and particularly the annulus. If speed sign structures were allowed to have varying forms, users of the roadways would not be able to identify the sign as a speed sign. … It is therefore imperative to retain speed signs within this narrow defined structure. The applicant has recently developed new technology and manufactured and operated variable speed limit signs (VSLS) in Australia, which incorporate a flashing annulus to comply with the Australian Standards and the law in respect of a regulatory traffic device. The VSLS are electronic and typically incorporate the use of white light emitting diodes (LEDs) to form the number, red LEDs to form a plurality of outer rings which together form the annuls [sic] and a static black background. VSLSs can be used alongside roadways or bridges … where there is a likelihood of a change in road condition, such as high wind or sun glare. Instead of a normal maximum safe speed indication of, say, 100 kilometres per hour a hazard lower maximum speed can apply. The VSLS would be switched to the lower maximum speed when a certain wind speed is detected or the sun happens to be at the most distracting level. 21 The specification emphasised the need for the driver of a vehicle on a roadway to be "not only aware of the lower determined speed limit but also aware that this is a lower limit due to a hazard so that the driver also drives with extra caution in case of the lower determined speed limit not being sufficiently low". The specification noted possible solutions included "a second light such as a flashing amber hazard light where the flashing is caused by a rotating shield around the light such as often used on towing vehicles or used with blue and red lights on emergency vehicles". Another possible solution "is to use variable message signs (VMS) to display speed related messages". As to the first possible solution, the specification stated: [T]he use of a second light increases the installation wiring and costs. Further there is the high likelihood of a misunderstanding by the driver since there is no shown connection between the two lights. This misunderstanding is increased since the two lights must be sufficiently spaced to be clearly seen separately and will need to be spaced sufficiently to avoid the glare of one blocking the other. Regarding variable message signs, the specification stated: This will need a much larger sign so that it can display a plurality of alphanumeric characters and must be programmed. Further it is necessary to scroll through a message and therefore must be repeated. The timing of the scroll might not be sufficient for all roadway users to read at the time they are passing the sign. Further, the reading of the sign is a distraction to driving in a similar manner to the use of mobile telephones while driving, this distraction could be increasing the number of road accidents rather than the intention of the sign advising of hazards to decrease the number of road accidents. Still further, the costs of variable message signs can be ten times the costs of single image signs. 22 The specification advised that the object of the invention was: .. to provide an improved variable speed limit sign, which fulfils the requirements of showing a lower maximum speed limit but also advising of the hazard while maintaining the restrictive requirements of being identifiable as a speed limit sign. 23 The specification described embodiments of the invention, which find expression in claims 1, 17 and 20. There is also an independent omnibus claim in claim 28. 24 In respect of the embodiments, the specification explained: It is to be understood that one of the possible speed limit displays is a "blank" sign, indicating no fixed speed limit other than the maximum in the given jurisdiction. In one aspect the annulus is formed by three to five outer rings of light emitting structures and the change of conditions is indicated by flashing some of those outer rings while always retaining one ring on to fulfil the criteria of being a speed display sign by always showing a number in a circle on a display panel. Generally the central numeric displaying area is formed by a plurality of white light emitting diodes while the annulus is formed by red light emitting diodes and the display panel forms a black background. Preferably, the display panel is included with a frame. The criterion to which the control means responds can be an external sensor such as a wind sensor, light sensor or the like. In another form there can be a programmed time and speed limits such as usable at time-defined hazards such as schools or sunset. In a further embodiment, the criterion could be receipt of an external signal from a control centre such as a freeway control centre or the like. The response is then made according to the input criteria and selects one of at least two possible speed limits and varies part of one or more of the display panel, the central numeric displaying area or the annulus. 25 The embodiments were described in the specification by way of two drawings. Figure 1 was said to be a diagrammatic view of a changing sign system in accordance with an embodiment of the invention in one state of display. Figure 2 was a diagrammatic view of a changing sign system in accordance with the embodiment of Figure 1 in a second state of display. 26 With reference to Figure 1 and Figure 2, the specification continued: Referring to the drawings there is shown a changing sign system for use as variable speed limit sign (11) on roadways. The sign includes a frame having a front square display panel (21). A central numeric displaying area (25) is formed on the display panel (21) by a plurality of light emitting structures (29) which when activated can display a selected one of at least two possible speed limits. An annulus (27) is formed by a plurality of outer circles on the display panel (21) around the central numeric displaying area (25) by a plurality of light emitting structures. A control means (not shown) is included in the changing sign system (11) for selecting the selected one of at least two possible speed limits which is 80 kilometres per hour in Figure 1 and 50 kilometres per hour in Figure 2. This speed limit is changed according to an input criterion and varies in this embodiment the annulus (27). The annulus (27) is formed by four outer rings of light emitting structures and the change of conditions is indicated by flashing some of those outer rings while always retaining one ring on to fulfil the criteria of being a speed display sign by always showing a number in a circle on a display panel. The central numeric displaying area (25) is formed by a plurality of white light emitting diodes while the annulus (27) is formed by red light emitting diodes and the display panel (21) forms a black background. The changing sign system (11) thereby fulfils the criteria of being a speed display sign by always showing a number in a circle on a display panel while being able to indicate a selected one of at least two possible speed limits and while simultaneously indicating a change of speed limits and therefore a change in conditions by the varying of part of one or more of the display panel, the central numeric displaying area or the annulus. 27 The specification further stated that: The fabrication and supply of all components for the changing sign system of the invention shall be in accordance with all relevant Australian Standards or, in the absence of same, with appropriate international standards. All installation works, where necessary, shall conform to the relevant road authority specifications that are in force from time to time. Examples of such specifications include VicRoads specifications for installations in Victoria, Australia. The following related specifications and standard drawings are defined and incorporated herein by reference: i. Manual of uniform traffic control devices, Part 2: Traffic control devices for general use AS 1742.2 and particularly Regulatory Sign R4-1 ii. Road Signs - Specifications AS 1743 iii. Degrees of Protection provided by enclosures for electrical equipment (IP code) AS 1939 and particularly IP55 iv. SAA Wiring Rules AS 3000 v. Colour Displays Section 2 and section 3.2.2 of AS 2144 vi. Electromagnetic Compatibility - Generic Emission Standard AS/NZS 4251 vii. Approval and test specification - Electric cables - Thermoplastic insulated for voltages up to and including 0.6/1kV AS 3147 viii. Approval and test specification - General requirements for electrical equipment AS 3100 ix. Retroreflective materials and devices for road traffic control purposes, Part 1: Retroreflective materials AS 1906.1 x. Road Rules - Victoria and particularly Rule 21 xi. VicRoads Guidelines "Variable Speed Limits on Freeways (Draft) xii. VicRoads Traffic Engineering Manual, Volumes 1 and 2. 28 The specification described the materials from which the sign and support structure were to be constructed, including that the "display face": … consists of a red annulus on a black background with white numerals within the annulus. The numerals are centrally located within the red annulus. When displaying other than the normal speed i.e., 100 km/h the sign is capable of flashing part of the inner diameter of the red annulus. An accompanying table set forth the approximate amount of the annulus capable of flashing by reference to the dimensions of the sign. 29 The specification further stated: While the inner diameter of the annulus is flashing, the remaining portion of the outer diameter of the annulus shall remain on to retain the regulatory status of the sign. The flash rate of the annulus is fully programmable and preferably is between 50 and 60 cycles per minute. The off time is the same as the on time. The required display technology is either fibre optic display matrix or light emitting diodes (LEDs). … The sign control system permits total flexibility in the selection of time functions such as blanking times. These times are selectable through the sign controller's system configuration menu, available both locally and remotely. 30 Finally, apart from the claims, the specification affirmed that: Although this invention has been described in its preferred forms with a certain degree of particularity, it is understood that the present disclosure of the preferred form has been made only by way of example and numerous changes in the details of construction and combination and arrangement of parts can be resorted to without departing from the spirit and scope of the invention. It should be understood that the above is a description of the preferred embodiments of the invention but the disclosure of the invention is not limited to those embodiments. Clearly other variations that would be understood by people skilled in the art without any inventiveness are included within the scope of the invention.

The claims 31 As already noted, the three principal independent claims of the Patent are claims 1, 17 and 20. These claims are broadly similar in wording and structure, and describe an electronic variable speed limit sign, which has a plurality of lights forming the central speed limit numerals and the annulus rings around those numerals. The three principal independent claims also specify that there must be a variation of that display when a speed limit other than a "normal speed limit" is being displayed. Claim 2 is dependent on claim 1. As stated already, claim 28 was an independent omnibus claim. 32 Claims 3-16 are dependent on claims dependent on claim 1 or claims within this group, which themselves are dependent on claim 1. Claim 18 is dependent on claim 17. Claim 19 is dependent on claim 18. Claim 21 is dependent on claim 20. Claim 22 is dependent on claim 20 or 21. Claim 23 is dependent on claim 20 or other claims dependent on claim 20. Claims 24, 25 and 26 are dependent on claim 23, which is in turn dependent on claim 20 or on other claims dependent on claim 20. Claim 27 is expressed as a changing sign system according to any one of claims 20 to 26, in which the display system is included with a frame. 33 These twenty-four dependent claims describe a range of variations in the signs. For example: claims 2, 3, 18, 19, 21 and 23: specify that the relevant variation of the display is to be a flashing of a portion of the annulus; claims 4, 6 and 8: specify the proportion of the annulus thickness that is flashed; claims 5, 7 and 24 to 26: specify the dimensions of the sign face; claims 9 and 10: specify the frequency of the flashing; claims 11 and 22: specify the colours of the display components, and the use of light emitting diodes; claims 12 and 13: specify the use of an external sensor to provide an input to the control means; claims 14 to 16: specify the nature of an external signal; and claim 27: specifies the inclusion of a frame.

Axent's evidence 34 Axent filed the following affidavits, which, save for successful objections, were admitted in evidence: the three affidavits with annexures of Geoffrey Francis Fontaine affirmed on 18 September 2017, 12 December 2017 and 19 April 2018; the four affidavits of Stephen Bean sworn on 11 October 2017, 1 December 2017, 28 February 2018 and 19 April 2018; the two affidavits of Peter Slavko Cestnik sworn on 18 September 2017 and 13 December 2017; the two affidavits of Michael Zammit sworn on 12 December 2017 and 19 April 2018; the three affidavits of Charles Leonidas sworn on 18 September 2017, 2 February 2018 and 12 April 2018; and the four affidavits of Sachin Prasad affirmed on 16 November 2017, 28 February 2018, 12 April 2018 and 25 April 2018. The respondents chose not to press their objections to Mr Leonidas's affidavits of 2 February 2018 and 12 April 2018, "as a matter of expediency". There was limited additional evidence in chief given at the hearing. Mr Fontaine, Mr Bean, Mr Cestnik, Mr Zammit, and Mr Prasad were cross-examined. 35 Issues concerning the admissibility of other evidence are discussed at the end of these reasons. These issues include the admissibility of a 3 November 2017 affidavit of Axent's solicitor, Mr Leonidas, which Axent sought to tender during the hearing on 1 May 2018. The affidavit had originally been filed in support of an application by Axent for further and better discovery, and its tender at the hearing was subject to the respondents' objection. As will be seen, Axent ultimately sought to tender annexures to the affidavit as in a list that it prepared. For the most part, these annexures comprised letters passing between the parties' solicitors. A further issue arose in relation to the admissibility of a 30 April 2018 affidavit sworn by Mr Leonidas, which is also discussed below. 36 I also note that, on 30 April 2018, midway through the hearing, Axent tendered four affidavits of discovery that had been sworn by Mr Sozio, on behalf of Hi-Lux, on 25 September 2017, 11 October 2017, 4 December 2017, and 1 March 2018 respectively, without objection by the respondents. Nothing apparently turns on any of these four affidavits. 37 The following is a necessarily incomplete overview of the evidence in the proceedings, set out by reference to the principal witnesses.

Geoffrey Fontaine 38 Mr Fontaine, who was Axent's managing director and sole director, claimed to be the inventor of the invention the subject of the Patent. His evidence was that, as at September 2017, he had been running companies supplying electronic signage for over 30 years, although he had no formal qualifications as an engineer. From 1998 until the establishment of Axent in March 2001, his "principal trading entity" was Symon Australia Pty Ltd. 39 Mr Fontaine's evidence was (and I accept) that Symon Australia designed, engineered and supplied signage for various roads and railways in Victoria, New South Wales and Queensland. Symon Australia also supplied LED lighting for road signage. Mr Fontaine's evidence was that the business of Symon Australia was transferred to Axent when Axent was established in March 2001. At its Clayton facility, Axent designs and constructs the signage and visual communication systems that it sells, including the variable speed limit signage system that is the subject of the Patent. 40 In his 18 September 2017 affidavit, Mr Fontaine explained, and I accept, that the market for speed sign systems in Australia included supply to government authorities, such as VicRoads, and non-government authorities. In relation to VicRoads, Mr Fontaine deposed, and I accept as consistent with the evidence of other witnesses, that: … funding is often project based, for example, for the building or upgrading of a road or freeway, or for the installation of school zone signage throughout Victoria. For such projects VicRoads seeks competitive tenders. It also has preferred suppliers. VicRoads prepares various specifications for the products and systems that it seeks to have supplied to it. … VicRoads has internal processes for the approval of the products and systems supplied to it as well as for the approval of its suppliers themselves. It is possible for a supplier to obtain a type approval for their product or system, so that they can supply it on an ongoing basis without having to go through an individual approval for every tender or contract. The process of obtaining type approval involves submitting a range of technical documentation and often product testing also. If a type approval is not in place then the relevant documentation is usually a requirement of the tender or contract itself, including certification that the relevant VicRoads technical requirements are met. 41 Mr Fontaine acknowledged in cross-examination that he was aware in 2000-2001 that VicRoads had the type approval system to which he referred in this passage. He accepted that in order to supply a product to VicRoads it was "advantageous" to have a type approval for the product, and that there was generally a need to demonstrate that the product met the relevant VicRoads specifications in order to gain type approval. Mr Fontaine deposed that, in his experience, the supply of variable speed limit sign systems involved: (a) the initial manufacturer or supplier of the signage system; (b) a third party or parties (with whom that manufacturer contracts) supplying the system to an end user; and (c) end users (such as VicRoads) that own or manage the roads on which the signage system operates. 42 Mr Fontaine gave evidence that he had developed a variable speed limit sign using LED lights from around June 2000, and that this had involved the design and construction of a prototype sign from the "ground up", beginning with the desired features and functions it needed to perform. This was, he said, a time-consuming process given the software and manufacturing conditions of the day. His evidence was that all the various components of the sign had to be located, obtained, made and tested in order to ensure the sign's effectiveness and visibility. He deposed that: Designing the layout and software, putting all the physical components together and connecting everything to the central processing unit (CPU) within the sign that controls the system and allows it to display differently depending on signals that the CPU receives was a very time-intensive process. The later part of the prototype's development focused more intensively on software development, after the physical components had been decided upon. There was, Mr Fontaine said, a large amount of experimentation around the width of the annulus, as well as around the positioning and brightness of the LEDs. 43 In cross-examination, Mr Fontaine accepted that Axent had supplied signs described as variable speed limit signs for the CityLink project, which went live prior to November 2001. He accepted that these were LED signs that could vary the displayed speed limit, and could be controlled by the front-end computer at the Transurban control centre. This worked in much the same way as a VicRoads control centre. He also accepted that there were communication protocols used to communicate between the signs. 44 Also in cross-examination, Mr Fontaine's attention was drawn to the following statement in Axent's November 2001 tender documents for the Western Ring Road project: Our experience and history with signs has shown us that the advantages of using an aXent product are extremely valuable. For instance, our signs are capable of having synchronised dimming, flashing and display, purely based on our Citylink experience where we provided the same and far exceeded the presentation of the product to the motorist. (Bold, italics in original) As a consequence, he accepted that some of the signs supplied by Axent for the earlier CityLink project had a flashing feature, although he went on to express some uncertainty about this after an intervention by Ms Gatford, counsel for Axent. The result was the following exchange between counsel for the respondent, Mr Smith, and Mr Fontaine: Mr Smith: Are you saying that you are certain now that the signs that you supplied for the CityLink project did not have a flashing feature? Mr Fontaine: Which signs in particular are you referring to? Mr Smith: The variable speed limit signs? Mr Fontaine: I can't recall. Mr Smith: Okay. But do you agree that your recollection would have been - of those matters would have been better in November 2001 when you approved this document? Mr Fontaine: I think that's fair to say. 45 In later cross-examination, Mr Fontaine denied that Axent had a variable speed limit sign prior to June 2000. Mr Smith asked Mr Fontaine to explain this further: Mr Fontaine: We're software and electronic engineers. It's - they're not - they were completely different products, and you're trying to make a correlation which doesn't exist. Mr Smith: How do you say that the signs you were developing from June 2000 differed precisely from the LED signs that you had supplied to the CityLink project that showed more than one speed? Mr Fontaine: Different controller, different printed circuit boards, different LEDs, different software, different firmware. The … advancement is ongoing, even today were just prolific. Subsequently, in re-examination, Mr Fontaine gave evidence that none of the signs supplied to the CityLink project had a partly flashing annulus. 46 I interpolate here that Mr Fontaine's uncertainty about whether the variable speed limit signs Axent supplied for the CityLink project had a flashing feature does not detract from his prior acceptance that some of the signs Axent provided for that project had a flashing feature (which included the lane use signs and possibly the variable speed limit signs). Prior to Ms Gatford's intervention, Mr Fontaine stated that the lane use signs provided for the CityLink project did flash, that he was unsure whether the variable speed limit signs provided for the project flashed, and that he could recall that some of the signs provided did have a flashing feature. Mr Fontaine's acceptance that some signs had a flashing feature was prompted by the reference to Axent's November 2001 tender documents, which indicated that Axent had signs with a flashing feature and demonstrated this by its provision of such signs to the CityLink project. After Ms Gatford's intervention, Mr Fontaine's statement that he could not recall whether the variable speed limit signs had a flashing feature repeated his previous answer. It did not extend to all the signs Axent provided for the CityLink project, nor to Axent's capability to provide variable speed limit signs that had a flashing feature; and, as already indicated, Mr Fontaine subsequently accepted that his recollection of whether the variable speed limit signs had a flashing feature would have been better in November 2001 when he approved Axent's tender documents. I found Mr Fontaine's answers in this instance to be evasive and that, taken as a whole, it did not seem to me that Mr Fontaine's evidence was entirely reliable, possibly because his recollection of pertinent matters had dimmed with the passage of time. 47 Mr Fontaine's evidence was that at the time Axent's variable speed limit sign in LEDs was being developed he was in contact with Mr Bean, then at VicRoads. Mr Fontaine's evidence was that Mr Bean visited Axent's premises on several occasions during this period and told Mr Fontaine that: VicRoads [was] interested in upgrading their variable speed limit signs to full LED if a suitable product could be developed … Mr Fontaine agreed in cross-examination that VicRoads had variable speed limit signs before June 2000, although these signs were fibre optic signs. He also agreed that his understanding at the time was that VicRoads required a flashing feature for the variable speed limit sign. 48 In around September 2000, so Mr Fontaine said (and I accept), Mr Bean representing VicRoads attended Axent's premises, with another VicRoads employee (who he believed was Mr Priest) to view the prototype for Axent's variable speed limit sign. Mr Fontaine said that Axent's production manager, Mr Cestnik, was also at the meeting. Mr Fontaine's evidence was that at the meeting they discussed the sign, the need for the sign to warn drivers that the speed was changing, and that there were various existing signage products with warning devices. Mr Fontaine's evidence was (and again I accept) that he told Mr Bean (who corroborated his evidence) and Mr Priest that Axent's signage could be programmed to warn the driver of the speed zone change by flashing some but not all of the rings of the annulus around the speed limit number. Mr Fontaine's evidence was that Mr Cestnik then demonstrated the modified partly flashing annulus feature and said that in future this could be controlled through software. Mr Fontaine indicated that this modification did not take a long time when he said: We had from - switches that were hardwired to the sign, and we could demonstrate a myriad of different display patterns at that time and see which one looked the best and was most effective. I interpolate here that Mr Cestnik's evidence was also broadly consistent with the evidence of Mr Fontaine at this point, although he could not recall whether the partly flashing annulus was demonstrated on that day or subsequently. It does not seem to me that anything turns on this difference. 49 According to Mr Fontaine, Mr Bean and his colleague said that they liked Axent's solution, but that VicRoads would need to be satisfied that a speed sign with that proposed feature complied with the Road Rules, and that they wanted to be sure by checking with their legal team that the sign would be regulatory (i.e., that the displayed speed limit was enforceable). Mr Bean later contacted Mr Fontaine to say that VicRoads' lawyers had advised that Axent's proposed variable speed limit sign would be regulatory. Mr Fontaine's evidence at this point is corroborated by Mr Bean. In cross-examination, in the context of the September 2000 meeting, Mr Fontaine was asked whether he was "seeking to have that product approved as an option for [the Western Ring Road] project". Mr Fontaine answered "I had a desire to have it included, but I didn't press the point". 50 In March 2001 Mr Bean told Mr Fontaine that VicRoads would shortly be advertising for expressions of interest to tender for signage for the Western Ring Road in The Age newspaper. Mr Fontaine saw the advertisement and subsequently spoke with a VicRoads representative about the tender. In early April 2001, shortly after VicRoads had called for expressions of interest for the Western Ring Road Project, Mr Fontaine met with Mr Bean, showing him the prototype variable speed limit sign and demonstrating the brightness of the white LEDs in full sunlight. Around the same time, Mr Fontaine delivered a prototype variable speed limit sign to Mr Bean at the VicRoads office, although the prototypes at the time were not connected or fully operational and still had switches on the side. At a subsequent stage in the development of the sign, these switches were reprogrammed to allow part of the annulus to flash. Mr Fontaine said that he recalled that Axent had tested various flash rates on the prototypes to see what was the most effective flash rate prior to this reprogramming. 51 Mr Fontaine deposed that sometime shortly after his meeting with Mr Bean in March 2001, a VicRoads representative told him that Axent would need to comply with a VicRoads specification for the supply and installation of electronic variable speed restriction signs; that further testing would need to be done on Axent's variable speed limit sign; and that the sign's legend had to comply with the Australian Standard and the Road Rules in place at that time. About the same time Mr Fontaine was provided with the "VicRoads Specification for the supply and installation of electronic variable speed restriction signs TCS-037-2-2001" dated April 2001 (April 2001 specification). This specification did not refer to any portion of the annulus flashing or to any need to warn of a change in speed. 52 In September 2001, Mr Fontaine met with Mr Bean and another VicRoads representative to view a demonstration of Axent's proposed variable speed limit sign with a partly flashing annulus. Mr Fontaine stated that he subsequently received the tender documents for Contract 5273 from VicRoads for a variable speed limit system on the Western Ring Road (the VicRoads Contract), which included the VicRoads specification No: TCS 037-5-2001. This specification, which I refer to hereafter as the September 2001 specification, contained a requirement, in section 4.6, that part of the inner diameter of the red annulus should be capable of flashing on and off. Mr Fontaine deposed that he had never before seen this requirement in a VicRoads specification and that he "had not been asked by VicRoads if they could include [his] invention in the 2001 specification before [he] received the tender documents". I accept Mr Fontaine's evidence in this regard, since it is consistent with Mr Bean's evidence and the two relevant specifications. 53 In relation to the inclusion of the flashing red annulus requirement in the September 2001 specification, Mr Smith, for the respondents, and Mr Fontaine had the following exchange: Mr Smith: And you knew at that time that there would be other tendering parties receiving the same specification? Mr Fontaine: I believe two others were shortlisted. Mr Smith: … And you made no complaint at that time to VicRoads about the specification of a partially flashing annulus in that specification? Mr Fontaine: No. … Mr Smith: You've never asked VicRoads to remove that requirement from their specification? Mr Fontaine: No. … Mr Smith: You knew that a document such as the one you just saw was not specific to a project? Mr Fontaine: Correct. Mr Smith: And it could form the basis of other companies' applications for type approval, for example? Mr Fontaine: Possibly. Mr Smith: And at that time you didn't consider, did you, that the partially flashing annulus was confidential to Axent? Mr Fontaine: I did. Mr Smith: In fact, you were happy that VicRoads had included it in their specification for the Western Ring Road project, weren't you? Mr Fontaine: I wasn't unhappy. 54 In his 12 December 2017 affidavit, Mr Fontaine deposed that Axent and VicRoads entered into the VicRoads Contract on 21 February 2002. The contract was relevantly for Axent to supply a complete traffic management system for the Western Ring Road, including the supply to VicRoads of its variable speed limit signs, and the development and supply of a system linking the signage and other hardware such as speed cameras to the VicRoads traffic centre in metropolitan Melbourne. Mr Fontaine further deposed that the sign had been developed prior to Axent entering into the VicRoads Contract, and was used in public for the first time at the launch of the Western Ring Road Project by VicRoads, which "went live" in December 2002. This latter evidence was contested, and I return to it hereafter. 55 Mr Fontaine's evidence was that by the time he came to supply Axent's variable speed limit sign, Axent had undertaken substantial work to optimise the performance of the sign with a partially flashing annulus. This work was undertaken to address "the size, the neatness, clarity, power consumption", and to optimise the circuit board. He affirmed that it was correct to say: [A]lthough the outward appearance of the sign did not change the Axent VSLS became much more complex in its internal workings once the partly flashing annulus was included into it. The creation of a variable flashing annulus system required numerous hardware, firmware and control software changes that took significant time, resources and cost to implement, test and fine tune by experienced and qualified electrical engineers. It required complex circuit design and changes to the SY98012B PCB, dedicated software code in C and C++ and a full understanding of complex electronic componentry including driver chips, microprocessors, power switching, connectors and LED's. The design work was intricate at that time in regard to uniformity, synchronisation, brightness control, variable flash rates on different rings, protocol changes, and much more difficult that [sic] if the equivalent task were undertaken today. 56 Mr Fontaine said in cross-examination that: … the SY98012B, which I tendered a photo [sic] in my affidavit was … the size of two cigarette packets whereas a few years earlier, it would have been the size of two shoe boxes. His evidence was that this not only made the sign more compact, it also reduced the manufacturing cost. He explained that the hardware improvements were improvements principally to the electronic printed circuit board (PCB) design, but included power supplies, cables, and connectors. It was, Mr Fontaine said: …a whole host of things that go into a new product and new PCB design and microprocessors. They were evolving rapidly during that time. …. LEDs were being refined and …. our job was to keep testing and trialling the product until we found a product that we believe was suitable for outdoor use. Mr Fontaine's evidence was that he believed these sorts of things (although not the LEDs selected) "came with the creation of the product and the software" and that the improvements that Axent developed such as the PCB design, and the software design, were confidential to Axent at the time. 57 Mr Fontaine deposed that he told VicRoads representatives about Axent's patent application in 2003. His evidence in this regard was corroborated by an email that he sent to Mr Dean Zabrieszach of VicRoads in September 2003. Mr Fontaine said that some time later Mr Zabrieszach and others from VicRoads attended Axent's manufacturing facility where Axent's variable speed limit sign was shown to them and, according to Mr Fontaine, "we spoke about the patent". When giving evidence about this matter in chief, Mr Fontaine added, self-servingly it seemed to me, "I didn't think that there wasn't anybody who didn't know about the patent, to be honest, thereafter". Mr Fontaine went on to say: … I don't think there would be one person within VicRoads over a period of a decade that didn't know I had a patent either by way of telephone call, email, letter, tender submission, document, manual and general industry knowledge. 58 Mr Fontaine's evidence was that Axent had successfully tendered for a number of other VicRoads contracts after the Western Ring Road Project, including Contract 5822 (for the supply of the signage in school zones throughout Victoria). He also said that Axent supplied its variable speed limit sign to other parties from 2003 onwards, although sales decreased from 2008 coincident with other suppliers releasing competing variable speed limit signs. 59 Mr Fontaine's evidence was that he did not ask Mr Bean or anyone from VicRoads to sign a written confidentiality agreement before he showed the prototype to Mr Bean or anyone else at VicRoads. In his 18 September 2017 affidavit, he said that he had previously told Mr Bean that anything that he saw or was provided with in the way of an Axent sample or product was for VicRoads' purposes only and was not to be talked about or shown outside VicRoads, including to any suppliers. In cross-examination he agreed, however, that he could not recall the date or topic of any such conversation. Instead Mr Fontaine said: From the minute he [Mr Bean] walked in the front door, I didn't want him to discuss any product or any VicRoads employee discuss any of my products to any other people in the industry. 60 In evidence in chief Mr Fontaine reiterated that during the 30-plus years he had worked with VicRoads "many documents, contracts, tenders were all provided on a confidentiality basis clearly marked on drawings". He added that it was: [c]learly understood mutually that when they come into my factory that we respect each other's premises and effectively it was to some extent an unwritten understanding, over and above what was already in situ, that there was confidentiality every time they visited our premises or every time we emailed them drawings and the like. 61 In his 12 December 2017 affidavit, Mr Fontaine took issue with Mr Sozio's evidence (outlined below) including with Mr Sozio's evidence about the manufacture and supply of a variable speed limit sign with a partly flashing annulus before October 2002 and about Hi-Lux's supply of a school zone sign on the Warburton Highway at Yarra Junction in 2002-2003. In the same affidavit, Mr Fontaine agreed with Mr Zammit about what Mr Sozio had referred to as "a fibre optic variable speed sign made by Hi-Lux" containing control boards marked as manufactured in 1998 recovered from Hi-Lux's warehouse, although in cross-examination Mr Fontaine agreed that fibre optic speed limit signs had not been supplied in Victoria since well before 2014. 62 Also in his 12 December 2017 affidavit, Mr Fontaine contested some of the evidence of Mr Priest (discussed below) including Mr Priest's account of the steps taken to commission the signs for the Western Ring Road Project. Mr Fontaine's evidence was that Axent checked the functionality of each sign in Axent's factory before the signs were installed, not after they were in place on the Western Ring Road. His evidence was that Axent had designed a program that simulated all of the signs as they were in the field, and that software was used to test the overall system. In his 19 April 2018 affidavit, Mr Fontaine deposed that he went to the opening of the Western Ring Road Project in December 2002. He referred to an email dated 20 November 2002, which was sent to him by Mr Petridis at VicRoads (who, according to the evidence was primarily responsible on VicRoads' side for the Project) indicating that the system would go live the next day, 21 November 2002, although Mr Fontaine could not recall whether the system went live on 21 November 2002 or a little later. 63 In his 12 December 2017 affidavit. Mr Fontaine also contested parts of Mr Jan's evidence, including that variable speed limits signs using LEDs were developed during the 1990s and that if the sign dimensions were minimised, there would be sufficient space in each corner for yellow flashing lights. Mr Fontaine also disagreed with Mr Jan and Mr Sozio concerning trials at the VicRoads Mulgrave facility, deposing that he had often visited the Mulgrave premises, with a clear view of the gantry, and that at no time did he see a peg board, a trial fibre optic speed sign, with or without multiple and variable flashing annuluses, or a 90 km/h sign.

Stephen Bean 64 Mr Bean had worked for VicRoads and its predecessors from 1981 until September 2017, most recently as the Manager of VicRoads Traffic and Incident Management. From the mid-1990s, Mr Bean was part of the VicRoads Intelligent Transport Systems (ITS) Branch in charge of traffic signal controls, CCTV, electronic signage and other intelligent transport systems. 65 At the time he joined VicRoads, Mr Jan (who also gave evidence in the proceeding: see below) was the leader of ITS, a role which Mr Bean took over when Mr Jan left. While at ITS, Mr Bean also worked closely with suppliers, including Mr Fontaine and Mr Sozio (see below), although he did not recall working with anyone from Compusign. Mr Bean deposed that VicRoads had a modest research and development budget, and relied on its suppliers to develop and source innovative products for it. His evidence was that the ITS group was also relatively small within VicRoads, with the bulk of funding going to road and bridge construction. 66 Mr Bean gave evidence that, in his experience, although VicRoads occasionally held meetings with multiple suppliers if VicRoads wanted them all to be aware of an issue, VicRoads and its suppliers did not come together to discuss and share ideas for new products. Mr Bean's evidence was that suppliers would approach him or his staff separately on a confidential basis, seeking information about whether VicRoads was interested in any of their proposed new initiatives. Although Mr Bean, as the ITS manager, did not sign confidentiality agreements with suppliers, he worked closely with them, on the basis that whatever they told him about their new products or innovations would not be disclosed by VicRoads to a third party, particularly not to other suppliers. 67 Mr Bean deposed that at the time he joined ITS in the mid-1990s electronic signage for speed signs was principally fibre optic signage and relatively rare. His evidence was that Hi-Lux supplied fibre optic signage to VicRoads at that time. Mr Bean's evidence was that among the first of such signage installed by VicRoads was at a road crossing at a primary school in Yarra Glen "about 1999". His evidence was that the Yarra Glen sign was memorable as it was the first time VicRoads had put a variable speed limit sign in front of a school. According to Mr Bean, the signs were manually operated by a crossing supervisor to display a 40 km/h speed limit. When the supervisor was not on duty, the signs were switched off or changed to display a 60 km/h speed limit. Mr Bean said that the red annulus on these signs did not flash, although they may have had a flashing yellow light. In cross-examination, he accepted that there may have been other examples of electric variable speed limit signs from this time, such "the flap-style sign", and a prism-style sign on the West Gate Bridge, both of which were electronically controlled although they had physical sign plates. 68 In cross-examination, Mr Bean readily agreed that he was wrong when he had deposed in his 11 October 2017 affidavit that the Western Ring Road Project was the first time that variable speed limit LED signage was used on a Melbourne freeway. He agreed that such signage had been used in the Burnley Tunnel for the CityLink Project. He also agreed that a significant factor, so far as the Western Ring Road Project was concerned, was the fact that it was the first time that road speeds were programmed to change based on real time traffic flow data. 69 Mr Bean deposed that in the mid-1990s he met Mr Fontaine, who at that time was involved in supplying variable message signs and trip information systems to VicRoads (as indeed was its competitor, Hi-Lux). Mr Bean's evidence was that Mr Fontaine was "a market leader in introducing LED signage", which he said had considerable benefits so far as VicRoads was concerned, observing that VicRoads mandated the use of LEDs for all new traffic light installations from 1999 and began replacing existing traffic signals from that time. 70 Mr Bean deposed that, sometime in 2000, he spoke with Mr Fontaine about Mr Fontaine developing a LED variable speed limit sign. He accepted that at the time there was a recognised need for some conspicuity feature if the speed limit was to drop. His evidence was that the then common practice in road signage was to include a separate amber warning beacon as a warning device alerting a driver to a speed or condition change or both, and referred in this connection to the NSW Road Traffic Authority, whose practice was to include two flashing amber warning lights at the top of the display panel. Also at this time, Mr Bean was aware of the variable speed limit signs used in the tunnel as part of the CityLink project and he was aware that the Road Rules "had relatively recently been changed to allow for those … variable electronic speed limit signs". 71 Throughout 2000 and 2001, Mr Bean visited Mr Fontaine's factory perhaps once a month or two months, often with Mr Priest. Mr Bean deposed (and I accept) that, at two such meetings, he was shown a sample of the LED variable speed limit signs under development. This sign did not use flashing amber warning lights, but rather had a red annulus with numbers in white in the centre. Mr Bean's evidence was that he and Mr Fontaine discussed how to avoid putting separate amber flashing lights on the sign and, although he could not recall the exact date, at one meeting, someone from Mr Fontaine's side (he could not recall precisely who) put forward the solution of flashing part of the annulus. Mr Bean could not recall whether this was demonstrated by Mr Cestnik or Mr Fontaine. Mr Bean said that: It had not occurred to me to do this. I recall being impressed by it. To the best of my knowledge at the time no one had done this before. I thought that it was a good solution and said so. To me at the time it seemed a simple and clean solution, but not an obvious one. Mr Bean added in cross-examination: … they actually showed me that they could flash the full annulus on, off, or they could flash one ring or two rings or three, so it appeared to be just programmable. They could do what they like … and that was new. 72 Mr Bean's evidence was (and I accept) that he told Mr Fontaine he would need to check that such a sign complied with the Road Rules. He said that he was subsequently advised that such a device would be regulatory and that he communicated this to Mr Fontaine. 73 Mr Bean accepted that Mr Fontaine had emailed him on 21 June 2000 about the requirements for a variable speed limit sign with LEDs and that he had responded by email the same day setting out those requirements. Unsurprisingly, given the passage of time he had no recollection of the email exchange. Mr Bean stated that the draft specification for the supply of changeable fibre optic speed restriction signs that was an attachment to his email would have been used for the Yarra Glen Primary School. When taken to the reference in clause 6.3 of that specification to a variable flasher unit, Mr Bean said that this unit would have been used with other equipment to cause the display to flash in order to attract motorists' attention. 74 Mr Bean was responsible for managing the tender process for the Western Ring Road Project. He accepted in cross-examination that he started to think about using the partially flashing annulus as a possible conspicuity feature for the signs for the Western Ring Road "closer to seeking expressions of interest". He agreed that Mr Fontaine was not unhappy about having Axent's variable speed limit sign included in the September 2001 specification and that Axent's product continued to develop "through until April 2001 and through until September 2001 … with at least some form of encouragement from [him]". 75 Mr Bean was clear that Mr Fontaine had proposed the flashing annulus solution to VicRoads before this feature was made a requirement in the September 2001 specification for the signage on the Western Ring Road Project. Mr Bean added that: I do not recall specifically ask[ing] Geoff for permission to include the requirement of a partly flashing annulus in the VicRoads specification. As best as I recall I simply asked Stephen Purtill to include it without asking anyone else. Mr Bean said in cross-examination that he "could see no reason why they wouldn't" be happy with the inclusion of the product in the specification for use on the Western Ring Road Project and that he believed he acted reasonably in including it. He added: Bear in mind, of course, that I assume that if one company can build a sign that can do this, then others could come along and say, "I can do that too." Mr Bean said that, after receiving expressions of interest for the Western Ring Road Project, VicRoads invited the shortlisted companies to tender and, in the course of so doing, sent them a bundle of documents including the September 2001 specification. Axent was awarded the tender based on its ability to meet the tender requirements and on price. 76 Mr Bean accepted in cross-examination that he viewed the prototype of Axent's variable speed limit sign sometime around September 2001, to see whether it was going to work well for the specification for the project. Mr Bean conceded in cross-examination that shortly before the tender was to be issued he would have told Mr Fontaine that VicRoads was going to use the partially flashing annulus option for the specification for the project, although he could not recall precisely when he said this. 77 Mr Bean's evidence was clear that the specification was not confined to the Western Ring Road Project but was a general specification for other applications requiring a variable speed limit sign. In cross-examination, Mr Bean agreed that any supplier would be required to incorporate the partly flashing annulus feature in future products where the specification applied. 78 Mr Bean's evidence was that his involvement in the Western Ring Road Project substantially diminished after the tender was awarded and that he had limited involvement in the onsite testing of the signage prior to the "go live date" in late 2002. He deposed that: The signage was installed before then, but, in line with standard practice, was covered and not visible to oncoming traffic. … Throughout my time at VicRoads, however, I observed that VicRoads was always careful to take whatever steps are possible during acceptance testing of any newly installed signals or signage to ensure that road users do not see the new signs or become confused as to what signals or signage to obey and also to avoid any safety issues. For this reason new signage or traffic signals are, wherever possible, and particularly if in conflict with the existing signage or signals, turned away from being visible by drivers when being tested. Mr Bean and Mr Priest agreed that Mr Petridis (who, so Mr Bean said, was still working for VicRoads in April 2018) was primarily responsible for the implementation of the Western Ring Road Project and would be the person within VicRoads most likely to know "exactly what happened during the commissioning". 79 Mr Bean was unsure when he became aware of the Patent and said that it was well after the Western Ring Road Project had been completed. 80 Mr Bean deposed that, after the Western Ring Road Project, demand for the partly flashing annulus signage "became high on other freeways and also in strip shopping centres and school zones". Mr Bean added that in 2003 VicRoads put out a tender for a state-wide school zone variable speed limits signage project (school zones project), for which Axent and Hi-Lux submitted tenders. By that time, Mr Bean said that Axent had demonstrated compliance with the VicRoads specification; it had a type approval for its variable speed limit LED sign; and it was successful in its tender. By the same time, Hi-Lux had not demonstrated compliance with the specification and did not have a type approval. 81 In cross-examination, Mr Bean clarified his affidavit evidence regarding a Hi-Lux variable speed limit product. He accepted that Mr Sozio, for Hi-Lux, submitted a variable speed limit sign to VicRoads on 22 October 2003 for VicRoads to look at, but he said at that point Mr Sozio did not have type approval for the product. Mr Bean also deposed that he had advised Hi-Lux that VicRoads would assess the fibre optic signage previously installed in Yarra Glen as part of the process. He deposed that although it was by then too late for Hi-Lux signage to be considered for the school zones project, type approval would mean that that signage could be considered for future tenders. At the time, type approval decisions were made by a committee within VicRoads, which would consider any ITS recommendation. Mr Bean explained that once type approval had been given, it was VicRoads' practice to require all signage of that type supplied to it by that supplier to comply with the type approval. Mr Bean also said in cross-examination that type approval was generally but not necessarily referable to a VicRoads specification. 82 Mr Bean disputed the accuracy of Mr Sozio's recollection that VicRoads required signs to have a partly flashing functionality in 1991. Mr Bean said that he had never seen a Hi-Lux variable speed limit sign with a partly flashing annulus in 2003 or earlier. Mr Bean deposed that VicRoads did not require the flashing of part of a speed sign until the September 2001 specification and that, until that time, separate amber flashing lights or other signage were used to warn of a speed change. 83 Regarding Mr Sozio's evidence about Bastow Place, Mulgrave, Mr Bean said that at different times there was a variety of signage around VicRoads' Mulgrave offices. He added that following the closure of the Bastow Place premises in 1995, there was another VicRoads facility in Mulgrave where traffic lights and other signs were tested. In response to Mr Jan's affidavit evidence, Mr Bean said: … I never saw a sign with a partly flashing annulus at any VicRoads facility before the time of my meetings at Geoff Fontaine's premises … … I never observed any testing or trialling of speed sign prototypes with a partly flashing annulus occurring at VicRoads while Barry [Jan] was working with me in the ITS Group. ... I joined the Group in 1995. At that time, I don't recall that we had any electronic style speed signs at that time. When I joined, we set up the new test facility at South Eastern Freeway Mulgrave. I visited the premises on may [sic] occasions and would have been aware if we were testing an electronic speed zone sign. We weren't. … … I agree that wind detectors operated in the Westgate Bridge at the time that Barry was at VicRoads. The signs on the bridge at that time were mechanical tri-signs. These signs were replaced with electronic signs after the success of the Western Ring Road project. Mr Bean also deposed that he had never seen the gantry to which Mr Jan referred in his affidavit evidence (see below). 84 Mr Bean also disputed Mr Sozio's description of the Yarra Glen variable speed signs, stating that these signs did not flash the rings as Mr Sozio described. He also said that he had never seen a sign in Bendigo with a flashing annulus such as Mr Sozio claimed to have seen. Mr Bean's evidence was that: … [A]t that time the signs that VicRoads was using in fibre optic were things like GIVE WAY TO PEDS signs, where the whole message might flash. The variable flasher unit is what would enable this. His evidence was that the changeable fibre optic speed limit restriction signs also required a variable flasher unit. 85 Mr Bean deposed that a benefit of the invention involving a partly flashing annulus was as a warning to motorists "both of the presence of something that called for a change in speed … and the change in the speed limit itself". A further benefit was, so he deposed, that it removed the need for flashing amber warning signals. He concluded that "this solution in the Patent is more compact, more elegant, cheaper and arguably more effective than anything that had been used by VicRoads or anyone else at the time". In cross-examination, he conceded that he did not know what costs might be involved, and it was merely his opinion that the flashing annulus was more effective than another solution. He went on to say "the motorist needs to recognise there has been [a] change and I think [the partly flashing annulus is] effective in doing that", whilst conceding that if motorists were used to seeing flashing yellow lights as indicating caution was needed, then this would also be effective. 86 Mr Bean also clarified in cross-examination that although VicRoads had a specification for variable speed limit signs from around September 2001, which was applicable to the Western Ring Road Project, it was not the case that VicRoads wanted other variable speed limit signs brought into compliance with that specification. Mr Bean said: ... [W]e didn't want to change what people were doing. The specification at that time allowed for fibre optic signs as well. 87 In response to the affidavit evidence of Mr He and Mr Riquelme (see below), Mr Bean subsequently deposed that he was unaware of any variable speed limit sign prototype being developed by Compusign during the tender process for the Western Ring Road Project; that he did not recall going to Compusign's premises to look at passenger information display signs in early 2002, although it was possible that he had done so; and that he did not recall seeing the letter annexed to Mr He's 28 March 2018 affidavit and marked ZQH-4 (see below). Regarding this letter, Mr Bean deposed that he had seen an email sent to him by Mr Thurairatnam at Hi-Lux, which indicated that this letter had been forwarded to him on 8 January 2002. The letter proposed that VicRoads pay Compusign to adapt passenger information display technology for a variable speed limit sign that had pixel failure detection, LED driver circuitry not requiring resistors, and a sign controller. Mr Bean's evidence was that he did not approve the project that the letter proposed and that, to his knowledge, the project did not receive VicRoads approval and did not proceed.

Peter Cestnik 88 Mr Cestnik was the General Manager of Axent at the time of the hearing. From 1998, he had worked for Symon Australia. From March 2001, he worked for Axent, including as Production Manager in 2001. 89 Mr Cestnik deposed that during 2000 and 2001 Symon Australia and then Axent were working to develop a variable speed limit sign using LED lighting, and that Mr Bean and other VicRoads personnel had visited Axent's premises on a few occasions to discuss what Axent was doing. In particular he recalled that, with Mr Fontaine, he had demonstrated the prototype variable speed limit sign to Mr Bean in September 2000 and Mr Bean had said that he liked the size and neatness of how it was made. He also recalled that Mr Bean and Mr Fontaine had discussed the need to warn drivers of the change in speed, and that Mr Bean said "something like a separate warning light of some kind would need to be added for this purpose". 90 Mr Cestnik deposed that he and Mr Fontaine discussed alternatives to a separate set of warning amber lights, and ultimately made a proposal to Mr Bean along the lines of "what about if we were to make it flash part of the annulus?". Mr Cestnik said that Mr Bean indicated that he really liked this solution but that he would need to confirm that it met the requirements of the Road Rules. Mr Cestnik arranged for changes to the prototype sign so that the partly flashing annulus could be demonstrated. 91 In cross-examination, Mr Cestnik accepted that VicRoads was "[p]otentially" one of the contemplated customers for Axent's variable speed limit sign, and that Axent might "[p]otentially" wish to know whether they would approve the product. Mr Cestnik said in evidence that he could not recall whether he was involved in any meetings with VicRoads in around April 2001 in relation to a prototype variable speed limit sign or any meetings with VicRoads in relation to the variable speed limit signs at any time before Axent tendered for the Western Ring Road Project. 92 In cross-examination, Mr Cestnik said that Symon Australia had developed variable speed limit signs in the late 1990s for the CityLink Project. He described them as "basic LED signs" and "the basic version of a variable speed limit sign". His evidence was that these signs could display two different speeds using LED lighting, but did not have a flashing annulus or dimming features, and could not otherwise flash. 93 In respect of Mr Priest's evidence about the commissioning process for Axent's variable speed limit sign along the Western Ring Road, Mr Cestnik's evidence was that he was present when night-time works were undertaken in late 2002. His evidence was that the testing was needed to set the appropriate night-time lighting levels in the signs, and not to test the flashing of the annulus components of the signs. In cross-examination, he said that the testing occurred on only one night, disagreeing with Mr Priest that the testing occurred over multiple nights (see below). Mr Cestnik's evidence was that during the night of the testing Mr Zammit was in a "communications hut" and unable to see the sign faces and what was displayed. He agreed that the signs were uncovered on the night that testing occurred and insisted that the system was not yet live. His evidence was that VicRoads had previously approved the functionality and the operation of Axent's variable speed limit sign in factory testing at the Axent factory prior to installation. He accepted that the control of the signs from the VicRoads control centre was a deliverable for the Project but said that this was not verified by VicRoads before practical completion.

Michael Zammit 94 At the time of the hearing, Mr Zammit was Axent's production manager/project manager. He had been employed by Axent in this capacity since March 2001. Previously from 1994, he had worked for Symon Australia, initially as a software programmer and later as a design engineer, project engineer, service manager and technical specialist before taking up his current position. In particular, during 2001 and 2002, he was Axent's project manager and production manager for various projects across Victoria and Australia. 95 Mr Zammit worked on the development and installation of the Axent system for the Western Ring Road Project. His evidence was that Axent's task in relation to the Project was to implement a system to dynamically read information regarding traffic volumes, and feed that information into an algorithm, which would then calculate the required speeds in a dynamic mode of operation. That algorithm would then determine what the recommended speeds for traffic in the area were and then adjust the traffic flow accordingly. 96 Mr Zammit's evidence was (and I accept) that the Western Ring Road Project involved the installation of approximately 80 of Axent's variable speed limit signs on the Western Ring Road in late 2002. Mr Zammit said that these signs commenced operating in December 2002. In 2002, there were 15 groups of the Axent signs, linking back to a communications hut, which was in turn linked to the VicRoads traffic control centre at Camberwell (not Kew as Mr Priest deposed: see below). Mr Zammit said (and I accept having regard to all the evidence) that it was only later that the traffic control centre at Camberwell moved to Kew. 97 Mr Zammit was involved in the development, commissioning and testing of the traffic management system and Axent's variable speed limit signs for the Western Ring Road, although Mr Petridis from VicRoads, with whom he dealt on a regular basis, was primarily responsible for the Project on VicRoads' side. Mr Zammit's evidence was (and I accept, noting that it was corroborated by others at Axent) that each of Axent's signs was tested at Axent's factory during and after manufacture and, when installed along the Western Ring Road, each was covered and/or turned away from oncoming traffic. The signs were not tested on site. Rather, Axent designed a program that simulated all the signs as they were in the field, and the software for the traffic management system itself was developed and tested using a simulator program. Mr Zammit's evidence was the sign simulator software module simulated the operation, reporting and all display modes without having the signs installed in the field or operating in real time. His evidence was that he was not involved in any live testing where the system was controlled from either the traffic control centre at Camberwell or the traffic management centre at Kew, and that he had not observed any live testing via CCTV. 98 Once the variable speed limit signs were installed, Mr Zammit's evidence was (and I accept: see below) that the signs were, at some point shortly before the system went live in December 2002, turned towards the oncoming traffic but were programmed only to display a speed of 100 km/h. His evidence in this regard was consistent with a copy of a letter dated 19 August 2002 from Mr Cestnik to Mr Petridis of VicRoads, an email of the same date between Mr Cestnik and Mr Petridis, and an email of 23 August 2002 between Mr Petridis and Mr Zammit (all of which were MZ-2 to Mr Zammit's 12 December 2017 affidavit). 99 Mr Zammit agreed with Mr Priest (see below) that Mr Priest and Mr Cestnik had undertaken the night-time testing of the signs. In this testing, Mr Priest and Mr Cestnik were located at the signs, while Mr Zammit was controlling the system remotely via the communications hut. Mr Zammit said that they adjusted the signs for brightness, and that the speed display was not varied and the annulus was not flashed. The purpose of the testing was, so he said, to set the appropriate brightness levels of the signs for their specific locations, which depended on the ambient lighting in each area. Mr Zammit added that the VicRoads testing and commissioning process took much longer than the several days mentioned by Mr Priest, although it did not involve testing the partly flashing annulus. In cross-examination, Mr Zammit stated that during these tests he was unable to see the sign faces themselves because he was in the communications hut but that he had reviewed the data that was going to the signs and that he was "the only point of control for those signs at the time". 100 Mr Zammit deposed that each variable speed limit sign for the Western Ring Road Project was programmed so that the annulus could flash only if the speed dropped, and that a partly flashing annulus was not possible if the displayed speed was a constant 100 km/h. He added that the speed could be dropped only if the system was operational or if the programming of the signs was manually overridden. Mr Zammit said that Mr Priest's evidence to the contrary (see below) was incorrect, and there was no facility to control that annulus from the back of the sign. 101 Mr Zammit's evidence was that Axent's signs went live (in the sense that the dynamic system was turned on) in late November 2002 (although the system went live in December 2002). He referred to an email dated 20 November 2002 from Mr Petridis to Mr Fontaine (and copied to Mr Zammit, Mr Bean, Mr Priest, and another VicRoads employee), which included the statement that "we will go live with the VSLS tomorrow, however we will also require Michael [Zammit] to train the TCCC officers" (emphasis added). In cross-examination, Mr Zammit stated (and I accept) that until late November 2002, the VicRoads operators at the traffic control centre were not trained in and did not have the software to control the signs; and that the only console access was protected by a password. His evidence was that there was no electronic communication with the signs in dynamic mode (i.e., at more than one speed) until late November. An email dated 28 November 2002 from Mr Petridis to Mr Zammit (copied to Mr Bean and Mr Cestnik) indicated that the traffic control centre at Camberwell did not take control until 5 December 2002. 102 Mr Zammit's evidence was, and I accept, that Axent was the first company to have a product with type approval from VicRoads to supply and install signs such as Axent's variable speed limit sign, and that at the time all other suppliers used flashing beacons. At this time, Mr Zammit was aware of the use of flashing beacons with variable speed limit signs in Victoria on the West Gate Bridge, and that the use of flashing beacons was Australia-wide. His evidence was that Axent wanted to have a product that was different to existing products, specifically in relation to variable speed limit signs. In cross-examination, Mr Zammit accepted that type approval for Axent's sign with the partly flashing annulus gave Axent a commercial advantage. He did not recall, however, whether Axent had received type approval at the point of the Western Ring Road system going live. His evidence was that VicRoads might be willing to source products if type approval was underway, even if it had not yet been obtained. 103 In his 12 December 2017 affidavit, Mr Zammit gave evidence representing the Hi-Lux sign as depicted in SVS-17 to Mr Sozio's 8 September 2017 affidavit and what he observed at an inspection of the sign at Hi-Lux's premises on 13 November 2017. His evidence was that the marking on the control board (or PCB) did not necessarily indicate the date on which the sign was made since such boards were not stamped with the date of production but with any information that was requested to be printed on them; and, in any event, it was unusual for the word "DATE" to be printed on a control board. Rather, where a control board did bear a date, the general practice was to have no more than the date itself printed on the board. He also said that an unusual feature of the sign was that it had two PCBs, rather than one. He noted that some of the components packages serving the same purpose on the first and second PCB were different, and that this was unusual for boards made at the same time. His evidence was that some of the components were manufactured in 2003. On inspection of the sign, Mr Zammit's evidence was that he observed features indicating that the two PCBs were made by different processes, one by hand and the other by machine. He also observed that one of the boards had a serial number sticker attached while the other did not, and that the colours of the boards indicated they were fabricated at different times or by different suppliers, but definitely in different batches. Based on this inspection, he expressed an opinion that the sign was assembled sometime after 2014, an opinion which was challenged in cross-examination in which he accepted that components, including PCBs and globes, within a sign can be replaced over time; that fibre optic technology, as had been used in the sign, was relatively old technology; that he had not heard of VicRoads seeking a supply of fibre optic variable speed limit signs within recent years; and that it was inherently unlikely that such a sign would have been manufactured after 2014 for commercial sale.

Sachin Prasad 104 At the time of the hearing, Mr Prasad was an Associate Director of Irwinconsult engineering consultants, with over 15 years' experience as an engineer on traffic and transport planning projects. He was also a VicRoads accredited senior road safety auditor. Axent relied on his evidence as that of an expert witness in traffic engineering. His reports were annexed to his affidavits. 105 Mr Prasad commenced his professional career in January 2002, as a traffic engineer at Moreland City Council. Mr Prasad gave evidence that traffic engineering was a branch of civil engineering focused on such things as traffic management and operations, signage and included the operation and positioning of traffic signals. His evidence was that he had never worked in any capacity for a manufacturer of signs and had not undertaken any study relating to electronics. He said that he had only a general understanding of the internal components of an electronic speed limit sign, gained through working on traffic signal projects. 106 Mr Prasad's first report dated 16 October 2017 (annexed to his 16 November 2017 affidavit) stated that before October 2002, electronic variable speed limit signs: … typically … would remain blank and only activate when the reduced speed limit was in place. These signs were typically black with a white illuminated number and red annulus. Some of these signs had flashing yellow lights, which would activate when the speed limit sign activated. There was also an ability for some variable signs to display different speed limits on the display. In cross-examination, he referred to variable message signs, for example, those mounted on speed trailers. He said that he had no specific memory that as at October 2002 there were electronic speed limit signs that would display different speeds at different times. He did not recall the signs in the CityLink tunnel, and he was not aware of the ability to control a speed limit sign remotely prior to October 2002. 107 Mr Prasad expressed the opinion that the invention in the Patent was: - the flashing annulus, with some of the annulus flashing; - the ability to change the speed and annulus on an external sensor such as wind, light, pre-programmed time or control centre. In his opinion, the benefits of the invention were: - The retaining of one ring of the annulus ensures that the sign retains its statutory status while the flashing of the other rings draws a motorist's attention to the sign. This enables the sign to be conspicuous to approaching motorists whilst retaining its status as a statutory speed limit sign. - Lack of additional lights to draw attention to the sign, thus providing a simpler, more legible sign that, to the average motorist, looks the same size and shape as a traditional speed limit sign. This provides a more consistent message to motorists. - The lack of additional lights results in a smaller, more compact sign. This allows the sign to be a more practical option for use on freeway gantries and bridges. The provision of a sign with the ability to change the speed and annulus on an external sensor such as wind, light, pre-programmed time or control centre has the following benefits: - Immediate changes to the signs without the need for intervention. - Integration in managed roads programs where significant safety and time saving benefits can be achieved by managing speeds and traffic flow along roads. 108 In cross-examination, Mr Prasad conceded that when referring to the first identified benefit, he was comparing the use of the sign to a fixed metal plate sign, and the second and third identified benefits involved a comparison with flashing yellow lights. He also conceded that there was nothing in terms of the control of the sign that would not apply equally to a sign with flashing yellow lights. 109 Mr Prasad's first report also referred to a benefit of using the sign as enabling speeds to be reduced at different times of the day or in the event of road works, or an incident. He considered that the sign could provide improved conspicuity in school speed zones and shopping centre strips. He also considered that "the use of these signs enable[s] the use of Freeway management technology so that traffic speeds can be modified along the road to control congestion and traffic flows". 110 Mr Prasad's second report dated 3 November 2017 (also annexed to his 16 November 2017 affidavit) stated that: The most common method used for drawing a motorist's attention to a sign was flashing yellow lights. This was done for speed signs, with four flashing lights, and also for other warning signs … He explained that warning messages and separate lights were commonly used across a variety of signs, such as speed limit signs with 4 flashing yellow lights; tram safety zones signs with a single flashing light; traffic signal ahead or ice/frost warning signs with double flashing lights; and speed trailers with speed radars indicating a motorist's speed, which flashed the speed and variable messages. 111 In answer to the question, "[w]as flashing the numerals themselves or the whole of the speed sign ever done? Why or why not?", Mr Prasad's second report stated that: This was only done on warning signs such as speed trailers. This was not done for speed signs. … 112 Mr Prasad's second report stated that speed signs were required to comply with AS1743 and AS1742.4, and that most traffic engineers would have been aware of these standards. Further, in his experience up to October 2002, warning devices were required to comply with AS1742.4's requirement that single or twin flashing yellow lights be used to alert motorists of a reduction in speed. Mr Prasad's second report concluded that: I believe that the ability to flash the annulus and have the change in the sign sufficiently conspicuous to approaching motorists would not have been an obvious thing to do. The idea is simple, however, it is also ingenious as it enables the removal of all external signs/devices and allows the sign to be used in isolation. 113 In cross-examination, Mr Prasad accepted that there was no reference in Schedules 2 or 3 to the Road Rules to Australian Standard 1742, and that he relied on the reference to the Standard in the Reader's Guide to the Road Rules. This was the only reference to the Standard that he was aware of and read when in local government. He accepted, however, that the requirements of that Standard did not need to be strictly complied with in order for the sign to be regulatory, and that some variance was permitted, such as in relation to size. 114 Mr Prasad's third report dated 28 February 2018 (annexed to his 28 February 2018 affidavit) repeated and augmented some parts of his earlier reports. Mr Prasad commenced his third report by stating that "[a] variable speed limit sign is an electronic sign which displays a regular speed limit, however can also display an alternate speed limit when required". He repeated that the most important consideration for a sign was that it complied with the relevant Australian Standard. He said that the other important consideration was the sign's conspicuity under changed conditions. He reiterated that the invention in the Patent in his opinion was "the flashing annulus, with some of the annulus flashing" and "the ability to change the speed and annulus in response to a signal from an external sensor such as wind, light, pre-programmed time or control centre but always with at least one continuously illuminated annulus ring". This report also set out a description of each claim in the Patent, as well as Mr Prasad's opinion as to whether the respondents' signage systems "fit within the description in the Patent of being a changing sign system, and … a system for use as a variable speed limit system on roadways"; and whether the respondents' signs have the components that Mr Prasad had identified in claim 1 of the Patent. It addressed similar questions for each of the other claims in the Patent. 115 Mr Prasad's third report concluded by restating his opinion of the features of the invention and listed the respondents' signs with a partially flashing annulus. For Hi-Lux, these were the A, B, and C size VSLS, as well as the C size lane use sign. For Compusign Australia, these were the A, B, C and D size VSLS provided to the RTA; the C size advanced lane use sign (observed at Compusign's office); the A and C size advanced lane use signs (in the Airport Link document); and the clip in/clip out B size advanced lane use sign. For Compusign Systems, these were the B and D size VSLS. Mr Prasad added that: All of these signs have the ability to change the speed and annulus using an external sensor such as wind, light, pre-programmed time or control centre. According to the information provided, the invention in the patent is found to be in the signs. In my opinion each of the claims in the patent are found in each of the signs I have referred to in this report. … 116 Mr Prasad also summarised his conclusions in a table attached to this report, which was subsequently updated in a table annexed to Mr Prasad's 25 April 2018 affidavit. In cross-examination, Mr Prasad stated that the original table did not include all of the documents forming the basis of his opinion because he had not known that he had to include every one. When asked why the updated table did not refer to some of the documents he had previously mentioned in the original table, Mr Prasad said he had received "a lot of documentation" and that much of it was "very similar", but that he was confident that the updated table identified all the documents and page numbers for the relevant features that he considered to support his findings, as far as possible "in the time available". 117 Mr Prasad's fourth report dated 11 April 2018 was annexed to his 12 April 2018 affidavit and said to be "an update" on his previous report, with additional observations noted by textual underlining. It is unnecessary to set out these observations here. It suffices to note that Mr Prasad's conclusions were unaltered, and the basis for his opinions in his fourth report were further explained in his 25 April 2018 affidavit. Also in his 25 April 2018 affidavit, Mr Prasad deposed that in his opinion "the patent claims a sign that responds to an input that changes the speed and annulus on the display, and it is the display control card that does this". 118 In cross-examination, Mr Prasad was taken to his statement in his affidavit of 25 April 2018 that he had not elaborated on his understanding of claim features that were self-evident in their meaning (such as "display panel"), although he had sought to explain the features that were not "like this", based on his reading of the patent as a whole. In cross-examination, Mr Prasad accepted, by way of example, that he had explained his understanding of the expression "normal speed limit" as "[a] speed limit different to the normal speed limit refers to typically the temporary reduction on speed limit along a section of road". 119 In cross-examination, when taken to his fourth report, Mr Prasad accepted that he had reasoned that a type approved sign had to meet the requirements of the relevant VicRoads specification, and had considered on this basis whether the specification had the features of the claim. Mr Prasad also conceded that his conclusion regarding the "variable speed limit sign (VSLS) to RTA" signs made by Compusign Australia that the inner annulus of this sign would flash was an inference drawn from the requirement that the inner ring be flashed, to retain regulatory status. 120 In respect of his statements at 3.1.1 of his fourth report concerning claim 1, Mr Prasad stated in cross-examination that he had listed what he thought were the inventive features of the claim, instead of listing the key features of the claim. His evidence was that he had sought to identify these inventive features in the relevant products, and that his approach had been to consider whether the products were capable of displaying a number in a circle, and whether the products were capable of flashing part of the annulus of the display. 121 In considering whether any of the signs had a "control means", Mr Prasad's evidence in cross-examination was that he had looked for a reference to something that changed or modified or controlled the sign, saying that such a control means was obvious from all the specifications. With respect to Compusign's signs where the group controller was located externally to the signs, or Hi-Lux's signs where the serial interface unit (SIU) was located externally, Mr Prasad stated that, as the sign still had an internal controller or display card, he had considered that the internal controller or the display card was the control means. 122 For the integers of claim 9 (flash rates) and claim 13 (external sensor), Mr Prasad said in cross-examination that he had approached this analysis in terms of whether the sign was capable of displaying or being controlled in such a manner. For claim 13, because there was a light sensor that could control the brightness or dimming, he considered that the requirements of claim 13 were satisfied. For claims 14 and 15, Mr Prasad said that he approached these claims in terms of whether the signs were capable of varying the display in response to an external signal, such as a control centre. 123 Also in cross-examination, Mr Prasad stated that his conclusion in respect of claim 16 regarding the ability to vary the annulus according to pre-programmed times was not based on specific documentation but was based on a website. He conceded that he had drawn an inference that, as the Hi-Lux sign had been used in the type of projects that used pre-programmed signs, then the signs were changed as described in claim 16. He also conceded that he could find nothing in the documentation for Compusign, but that he had concluded that it fell within the meaning of claim 16 because it would need to do so in order to comply with the relevant Standard. Mr Prasad accepted that this had been his process of reasoning for a number of the claims. Mr Prasad further said that his conclusion about Hi-Lux's lane use sign was based upon a brochure relating to it. 124 In memoranda annexed to his 12 April 2018 affidavit, Mr Prasad addressed affidavits of Mr Jan, and an affidavit from each of Mr Sozio, Mr Riquelme, Mr Taranto, and Mr He. In addressing Mr Jan's 8 March 2018 affidavit, Mr Prasad stated: It is my opinion that the flashing annulus provides a more legible and practical option as a conspicuity device as it removes the flashing yellow element from the sign. As a single sign, there may be little difference between the two options. When fitted in a freeway gantry for example, the provision of 4 flashing yellow lights on each sign has the potential to be distracting to approaching motorists. I do not agree with Mr Jan that the sign has sufficient provision for the flashing yellow lights in the corners and the flashing annulus may not have any relationship to sign size. … For a sign with no flashing annulus, the flashing yellow lights are a very important component of the sign. This forms the conspicuity device for the sign and indicates to approaching motorists that there is a different speed limit displayed on the sign. … I agree that extensive human factors testing would be required to determine with certainty as to the preferred conspicuity option by motorists. However, anecdotally the flashing annulus appears to be the preferred option, as it appears to be a commonly used sign. … I was unaware of the VicRoads control centre having the ability to change the speed and annulus of a variable speed sign in 2002. I understand that there was the ability to change traffic signals and associated intersection signs (no left turn etc) and Variable Message Signs. I was also unaware, in October 2002 that VicRoads control centre could make the changes to the speed signs on the Westgate Freeway. Mr Jan also says that the Westgate Bridge signs were tri signs. I do not recall this signage but this accords with my recollection as of October 2002, I was aware of LED lights being used in signs such as message signs and traffic lights. 125 In cross-examination, Mr Prasad accepted that the conclusion that the flashing annulus appeared to be the preferred option was based on the requirement in the current VicRoads specification, and that he did not know the reason for that requirement. In cross-examination, Mr Prasad also accepted that his conclusion in this regard was not based on any actual study. 126 With respect to Mr Riquelme's evidence that the end user determined the instructions that were to be provided to the sign via the group controller, Mr Prasad stated: The Compusign specifications (Advanced Lane use Sign Size C for example) outlines that the sign has both a device controller and a sign controller located internally (page 10 and 11). Further, the specification outlines the installation of componentry between the controller and the group controller, indicating that the internal controllers are still required to change the sign even when the sign is used with a group controller. As such, it is my opinion that the sign impinges the patent, specifically, "a control means for selecting the selected speed limit display according to an input criterion and for varying part of one or more of the display panel, the central numeric displaying area or the annulus to display, when selected, the selected one of the at least two possible speed limit displays" It is my opinion that the device controller is a control means for selecting the selected speed limit display and the external controller provides the input criterion from the end user. 127 In response to Mr Taranto's evidence that the end user determines what instructions to provide to the sign by the group controller, Mr Prasad said: The Hi-Lux specifications (Variable Speed Limit Sign C Size Master/Slave Pair for example) outlines that the master sign has a 485Master which receives communication from an external source and transmits control signals to the Display Control Card which is located in each sign (page 6). As such, it is my opinion that the sign infringes the patent, specifically, "a control means for selecting the selected speed limit display according to an input criterion and for varying part of one or more of the display panel, the central numeric displaying area or the annulus to display, when selected, the selected one of the at least two possible speed limit displays" It is my opinion that the Display Control Card is a control means for selecting the selected speed limit display. The sign has various configurations of the sign that can be displayed or not displayed at any given time. However, when the speed limit sign is displayed, it is considered that the sign infringes the claims of the patent, as outlined in our traffic report. 128 In substance, Mr Prasad's opinion was that the Hi-Lux signs infringed the Patent as there was a "control means" because the DCC received instructions from the SIU, which in turn received instructions from a group controller. In cross-examination, however, Mr Prasad conceded that his knowledge concerning the group controller was no more specific than his understanding that they controlled the signs in some way. As to how the sign was controlled in 2002 to show a different display, he said that he understood that some signs were controlled by timers and some were controlled manually.

Charles Leonidas 129 Mr Leonidas is the principal of Comlaw, Barristers & Solicitors, the solicitors for Axent. In his 18 September 2017 affidavit, Mr Leonidas provided a description of the inspections of certain signs, which he attended at Hi-Lux's and Compusign's premises on 8 June 2017. Annexures to this affidavit included correspondence between the parties' solicitors, photographs and video of the signs viewed by Mr Leonidas during the inspections, and copies of the respondents' brochures and websites. In this affidavit, Mr Leonidas deposed, with respect to Hi-Lux signs at the Hi-Lux premises: 9. Each of the signs that I inspected utilised light emitting diode (LED) technology for its lights. 10. Each included an annulus formed by many red LED lights that appeared as outer circles on the display panel around the central numeric displaying area. The numbers in the centre were formed using white LED lights. 11. Each sign was demonstrated varying part of the annulus in response to an external sensor, and each was activated to display different speed limits. 12. For all of the three signs it was the outer portion of the annulus that was constantly illuminated and the inner portion that was flashing when the numbers changed. For one of the signs there was an annulus made up of four outer circles of LEDs, three of which flashed, and for another two circles of red LEDs flashed and two were fixed. For the third sign, it was possible to change how many of the LED rings of the annulus were fixed and how many flashed. 130 Mr Leonidas deposed that the sign inspected at Compusign's premises used LED technology for the lights. The display panel included the central numeric displaying area, formed by white LED lights, and the annulus, formed by red LED lights. The sign was activated to change different parts of the display panel, demonstrated varying part of the annulus in response to an external sensor, and was also activated to display different speed limits. Mr Leonidas observed that the outer portion of the annulus stayed constant while the sign was showing a speed limit, while the inner portion flashed when the numbers changed. The sign was also demonstrated as being capable of displaying only a red "X" and yellow dots, without numbers or an annulus. Mr Leonidas was not shown the internal workings of the sign. He was shown a computer board labelled "tsignCONTROLL" and told by a Compusign representative that such a board was inside the sign being inspected. 131 Axent also relied on Mr Leonidas' 2 February 2018 affidavit, with annexures, which had originally been made in support of Axent's application for further discovery, and on Mr Leonidas' 12 April 2018 affidavit, with annexures (including some documents produced under a subpoena and some correspondence between Axent's solicitors and the solicitors for VicRoads from September 2016 to March 2018). Issues relating to Mr Leonidas' 3 November 2017 and 30 April 2018 affidavits are discussed below.

The respondents' evidence 132 The respondents relied on the following affidavits, with annexures, which, save for successful objections, were admitted in evidence: the two affidavits of Barry Denis Jan affirmed on 8 September 2017 and 8 March 2018; the three affidavits of Robert William Priest affirmed on 8 September 2017, 28 February 2018 and 7 March 2018; the three affidavits of Salvatore Vincent Sozio sworn on 8 September 2017, 8 March 2018, and 28 March 2018; the affidavit of Peter Mark Taranto affirmed on 28 March 2018; the affidavit of Rodrigo Rafael Riquelme affirmed 28 March 2018; and the two affidavits of Zhi Qiang He affirmed on 28 March 2018 and 18 April 2018. Each of Mr Jan, Mr Priest, Mr Sozio, Mr Taranto, Mr Riquelme and Mr He were subject to cross-examination. There was limited additional evidence in chief.

Barry Jan 133 The respondents relied on the evidence of Mr Jan, partly as an expert witness whose opinion was admissible under s 79 of the Evidence Act 1995 (Cth), but mostly on the basis that he had direct knowledge of relevant matters, including the signs under development or in use by VicRoads before the priority date, which knowledge was acquired in the course of his then employment. I discuss Axent's submissions about his evidence at the end of these reasons. For the most part, as will be seen, Mr Jan's evidence was admissible as direct evidence about what he had seen or perceived at the relevant time. 134 At the time of the hearing, Mr Jan was a farmer. From 1973 until late 1999, however, Mr Jan had worked for VicRoads and its predecessor entities (the Roads Safety and Traffic Authority and the Road Traffic Authority). At the time of retiring from VicRoads, he held the position of Section Leader - Traffic Signals Installation and Maintenance. He had received a number of awards while working at VicRoads, including a Public Service Medal in June 1995. From 2000 to 2011 he was the Manager - Business and Marketing for the Australian Road Research Board (ARRB). In this position, he was responsible for, or involved in, the marketing of ARRB products, including a range of Australian-developed traffic management systems. 135 While at VicRoads and the ARRB, Mr Jan represented his employer on various Australian Standards committees for traffic signals and traffic management devices. He was the chair of the Australian Standards Committee LG/6, Road Traffic Signals for approximately 20 years, from the late 1980s/early 1990s until he retired in 2011. That Committee covered traffic signals and electronic field devices. He was also a member of the Australian Standards Committee MS/12, responsible for signs and manuals of uniform control devices, including for AS1742 and AS1743. Although he could not recall the exact period during which he was a member of that latter Committee, he indicated that it was during the 1980s and 1990s. 136 During his time at VicRoads in the 1990s, Mr Jan was responsible for installing, remodelling and maintaining traffic signals and electronic traffic management devices. At the same time, he was also involved in VicRoads' research and development in the areas of road safety and traffic flow. This included development and testing in relation to changeable speed limit signs (such as "flap signs" and "tri-signs"); long-life pavement marking materials; solar-powered LEDs; fibre-optic displays for changeable overhead lane marking signs; worksite safety initiatives, including "too fast/slow down signs" activated by speed detection; a school speed zones project; the introduction of quartz halogen and LED optics for traffic signals; a freeway incident detection system; and a dynamic freeway information system to display estimated travel times based on real-time information about traffic conditions. 137 Mr Jan deposed that, by the end of 1999, there were a number of different traffic signals that incorporated flashing elements designed to attract motorists' attention, including pedestrian crossing lights (with flashing amber lights); some variable speed limit signs (with orange lights in the corners); some school zone speed signs (with flashing orange beacons indicating a 40km/h speed limit; traffic signals indicating they were faulty by a flashing amber mode; and "no right turn" and "give way to pedestrians" signs that were flashed in their entirety. 138 Mr Jan deposed that, at least during the 1990s, VicRoads always went through a tender process for the supply or installation of traffic signals and signs, save for samples, prototypes, or other small or one-off orders that might be bought from the supplier. The tendering process would commence with the generation of either a specification or a technical note, neither of which were treated as confidential. VicRoads would invite approved suppliers to tender and then review the tenders. Mr Jan added in cross-examination that for smaller jobs, or "type approval jobs" where VicRoads wished to get a device to assess its effectiveness, VicRoads may not have used a tender process, although he was clear that a tender process was used for any major purchases and the majority of jobs. 139 Mr Jan gave evidence about conducting VicRoads' first field trials of LED traffic lights in the mid-1990s and about his work at this time with the Australian Standards committees to make cognate changes to the relevant standards. His evidence was that during the 1990s variable traffic signs generally used fibre optics to create the variable electronic display, but in the late 1990s some variable message signs began to use LEDs. He explained that LEDs were not dependent on a single light source (which could fail) and that LEDs used less power and became cheaper than fibre optics. His evidence was that by the time he left VicRoads new traffic lights were commonly using LEDs. Mr Jan said that he or anyone familiar with electronic signs, such as a variable speed limit signs, would be able to tell what light source was being used from the exterior display surface of the sign. 140 Mr Jan gave evidence that the early versions of variable speed limit signs included "flap signs" and "tri signs", which operated by rotating the physical display (not an illuminated display) to show a different speed. Later, during the 1990s, VicRoads began to develop variable speed limit signs that used fibre optics and LEDs. Mr Jan's evidence was that there were a number of such prototype signs set up on a gantry at the VicRoads facility at Mulgrave (in Bastow Place) which allowed the effectiveness of different signs under day and night conditions to be compared. He said that VicRoads had a "mock-up" board at Mulgrave on which different displays could be generated. His evidence was that VicRoads trialled flashing any of one, two or three rings of red dots to form the red annulus, although he accepted in cross-examination that in the photograph of the gantry (BDJ-2 to his 8 September 2017 affidavit) the fibre-optic speed signs had an annulus with only two rings. Mr Jan said that each ring had its own light source and that the lights could be separately flashed. His evidence was that VicRoads had at least one variable speed limit sign displaying the speed using white fibre optics and an annulus formed of two rings of red fibre optics, where either the inner ring or both annulus rings could be flashed. Mr Jan recalled doing a trial at night of a variable speed limit sign with a flashing annulus. He said that VicRoads had sourced the fibre optics materials from Mr Trebilcock, of Futura Controls, a VicRoads supplier: see below. Mr Jan deposed that he remembered "doing this work as I wanted to start developing some parameters as to what would be suitable for electronic speed signs". 141 Mr Jan also gave evidence that there was an electronic speed limit sign on the Western Highway during his time at VicRoads. He said that that sign had "to the best of [his] memory" a flashing component. He could not recall whether the sign flashed the annulus, the numerals, or both. 142 In cross-examination, Mr Jan agreed that, during the 1990s, VicRoads mostly sought to encourage industry and private suppliers to develop suitable devices pursuant to a brief or draft provided by VicRoads, since VicRoads "didn't have a lot of money to do our own manufacturing". He reiterated, however, that, notwithstanding staff retrenchments in the 1980s, VicRoads retained some engineers and some electricians, as well as the facilities in Mulgrave, where there was an electronics workshop in which VicRoads staff developed devices. 143 Mr Jan deposed that, during the 1990s, he held many meetings with representatives from a number of different suppliers at the Mulgrave facility where the test gantry (identified in BDJ-2) was located, to demonstrate and discuss prototype signs and to generate interest in developing prototypes for new types of signs. He also said that he held meetings at the Mulgrave facility with the Australian Standards committees, in the course of which he demonstrated prototype signs. His evidence was that two of the photographs in BDJ-2 were taken in the early 1990s as indicated by the signs to be seen on the gantry, and that the third photograph "looks likely to have been taken at a different time". 144 Mr Jan's evidence was that some of the products on a VicRoads product sheet dated May 1992, which he recalled from the early 1990s, had been on the gantry and that he had conducted some field tests with those products. His evidence was that the field tests had included the electronic illuminated speed limit signs, which were left installed for a week or two so as to receive comments on the signs' operation from the local councils and the public. Mr Jan also gave evidence that a number of the fibre optic signs mentioned in a VicRoads letter dated 26 August 1991 to a potential tendering supplier (BDJ-5 to his 8 September 2017 affidavit) were also manufactured for VicRoads, and that several of them had been prototypes installed on the gantry at the Mulgrave facility. In cross-examination, Mr Jan accepted that he identified the signs on the gantry by reference to that letter. He recalled that VicRoads had a number of test signs on the gantry but that he could not remember the level of detail he had provided concerning the photographs without reference to BDJ-5. 145 Further, in cross-examination with respect to his evidence about variable speed limit signs, Mr Jan accepted that at the time AS1742 did not prescribe a flashing annulus or number; rather it prescribed separate amber flashing lights or beacons, notwithstanding any VicRoads experimentation with a flashing number or annulus. He accepted that the introduction of a flashing annulus did away with the need for flashing lights or beacons. 146 Regarding the Patent, Mr Jan's evidence was that claims 12 and 13 referred to the control of the sign displays by an external sensor such as a wind sensor or light sensor. Mr Jan deposed that during his time at VicRoads there were wind detectors measuring the wind speed on the West Gate Bridge, and when wind speeds were considered to be too high, speed signs on the bridge displayed a lower speed, although he could not recall the sign system used. He also deposed that "[l]ight sensors were generally used to detect low ambient light conditions and were used on some signs to adjust the intensity of the output light from the sign during day to night operations". He referred to ice sensors in use or being trialled in his time at VicRoads, which could be linked to signs to alert motorists to icy conditions. 147 Mr Jan further deposed that the references in claims 5, 7, and 24 to 26 (inclusive) to the approximate dimensions of the signs, annulus and numerals were similar to the dimensions he recalled were prescribed in the relevant Australian Standards, having four standard sizes for speed limit signs (sizes A through D). He observed that three of these sizes were referred to in the Patent. Mr Jan deposed that the flash rate for the annulus in claim 9 and the on-to-off time ratio in claim 10 were the same as defined by VicRoads as a result of trials conducted during his time there. Regarding these trials, he deposed that the trials were "trying to find a flashing rate that gave good visibility to a motorist - not too fast that the flashing may not be observed, nor too slow that a motorist looking only briefly at the sign might miss the flashing feature". 148 Mr Jan said in evidence that claim 15 referred to "the control of the sign displays by a 'control centre'". His evidence was that during his time at VicRoads, staff in the traffic control room could switch on or off or override many of the electronic field devices. 149 In his 8 September 2017 affidavit, Mr Jan stated as follows: 75 Overall, I do not consider that there is anything described in the Patent that was surprising or other than routine as at 1999, which is when I finished working at VicRoads. All of the features that are described in the claims existed and had been used in the field, and I had been involved in trialling the flashing annulus aspects while I was at VicRoads. Having part of the sign flash so as to draw a motorist's attention to the sign was, moreover, an approach that had been used with many other types of road signs… 76 If a decision has been made to temporarily reduce the speed limit, then there will be a safety reason for that decision - this may be more congested traffic conditions, which presents the risk of more sudden stops and hence accidents, or wind, which may cause a vehicle to leave its lane because of the increased difficulty in controlling the vehicle, or the presence of a hazard such as young children (such as in school zones), an accident, or a spill. 77 Since a motorist may be accustomed to driving on that road when it has a higher, and more commonly displayed speed limit, it is clearly desirable to draw the motorist's attention to the fact that there has been a reduction in the speed limit. The use of a flashing light to do this was known, and I consider that this was, moreover, a commonly used approach for attracting a motorist's attention. One option was to use flashing amber or conspicuity lights. But the flashing of the annulus was another straightforward option, and one that I was aware of, and had moreover trialled, before 1999. Because of the fact that a speed sign has to be similar to a physical speed sign, there was a need to keep at least one red annulus ring constantly illuminated so as to maintain that similarity. If a road sign does not meet the requirements of the road rules and road regulations, then it would not be a legally enforceable sign, but could be an advisory sign. 150 In cross-examination, Mr Jan stated that he did not recall where a partly flashing annulus had been used in the field, but recalled that some fibre-optic speed limit signs had been installed on the Western Highway, and what had become known as the Monash Freeway, and that some had been installed outside a school zone at Yarra Glen. He said that he went out to one sign, a 60km/h sign, at night on the Western Highway, and that he would have gone to the sign at Yarra Glen. He accepted, however, that he was not sure which of these signs had a flashing annulus, and that he could not disagree with Mr Bean's recollection that the sign at Yarra Glen did not flash. 151 Mr Jan also gave evidence about whether the September 2001 specification disclosed the features of the claims of the Patent. Mr Jan deposed that: 80 The document describes in some detail the requirements of VicRoads for the supply of a relevant variable speed limit system. The specification describes an entire system, comprising of variable speed limit signs, as well as the sign support structures and control and communication network to integrate the system into VicRoads' network. … 82 On page 5, in section 3.0 it says that the variable speed limit sign shall be based on regulatory sign R4-1 as defined in Australian Standard AS1742-1999. … 83 Page 13 of the standard illustrates sign R4-1, which shows a standard speed restriction sign. Table 3.1 above it shows the standard outer dimensions, including for sizes A to D. 84 Page 8 of the 2001 Specification, section 4.2 specifies that while the red annulus of the R4-1 sign is to be used, the numerals are to be white against a black background. Page 20 of AS1742-1999, at paragraph 3.5.2(b)(ii) similarly provides for white numbers to be used against a black background for an electronic sign. 85 In sections 4.2 and 4.6 on pages 8 and 9 of the 2001 Specification it provides that when displaying a speed other than the 'normal' speed, the sign is to be capable of flashing part of the inner diameter of the red annulus, and a frequency and on-off time is prescribed. 86 I note that the reference to 'normal' speed is specifically to 100kph, which may be applicable to a location where the usual speed limit is 100kph and where there is an occasional reduction in that speed limit. 87 The 2001 Specification states that there are to be a 'plurality' of light emitting structures - see page 3 section 1.0 ('made up from a series of spaced elements'), and page 8 section 4.3 which describes the use of either a fibre optic display matrix or LEDs (which are further described on pages 11 to 13). 88 The 2001 Specification requires the annulus to be comprised of a number of circles - see page 8 section 4.2 and page 9 section 4.6 - the table there contemplates there being two rings for a size A sign (50% would involve flashing 1 of 2 rings, or possibly 2 of 4 rings), four rings for a size B sign (25% is 1 ring and 50% is 2 rings being flashed), and five rings for a size C sign (20% is 1 ring and 40% is 2 rings being flashed). The rest of the rings of the annulus are to remain on during the 'off' phase of the flashing sequence, as described in sections 4.2 and 4.6. 89 These references describe the basic features of claims 1, 17 and 20 of the Patent … As for the control of the signs, there needs to be either an internal controller built into the sign, or an external controller that sends a signal to the sign, or both. This is needed to tell the sign which numerals to display, and whether to flash part of the annulus or not. There are various references in the 2001 Specification to the control of the system. 152 Mr Jan deposed that the sign dimensions specified for sizes A, B and C in AS1742-1999 were similar to those specified in claims 5, 7, 24, 25 and 26 for the size of the Patent, with some limited variation. His evidence was that the additional width in the claim dimensions was likely in order to provide a more even border area for pixel displays. The limits for the height of the numerals and the outer dimensions of the annulus, as specified in AS1743-2001 (published in 2001) were the same as for claim 7. Mr Jan further deposed that the flashing rates and on-off times described in the September 2001 specification were the same as those described in claims 9 and 10. 153 Mr Jan gave evidence that there was no reference in the September 2001 specification to the flashing of part of the annulus being varied by reference to a wind sensor or a light sensor, as described in claims 12 and 13. The reference to a light sensor in this specification was in relation to its use to adjust the brightness of the sign display rather than to vary the speed and to flash part of the annulus. Mr Jan said, however, that he considered that: [T]he use of an external sensor, such as a wind or light sensor, would be a straight-forward variation of what is described in the 2001 Specification - … a variable speed limit system that was linked to wind speed was already in operation on the West Gate Bridge before 2001. 154 In relation to claims 14 and 15, Mr Jan deposed that the September 2001 specification referred to the signs being incorporated into a system, and that he understood the specification to require that the signs could be controlled by an external signal from VicRoads' traffic control centres. He understood the description of interfacing with control equipment and with a central computer also to be a reference to those traffic control centres or an equivalent command centre. 155 Mr Jan's evidence was that in field systems where more than one changeable sign is being used, one of the signs may be used as a "master sign" that sends commands to switch on or off concurrently to one or more "slave signs" via electronic or radio signal to ensure the "slave signs" are concurrent with the "master signs". This would entail only the master sign being connected to a central or external control. This method was particularly important where two or more changeable speed signs faced the same oncoming traffic, and was often used at school speed zones. 156 Mr Jan deposed that he could not see an express reference to claim 16 in the September 2001 specification, but that his understanding was that the simplest scenario for varying a system of speed signs, and one which created predictability for motorists, was a time-based system. He said that: Based on my experience with any variable signs, the most common form of control was an in-built time clock which was set for pre-determined changes (day-of-week and/or time-of-day). This would be the simplest implementation of a variable speed limit system, and I therefore understand that the 2001 [September] Specification is addressed to this scenario as a minimum scope of operation. 157 In relation to claim 27, Mr Jan deposed that the September 2001 specification contained a description of a supporting frame and supporting structure, at pages 5 to 7, section 3. 158 Mr Jan's 8 March 2018 affidavit responded to Mr Prasad's first and second reports (see above). Mr Jan deposed that he understood the reference in Mr Prasad's first report to manual speed limit signs being "rotated" as a reference to the "flap-signs" to which he referred in his own evidence, which could be manually or electronically changed. He said that the "tri signs" were always electronically changed. 159 Mr Jan specifically disagreed with Mr Prasad's statement that the use of a flashing feature, specifically the use of certain rings of the annulus as a flashing feature, to attract a motorist's attention was inventive or other than obvious. Rather, his evidence was that the use of flashing features for this purpose was widely used, including in relation to speed signs before the priority date of the Patent. In Mr Jan's opinion, while the flashing inner annulus ring or rings and the flashing yellow lights were different means of incorporating a flashing component into the electronic speed sign, he could not see any reason why either option was necessarily better than the other. His evidence was that the use of flashing annulus rings had no relationship to the size of the sign. He said that there was sufficient space in each corner of a sign to locate yellow flashing lights, especially in a sign of the dimensions required in the Australian Standards. His assessment was that any difference between the two solutions in terms of complexity was minimal. Mr Jan continued: 16 …Yellow flashing lights had generally been used to warn motorists of danger or a need to slow down - they were, for example, used for pedestrian crossings, to warn motorists of the start of tram stop barriers, and they were the fall-back mode for traffic signals (traffic lights), as well as being used on tow-trucks and roadworks vehicles. The use of flashing yellow lights may therefore be more effective in attracting a motorist's attention, and in simultaneously communicating that there is either a danger ahead or a need to slow down, or both. 17 On the other hand, flashing the internal annulus rings may be less distracting for a motorist, and may focus their attention more effectively on the speed numerals within the annulus rings. 18 While it is possible to theorise as to which design choice is more effective for a majority of motorists, a proper assessment would require a trial to gauge motorists' actual responses and perceptions. Such an assessment would involve different lighting conditions, and motorists of different ages, with different levels of eyesight and different levels of driving experience. 160 Mr Jan disagreed with Mr Prasad's evaluation that it was inventive to have the speed limit change by reference to a signal from an external sensor, or a pre-programmed signal to change the speed, or from a signal from a control centre. Mr Jan's evidence was that the use of pre-programmed controls were known and used for a range of signs, including variable speed limit signs before 2000. He instanced the options for control of the "flap sign" indicated in the 1992 VicRoads Product Sheet, to which he had referred: see [144]. He added that since prior to 1999, and from about the late 1980s or early 1990s, VicRoads had a control centre capable of remotely controlling electronic signs, including variable speed limit signs; that the control centre could change signs to a flashing amber setting on request; and that it could also change the speed limit displayed on the "tri signs" on the West Gate Bridge. He added that the use of sensors to control electronic speed signs, such as the use of the wind speed sensors to control the "tri signs" on the West Gate Bridge, was also known prior to 1999. Mr Jan's view was that the benefits listed by Mr Prasad related to the fact that electronic signs were being controlled remotely. That benefit, Mr Jan deposed, was already being achieved with variable speed limit signs that existed by 1999 when Mr Jan left VicRoads. 161 In response to Mr Prasad's second report, Mr Jan deposed that some electronic speed limit signs may have had only two yellow lights, rather than four. He could not specifically recall whether warning signs on trailers flashed the speed numerals or not. In response to Mr Prasad's reference to the removal of "external signs/devices", Mr Jan said that the yellow flashing lights could be within the sign itself and were not necessarily external. He said that he did not otherwise understand what was meant by the sign being "used in isolation" as stated by Mr Prasad. 162 In response to Mr Bean, Mr Jan deposed that VicRoads' Products Sheet was circulated outside VicRoads as well as distributed internally, including being distributed and discussed in Australian Standards committee meetings. He considered that it was very likely that copies were made available to suppliers, given VicRoads' interest in making suppliers and consultants aware of new products being developed. 163 Mr Jan's evidence was that it was entirely possible Mr Bean was not present during the trials of the variable speed limit signs mentioned at [140] above, and that he had not seen the variable speed limit sign using white fibre optics to display the speed with an annulus formed of two rings of red fibre optics. Mr Jan said that this sign was "one that [he] had [VicRoads'] technicians prepare using a peg board, and it was therefore temporary in nature".

Notice to produce of 28 April 2018 164 I would note at this point that some emails said to relate to Mr Jan's evidence (and other documents said to relate to the evidence of Mr He: see [237] and following) were produced during the hearing pursuant to a Notice to Produce dated 19 April 2018 served by Axent on the respondents. It is convenient to discuss this Notice to Produce in the following paragraphs. 165 The Notice to Produce was served on the respondents by Axent on 19 April 2018 and subsequently filed on 2 May 2018. It sought five different categories of documents. In the first category were Mr Sozio's red ledger books (red ledgers), which he said he had recovered from storage: see [200] below. In the second category were documents "provided to or viewed by" Mr Jan in the course of preparing his affidavit evidence and not referred to in those affidavits. In the third category were documents recording any oral instructions given to Mr Jan in the course of preparing his affidavit evidence. 166 The fourth category related to Mr He, but it is convenient to mention this category here. In this category were the original electronic files from which ZQH-5, ZQH-6, ZQH-7, ZQH-8 and ZQH-9 were derived, some of which are referred to below: see [243]. 167 There was a fifth category that covered "all emails and notes of communications" passing between the respondents' solicitors and the solicitors for VicRoads in connection with the Patent in suit. 168 The respondents did not object to production of the documents in the first and fourth paragraphs. They did, however, object to production of the documents in the second, third and fifth categories, and applied to set aside these paragraphs of Axent's notice to produce. I accepted that the notice to produce should be set aside with respect to the fifth category, but not with respect to the second and third categories: see Axent Holdings Pty Ltd v Compusign Australia Pty Ltd (No 4) [2018] FCA 674 (Axent (No 4)). On 26 April 2018, the respondents produced the documents in the second category and informed Axent and the Court that there were no documents in the third category. 169 The respondents subsequently produced further documents that they had initially not understood to fall within the second category. These further documents were emails, with attachments, sent to Mr Jan by the respondents' solicitors, and were produced by way of a USB on 27 April 2018. To obviate the need to re-call Mr Jan, the parties agreed to file the document "List of email communications with Barry Jan produced pursuant to the Applicant's Notice to Produce". This document was filed on 30 April 2018. The parties did not, however, further indicate the status of this list of emails. It should be borne in mind that none of these listed emails was otherwise in evidence, a fact that the Court brought to the parties' attention in its email of 10 May 2018. The Court proposed that the parties address this issue in closing submissions. 170 In response to an email from my associate dated 16 October 2018, in which Axent was requested to clarify whether the list mentioned at paragraph [41] of its submissions as to admissibility issues filed on 16 May 2018 was a reference to the agreed list of the emails sent by the respondents' solicitors to Mr Jan, Axent advised that this was not a reference to that list but to a different list. Axent stated that the list mentioned in paragraph [41] of its reply submissions was the list of annexures to Mr Leonidas' affidavit of 3 November 2017, which had been previously given to the Court. This is discussed below. The agreed list of emails was eventually addressed at [19]-[21] of Axent's reply submissions regarding admissibility. These submissions are also discussed below. 171 During the hearing Axent's counsel indicated that Axent had encountered difficulties with accessing the documents in the fourth category of the notice to produce of 19 April 2018 in the form the respondents had produced them. Axent's solicitor, Mr Leonidas, made an affidavit dated 30 April 2018 said to touch some of these issues: see below.

Robert Priest 172 At the time of the hearing, Mr Priest was the Technical Liaison Officer between VicRoads and the Department of Justice and Regulation, working within the ITS group. This group was responsible for implementing electronic traffic technology to help reduce traffic congestion and improve traffic flow on roads in Victoria. Mr Priest commenced working with VicRoads in about 1989 as a labourer in what was then called the Traffic Systems Operation group. Since then, he has held various roles at VicRoads, including Contract Manager and Project Officer. In 2002, he was the Project Officer for the ITS group. In this role he was involved with the preparation of tender documents, contract management, inspection of electronic products during factory acceptance testing, and commissioning of the installed electronic products. 173 Mr Priest was familiar with Axent and its facilities prior to his involvement in the Western Ring Road Project. He had periodically attended Axent's premises as a contract manager for other VicRoads contracts awarded to Axent in the mid-1990s and early 2000s for the manufacture and installation of variable message signs. As a contract manager he had attended Axent's premises to inspect those signs prior to their installation. In cross-examination, Mr Priest accepted that, when he visited suppliers' premises, he understood that what he saw there should not be communicated to other suppliers. 174 Mr Priest was Project Officer for the Western Ring Road Project in 2001 and 2002 and, for the purposes of the VicRoads Contract with Axent (see [178] below), Mr Priest was a Superintendent's Representative. In this capacity he was able to instruct Axent to perform work in accordance with the VicRoads Contract, rectify issues arising during the project, inspect work performed by Axent under the VicRoads Contract, and authorise payment of invoices issued to VicRoads by Axent under the VicRoads Contract. 175 Mr Priest explained that Mr Petridis and Mr Bean were also Superintendent's Representatives for the Western Ring Road Project. The Superintendent for the VicRoads Contract was the VicRoads Regional Manager of the Metropolitan North West Region. Mr Priest said that he reported to Mr Petridis, who was the Team Leader and the VicRoads employee primarily responsible for the project. Mr Priest agreed with Mr Bean that Mr Bean's involvement in the Western Ring Road Project substantially decreased after the VicRoads Contract was awarded to Axent. 176 Mr Priest's evidence was, and I accept, that the Western Ring Road Project was designed to improve the traffic flow on the Western Ring Road by providing the capability to adjust maximum speed limits by reference to existing traffic flow conditions. VicRoads' traffic control centre could decide to reduce the speed limit, or the computer system could determine to do this by reference to the system's programming based on data obtained from existing freeway data stations. 177 Mr Priest gave evidence, and I accept, that, in conformity with its standard practice for significant projects, VicRoads invited a number of suppliers to tender for the Western Ring Road Project, and spent time planning the project and developing the specifications. These specifications were provided to contractors to inform them of the functional requirements of the system they were tendering to supply. The successful tenderer was required to supply and install approximately 80 variable speed limit signs and their bases, and connect the signs to a power source and local communication system. The successful tenderer was also required to develop and implement a sign management system to control the signs, which would be capable of interacting with VicRoads' existing computer network. 178 By letter dated 21 February 2002, Axent was advised that it was the successful tenderer for the Western Ring Road Project and was awarded the VicRoads Contract "for the design, manufacture, installation, commissioning, maintenance and warranty of a Variable Speed Limit System on the Western Ring Road". Mr Priest's evidence was that the project delivery included: (1) the provision by Axent of its detailed designs, including details of proposed technology; (2) Axent's working with VicRoads to ensure the proposed design would meet VicRoads' requirements, including for interoperability with VicRoads' systems; (3) the provision by Axent to VicRoads of some variable speed limit signs for factory acceptance testing prior to installation to ensure they met all functional and structural requirements; (4) installation and wiring of sign pedestals; (5) installation of the signs on the pedestals; and (6) commissioning of the installed signs. 179 Mr Priest said, and I accept, that he was involved in the Western Ring Road Project from the preparation of tender documents to practical completion. He specifically refuted Mr Fontaine's statement to the effect that he did not have any involvement in the preparation of tender documents or related correspondence for the project. Mr Priest said that, as Project Officer, he attended the majority of the project meetings held at Axent's offices in Notting Hill, at which Mr Fontaine, Mr Cestnik, Mr Bean and Mr Petridis were also in regular attendance. I accept Mr Priest's evidence in this regard. There is no basis shown to doubt his own account of his duties and activities at VicRoads in the relevant period. I would reject Mr Fontaine's evidence to the contrary, bearing in mind that Mr Fontaine was not privy to the internal allocation of duties within VicRoads. 180 Mr Priest's evidence was, and I accept, that during the factory acceptance testing stage, he went to Axent's offices on several occasions to inspect a number of variable speed limit signs manufactured by Axent for installation as part of the project. Both VicRoads and Axent employees were present at these inspections. Factory acceptance testing involved turning the signs on and testing that they functioned as required prior to installation. This included ensuring that when turned on and controlled to display 100 km/h, the white LEDs illuminated to display "100" clearly and the red LEDs illuminated to form a solid annulus, and when controlled to display a reduced speed, the numerals were similarly clearly displayed and the red LEDs formed an annulus, one ring of which remained solid and another flashed. 181 Mr Priest's evidence was that during the commissioning phase, Mr Priest and Mr Cestnik of Axent (together with, for some stages, Mr Zammit) completed a series of checks on each of approximately 80 signs on the Western Ring Road over several nights. Commissioning involved turning each sign on and adjusting its brightness to take account of the ambient light levels; and checking the functionality of each sign by manipulating the controls locally and remotely. 182 Mr Priest's evidence was, in substance, that local commissioning entailed varying the speed on each sign incrementally, ensuring that the correct speed was displayed, and that the annulus of each sign flashed when the speed was reduced below 100 km/h, and varying the displayed speed on each group of signs incrementally, ensuring the group changed speed together and that the annulus of each sign flashed in unison when the speed limit was reduced below 100km/h. I note that, in cross-examination, Mr Priest accepted that it was possible that Mr Cestnik was correct in his recollection that VicRoads did not test the partly flashing annulus feature as part of local testing in the commissioning process. I return to this last-mentioned matter below. 183 Mr Priest also gave evidence that remote commissioning included checking that the signs communicated with VicRoads' traffic management centre (traffic management centre). Mr Priest deposed that in this commissioning it was necessary to check that the traffic management centre could remotely vary the speed limit displayed on the signs and that each group of signs reacted accordingly, using the software developed by Axent (Axent Platform) as part of the Western Ring Road Project. Mr Priest's evidence was that he observed locally to ensure that a group of signs changed speed together, and that the annulus of each sign in the group flashed in unison. It also involved checking that when the traffic management centre returned the speed limit to 100km/h (which was the default limit), the signs returned to displaying the default speed limit and the annulus of each sign in the group stopped flashing. This further involved checking that the simulated communication faults (through the Axent Platform) were received by the traffic control centre and that the Axent Platform communicated with VicRoads' freeway data station software (VicRoads Platform). Mr Priest's evidence was that: [T]his step in the commissioning process was performed from the [traffic management centre] and observed remotely in the [traffic management centre] using CCTV cameras positioned along the Western Ring Road that were connected to monitors in the [traffic management centre]. 184 I interpolate here that, in giving his evidence, Mr Priest described the traffic management centre as being in Kew and, in cross-examination, it was put to Mr Priest that the traffic management centre was in Camberwell at the time of the commissioning. Mr Priest's evidence was in substance that the traffic management centre moved from Camberwell to Kew at some time during the Western Ring Road Project but that he could not recall the date. Mr Priest accepted that the traffic management centre may still have been in Camberwell as at 27 November 2002 when taken to an email of that date indicating that this was a possibility. He also accepted that it was possible that the traffic management centre was still at Camberwell in December 2002, as Mr Zammit deposed. With the passage of time, it is unsurprising that details of this kind fade from an individual's memory: see [651] below. 185 Mr Priest refuted Mr Fontaine's statement that the commissioning was undertaken at Axent's factory prior to the installation of the signs on the Western Ring Road. Mr Priest's evidence was that it was not possible to conduct all aspects of the checking process, for example, ensuring that the traffic management centre was able to vary the speed limit of groups of signs remotely, until the signs were installed on the Western Ring Road. He added that it was important to check that the signs functioned as specified after installation but before practical completion of the VicRoads Contract to ensure the safety of motorists and that the system functioned correctly. I return to this below. 186 Mr Priest accepted that it was correct to say, as Mr Zammit did, that the Axent Platform had a functionality to test the signs without displays in the field and that this testing had occurred, although he could not recall the timing of that simulation testing. His evidence was that it would most likely have occurred prior to commissioning and that on site or in the field testing formed part of the commissioning process as he described it. 187 In cross-examination, Mr Priest did not dispute that when the signs were installed on the Western Ring Road, they were covered or turned away from oncoming traffic. Mr Priest deposed, however, that the signs were uncovered and visible to traffic on at least some occasions prior to practical completion of the Western Ring Road Project. 188 Mr Priest was unable to comment on Mr Zammit's statement that the software was written in such a way that the signs could not flash the annulus if they displayed a speed of 100 km/h, although he agreed that Mr Petridis had instructed that the variable speed limit signs were not to drop below 100 km/h until the necessary media and education program was put in place. Mr Priest also said that that Mr Bean's description of the commissioning activities was accurate for traffic signals and message signs, but not for speed limit signs and that Mr Bean was not involved in the commissioning process. 189 Mr Priest's evidence was, moreover, that: 15 Due to the amount of signs that each had to be commissioned on the Western Ring Road and the number of checks that had to be completed for each sign, commissioning took several nights to complete the brightness adjustments, and to ensure that each sign was operating correctly, and was communicating correctly with VicRoads' systems. 16 The Western Ring Road remained open while we undertook commissioning of each sign and the commissioning was visible to motorists who were driving on the road at the time. I have a recollection that VicRoads required that Axent position portable variable messaging signs in advance of the signs being commissioned to inform motorists that the signs were undergoing commissioning. 17 The commissioning process took several days because part of the process involved driving by each group of signs whilst operational to simulate what motorists would see as they were passing the signs, rather than only observing the signs in operation by the side of the Western Ring Road. Once we had completed the drive-by, we then had to exit the Western Ring Road, come back, and repeat the drive-by process as part of the commissioning process for the next group of signs. 18 The completion of this testing to VicRoads' satisfaction was one of the steps that had to occur before the project reached the stage of 'practical completion'. 190 Given the passage of time, it was unsurprising that Mr Priest had no independent recollection of the date when the commissioning process was completed, and needed to refer to various contemporary documents (including the master schedule (RP-2)), the minutes of a meeting on 13 September 2002 (RP-3), and Axent invoices (RP-4 and RP-5) to identify the relevant date. Referring to RP-2, RP-3 and RP-4, he said: [The] commissioning of the signs on the Western Ring Road Project occurred over nine days between 26 August 2002 and 3 September 2002. This indicates to me that commissioning of the signs was delayed from 24 June 2002 to 22 July 2002, as reflected in the master schedule, to 26 August 2002 to 3 September 2002... 191 Axent's invoice RP-5, issued to him as contract manager by Mr Cestnik, led him to conclude that practical completion had occurred by 3 October 2002. I interpolate here that an email sent on 21 October 2002 by Mr Priest to Mr Cestnik (and copied to Mr Petridis and Mr Bean) indicated that in fact the practical completion date for the variable speed limit system was 1 October 2002. 192 Mr Priest's evidence was (and I accept) that practical completion did not mean the system was operational. Mr Priest accepted (and it seems to be the case) that, having regard to some subsequent emails to which he was taken in cross-examination, including an email sent on 20 November 2002 by Mr Petridis to Mr Fontaine (and copied to Mr Zammit, Mr Bean, Mr Priest and another VicRoads employee) the system was "live" on or shortly after 21 November 2002. 193 In response to Mr Fontaine, Mr Priest did not recall that he was shown a prototype of Axent's variable speed limit sign during any meeting at Axent's offices during 2000, and he had no recollection of attending a meeting at Axent's office in September 2000 or around that date, where he observed a demonstration of such a prototype. On being shown a photograph of Mr Fontaine, Mr Cestnik, Mr Bean and himself in front of a variable message sign at Axent's offices in cross-examination, Mr Priest reiterated that he did not recall being shown a prototype of the sign at such a meeting. His evidence was that the photograph showed a variable message sign, which he believed was originally made by Alite, a company that manufactured and supplied signs to VicRoads in the mid-1990s, and was retrofitted by Axent for VicRoads at a later date. Mr Priest said that he believed that he was at Axent's office to inspect the retrofitted variable message sign in his capacity as a VicRoads contract manager.

Salvatore Sozio 194 Mr Sozio is the sole director of Hi-Lux. At the time of the hearing, he had worked in the traffic signalling industry for almost 50 years, with almost 30 years running the company now known as Hi-Lux. Hi-Lux had worked with VicRoads on maintenance contracts since the 1990s, including the retrofitting of quartz halogen lamps into traffic lights and the manufacture of fibre optic signs. Mr Sozio had been aware of the Patent since at least 26 November 2009. 195 Mr Sozio deposed that as early as 1991 VicRoads had requested suppliers of fibre optic speed signs to supply signs with the functionality to flash part of the sign display in order to denote a change in speed. He referred to a VicRoads Request for Quotation (RFQ) for fibre optic speed signs dated 26 August 1991, noting there were to be two "display segments" on the sign in question (the digits segment and the red annulus segment). With respect to the 90 and 60 km/h speed limit signs, the RFQ required that: The sign shall incorporate the facility to connect both, either or none of the two display segments … to the flasher unit. 196 In this context, Mr Sozio deposed that a drawing of a Hi-Lux speed sign dated 15 December 1991 showed a mechanism for a "flasher relay" on the red annulus consistent with the RFQ. He gave evidence that a number of these signs were installed on a rack at the VicRoads premises at Bastow Place, Mulgrave, and that such signs included a 90 km/h sign and a 60km/h sign with flashing annulus. He added that, on occasions, at VicRoads' request, Hi-Lux made alterations to existing prototype signs on the rack to enable VicRoads to test the variations. Mr Sozio further deposed that, in 1992, VicRoads contracted with Hi-Lux to install the 90km/h sign on the Western Ring Road Freeway. His evidence was that this sign contained a flasher unit that could have been used to flash the annulus, but that VicRoads had not asked to use that feature when it was installed. 197 In response to Mr Fontaine's evidence concerning the 15 December 1991 drawing (see [196] above) Mr Sozio deposed that the drawing was of "Sign No 5", as described in the RFQ. The RFQ description of this sign stated that it was a standard 60 km/h speed plate sign "with black letters within a red annulus, all on a white background" and that the "'red' annulus portion of the display shall be highlighted using fibre-optic pixel technology". In response to Mr Fontaine's statement that fibre optic signs would be flashed in their entirety, Mr Sozio deposed that fibre optic signs before 2002 could and did utilise more than one lamp box to enable different parts of the sign to be illuminated. This permitted one part of a sign to be flashed while the rest was not. Mr Sozio's evidence was that this was the case for, among other signs, the Yarra Glen Primary School signs. 198 Mr Sozio deposed that in 1992 VicRoads produced a product sheet featuring some of the newer signs then being trialled by VicRoads, which included two speed limit signs manufactured by Hi-Lux and supplied to VicRoads. Mr Sozio deposed that features of the sign could be flashed by flasher units inside the housing, located within separate compartments, so that different features could be flashed independently. Mr Sozio annexed a copy of the VicRoads product sheet (SVS-3) to his 8 September 2017 affidavit, which regarding "Fibre Optic Speed Signs" stated that "[v]isual impact is improved by continuous flashing of the sign legends. Both the annulus and speed legend are illuminated, giving excellent visibility during day and night conditions". 199 Mr Sozio also deposed that around this time, in producing experimental speed signs for VicRoads trialled at Mulgrave, Hi-Lux made the changeable "tri sign", which could change the speed limit at a signed location to "one of up to three possible variants" via the use of rotating panels. A sign of this type was, so Mr Sozio said, installed on the West Gate Bridge during the 1990s, which operated so as to reduce the speed limit if the wind was too strong. Mr Sozio also deposed to the production of a "flap speed sign" in the early 1990s, which was also pictured in the 1992 VicRoads product sheet. 200 Mr Sozio said in evidence that he had recovered several red ledger books from storage. His evidence was that the red ledgers dated back to 1992 and contained pencil entries in which Hi-Lux had recorded all jobs for which it invoiced, including product sales, repairs and maintenance jobs. He said that the red ledgers recorded the progress of jobs from quote through to invoice, and included an entry dated 11 March 1999 for the supply and installation of two speed signs for VicRoads, listed as Order No. R04037. Although this entry did not list the installation site, Mr Sozio deposed that the date in the entry fitted with his memory of the timing of Hi-Lux's installation of variable speed limit signs at the Yarra Glen Primary School. In cross-examination, however, Mr Sozio was taken to a VicRoads Purchase Order record, which he accepted showed that order number R04037 as recorded in the red ledgers did not concern the Yarra Glen school installation. 201 Nonetheless Mr Sozio gave evidence that he attended the signs that Hi-Lux had installed at the Yarra Glen Primary School on a number of occasions, including in relation to some faults. He deposed that the signs had two rings, with the inner ring flashing when the sign displayed a speed of 40 km/h, and not flashing when the sign displayed a speed of 60 km/h. Mr Sozio deposed to the fact that, at the time, VicRoads required that there always be at least one solid ring that did not flash. He said that the school crossing attendant could use a key to switch between the 40km/h and 60km/h modes. When Mr Bean's evidence about the Yarra Glen Primary School signs was put to him, Mr Sozio specifically disagreed, reiterating that the signs had a flashing red annulus and no flashing yellow lights. Mr Sozio said that Hi-Lux did not supply any signs with yellow flashing lights on them to this location. 202 Mr Sozio deposed to having located other entries in the red ledgers including: (1) an entry dated 12 July 2002 for a retrofit of a 60/40 km/h speed sign at the request of Mike Paterson of VicRoads; and (2) an entry dated 16 July 2002 for a retrofit of a 60/40 km/h speed sign for Nilsen Electrical. He recalled that the retrofits involved modifying the signs so that they would display each of 40 km/h and 60 km/h and flash the inner annulus for the lower speed limit display consistently with the September 2001 specification. In cross-examination, Mr Sozio accepted that these records did not state that the retrofits contained a partly flashing annulus, but he maintained that retrofitting signs meant incorporating a partly flashing annulus, noting that after September 2001 all variable speed limit signs required a partly flashing annulus. He ultimately accepted, however, that it was possible that the retrofit might have involved merely changing a standard fixed sign to a variable speed limit sign, without the addition of the partly flashing annulus. 203 Mr Sozio further deposed that he had also recovered from Hi-Lux's records a VicRoads document marked "Fibre Optic Display Signs (General Requirements) Revised March 1995" (SVS-5 to his 8 September 2017 affidavit) which set out the requirements for a variety of types of signs including speed signs, and specifically mentioned a "variable flasher unit" to be incorporated within the sign. 204 Mr Sozio gave evidence that he had located a quotation that Hi-Lux provided to VicRoads dated 28 February 2001 for "seven 50/60 Fibre Optic Changeable speed signs" that were "fully compliant to VicRoads specification". He stated that the specification referred to was a VicRoads Specification for Changeable Fibre Optic Speed Restrictions Signs dated January 2000, which he had also recovered from Hi-Lux's records. His evidence was that, although dated January 2000, the specification number (containing the year "1999") indicated that this specification was likely to have been first available in 1999. This specification detailed requirements concerning the presence of a variable flasher unit and variable lamp dimming capability for times of low ambient light. Mr Sozio said that a variable speed limit sign shown in a photograph on page 6 of the specification was a sign manufactured by Hi-Lux. Mr Sozio's evidence was that VicRoads required Hi-Lux to keep the speed limit digits and the annulus visible at all times and, in consequence, the only conspicuity option to denote a change in speed (without adding external beacons) was to flash part of the annulus. Mr Sozio remained firm when he said in cross-examination that, contrary to the evidence of Mr Bean, the flasher unit in this specification was a general unit for all types of flashing signs, and was not limited to variable message signs as Mr Bean had said. 205 In his 8 September 2017 affidavit, Mr Sozio deposed that Hi-Lux began trialling LEDs in signs in about 1995, and in 1997 was manufacturing LED signs. His evidence was, and I accept, that the LED signs were featured in an article, "Signs of the times", authored by him and his then co-director, Archie Russell, in the trade magazine, Traffic Technology International '97. An advertisement at the end of the article advertised Hi-Lux traffic systems and products, including a variable speed limit sign, in which the 60 km/h limit was displayed in LEDs within an annulus consisting of two LED rings. Mr Sozio also relied on a quotation and an invoice from a Japanese company (Nichia Chemical Industries Ltd) that he had located in Hi-Lux's records, recording that Hi-Lux had ordered LEDs from Nichia in October 1998. He also relied on a further Hi-Lux record dated 26 May 1997 recording the supply of two LED speed signs for VicRoads in Geelong. 206 Mr Sozio deposed that Hi-Lux used LED technology in a range of its signs in the late 1990s, including what he understood to be the first ever trip information sign in Kings Way in Melbourne in or about 1999, and in an LED "strip-map" prototype supplied to Mr Jan at VicRoads for evaluation showing estimated travel times (although Mr Sozio did not believe this prototype was ever installed). He said that Hi-Lux began using LEDs in the mid-1990s because it was the next technological advancement in signage illumination, and an attractive alternative to fibre optic technology, due to the increased life and energy efficiency of LEDs and the fact that they required less depth in the housing box. Mr Sozio said that fibre optic signs were gradually phased out until they were taken out of the VicRoads specification completely in around 2003. 207 Mr Sozio's evidence was in effect that Hi-Lux had been developing its capabilities in manufacturing electronic variable speed limit signs prior to October 2002, and had been offering electronic variable speed limit signs since prior to October 2002 as part of its product range. His evidence was that from the time Hi-Lux received the September 2001 specification he had decided that Hi-Lux would include as part of its product range signs that would meet the specification's requirements. Specifically, these signs would be able to display more than one speed in white speed numerals against a black background using LEDs, and have red annulus rings that the customer could control so that the inner annulus rings flashed when displaying lower speed limits. His evidence was that since prior to October 2002 Hi-Lux had consistently offered such signs as part of its product range. 208 Mr Sozio's evidence was that he had received an advance copy of the September 2001 specification before receiving the tender documents for the Western Ring Road Project in mid-October 2001. Hi-Lux had given VicRoads an expression of interest in April 2001, as part of a joint bid for the contract for the Project, and the tender documents had included that specification as well. Mr Sozio's evidence was that Hi-Lux had ultimately decided to supply pricing to various tenderers for the variable speed limit sign component of the Project instead of proceeding to tender. 209 Mr Sozio gave evidence that he had recovered a number of disused speed signs from a Hi-Lux warehouse, including a fibre optic variable speed limit sign that had been made by Hi-Lux at some earlier time. His evidence was that the sign had the capacity to change from 60km/h to 40km/h and, when changed to 40km/h, it had an inner annulus ring flashing while the outer annulus ring remained illuminated. He said the sign had a control board marked as manufactured in 1998. His evidence was that the sign was the same as the signs that Hi-Lux installed for the Yarra Glen Primary School, in that these were fibre optic variable speed limit signs that flashed part of the annulus. His evidence was that the sign was consistent with the fibre optic variable speed limit sign that Hi-Lux had produced from early 2000 until late 2003 or early 2004 and that had been installed at various sites in Melbourne until replaced by LED signs from 2004. 210 In cross-examination, Mr Sozio readily accepted that the date on the control board did not establish that the sign was made on that date, but disagreed with Mr Zammit's evidence that it was unusual to have the word "date" on the control board and more than one PCB. Mr Sozio acknowledged that some of the components on the boards were different, but said in evidence that "[t]hey could have been changed at any time", adding "they're consumable items, if they've got a fault on them". Mr Sozio accepted that a second board could have been added in order to make the sign partly flash the annulus, "anywhere between 2000 and when we found it". 211 Mr Sozio disputed Mr Fontaine's and Mr Bean's evidence to the effect that Hi-Lux was late in developing LED speed signs and did not have a sign in 2003 that complied with the September 2001 specification. Mr Sozio's evidence was that Hi-Lux made an electronic speed sign in 2003 and provided it to VicRoads (referring to an email chain from October 2003 between himself and Mr Bean in which Mr Bean confirmed that a Hi-Lux "LED ESLS" sign had been delivered to the VicRoads office on 22 October 2003). Although his evidence was that Hi-Lux had not received VicRoads' type approval by 31 October 2003, Mr Sozio said that its sign was being assessed by then. 212 In his 8 September 2017, 8 March 2018 and 8 March 2018 affidavits, Mr Sozio gave evidence about receiving a number of computer aided drawings, with an index, from Mr Trebilcock of Futura Controls in 2008 following Mr Trebilcock's retirement. The drawings and index indicated that Futura Controls had prepared drawings depicting a proposed layout of a variable speed limit sign with an illuminated annulus in May 2000, November 2001 and, for Hi-Lux, in July 2002. Axent challenged the admissibility of the drawings and an index that related to them. I discuss Axent's objection and the evidence relating to it below. 213 I note that, in his 8 March 2010 affidavit, Mr Sozio also gave evidence in support of Hi-Lux's s 163 defence, which is discussed below.

Peter Taranto 214 At the time of the hearing, Mr Taranto was a software developer at Hi-Lux. He had been employed at Hi-Lux since July 2008, and earlier he had worked on software development for approximately 12 years, first on a project at La Trobe University and subsequently at Datalink Technologies. At Hi-Lux he was responsible for writing software for different types of signage and control systems. Mr Taranto deposed that he had a good knowledge of the components and design of Hi-Lux's signs, this being necessary for his work as a software developer. 215 Mr Taranto's evidence was relevant to whether Hi-Lux had directly infringed any of the claims of the Patent. He was an honest and relevantly knowledgeable witness, whose evidence I accept. 216 Mr Taranto deposed that between 2 December 2010 and 28 March 2018 (when he affirmed his affidavit) Hi-Lux had sold or offered for sale four types of variable speed limit signs: school zone/shopping strip signs, South Australian signs, trailer signs and lane use signs. He added that, categorised by their method of control, these four sign types fell into four categories: school zone/shopping strip signs, "master" variable speed limit signs, "slave" variable speed limit signs, and lane use signs. He said that the school zone/shopping strip signs, the South Australian signs and the trailer signs were all supplied with an in-built light sensor to measure the ambient light in the surrounding area, and adjust their display accordingly. 217 Mr Taranto's evidence was that the school zone/shopping strip signs had only been sold in the "B" size and in Victoria. These signs were configured to display two speeds, where the upper speed was shown within four solid rings and the lower speed generally within three flashing rings and an outer solid ring. Within each such sign was a SIU, which was the control module for the sign and communicated with the display control card (DCC) in the sign, directing the DCC as to how the DCC controlled the operation of the LED matrices. The DCC turned the LEDs on and off, regulated their intensity, and monitored their operation (including reporting faulty LEDs). To communicate with the DCC, the SIU used a communication protocol developed by Hi-Lux, known as the HTS protocol. The SIU interfaced externally with the control system operated by the relevant roads authority, known as a network management system (NMS), using a protocol developed by Hi-Lux and known as the Electronic Speed Limit Sign Protocol. 218 Although Hi-Lux's SIU was programmed with a range of commands that could be sent to the DCC, Mr Taranto's evidence was that, in order for the sign to display a particular display, the SIU needed to be configured by the customer. The customer would upload a "calendar" into the SIU directing it as to the display configuration required at various times of day; the SIU would then send the appropriate command to the DCC; and the DCC in turn would direct the corresponding LED matrices to illuminate. 219 Mr Taranto's evidence was that the SIU stored up to eight operating schedules, each or any combination of which may be scheduled on a 365-day calendar to operate for the current date. He said that a calendar may only be uploaded to the sign by using the NMS. Once the calendar has been uploaded to the sign, the sign will then run autonomously as directed by the calendar until the calendar runs out or the sign receives a manual override. The operator of the signs may use the NMS to manually override the display from the control centre, and may also change the number of rings that are flashed, from zero to four of the four rings, if the lower speed limit is displayed. 220 Mr Taranto gave evidence that the DCC for the school zone/shopping strip sign is configured with two "maps" (being one for each speed limit) corresponding to a different visual display. In order to activate the display, the SIU sends an HTS protocol command to the DCC that specifies which map to activate, as well as the number of annulus rings to flash. His evidence was that the signs will only display a speed limit after having been connected to the NMS and having received a calendar from the NMS that tells the sign when to operate. Communication occurs based on the sign number allocated to that sign and the IP address of the sign. Mr Taranto's evidence was that Hi-Lux did not operate or program the NMS. Rather, the NMS was operated by the roads authority or by contractors engaged by the roads authority. 221 Respecting the "South Australian" signs, Mr Taranto deposed that these signs had only been sold in South Australia for two projects: the Southern Expressway duplication project (C-size signs) and the Adelaide Entertainment District project (B-size signs). Again, Mr Taranto's evidence was that before the signs would display anything, they needed not only to be connected to a power source, but also the SIU needed to receive a command from the road authority's control centre, telling it what to display. The SIU would then send a corresponding command to the DCC. If the SIU ceased to receive these commands, the sign would turn off after a period of one minute. 222 Mr Taranto's evidence was that each of the South Australian signs had an inbuilt DCC, containing maps and "sequences" (a series of maps set to display for a period of time in succession) that had been loaded onto them. The SIUs for the Southern Expressway signs were located in a cabinet on the side of the road, with each SIU used to send commands to a group of three signs, to communicate with the roads authority control system, and to ensure that the signs in the group were all showing the same speed. Communication with the control system operated by the roads authority (STREAMS) used a protocol known as the RTA protocol (TSI-SP-003) developed by Roads and Maritime Services in New South Wales. In order to have the signs display a speed, the road authority used STREAMS to communicate the required sequence number to the SIU. 223 The system for the Adelaide Entertainment District was the same except that the signs were B-size, and generally located in pairs, with the SIU being in one sign (the "master" sign) which controlled the other (the "slave" sign). 224 The signs located in trailers were similar to the C-size signs supplied in South Australia. Some of the signs provided were "master" signs having an SIU, while others were "slave" signs controlled by the SIU within the paired "master" (by radio signal). The SIU for these signs communicated with the roads authority using STREAMS and, as with the South Australian signs, they would turn off if they received no signal. Mr Taranto's evidence was that around thirty of these signs were built. 225 Mr Taranto deposed that Hi-Lux had not supplied a lane use sign. In about 2009 or 2010, Hi-Lux made three or four prototype lane use signs with varying displays in order to demonstrate capabilities for the M80 project, but the signs had been subsequently dismantled. In cross-examination, Mr Taranto stated that the only existing documentation regarding lane use signs of which he was aware was a Hi-Lux marketing brochure.

Rodrigo Riquelme 226 Mr Riquelme was, at the time of the hearing, the director of Compusign Systems - a company incorporated since 15 January 2013 and conducting the Compusign business since July 2013. Mr Riquelme had begun working at Compusign Australia in September 2002 as its sales and projects manager and continued to hold this role for Compusign. In this role he had been responsible for marketing Compusign products and managing their delivery for Compusign's projects. He deposed that he first became aware of the Patent in suit on receiving a letter of demand in September 2016. 227 Mr Riquelme deposed that when he began working at Compusign Australia, Mr He told him about the products that Compusign Australia supplied and was developing; and that the previous sales manager, Mr Thurairatnam, had updated him on Compusign products and opportunities. Mr Riquelme said that, as at 2002, Compusign was supplying a range of traffic signs and passenger information signs, including variable message signs, call centre displays, travel time information signs for VicRoads, and LED displays for commercial advertising. 228 Mr Riquelme's evidence was that, on his first day at Compusign Australia, Mr He showed him a prototype variable speed limit sign. On a second occasion, both Mr Thurairatnam and Mr He showed him the prototype variable speed limit sign and explained that it could be used to demonstrate Compusign's general capability to make such signs to customers. Mr He explained that the sign was a prototype only and that modifications would be made in order to suit a customer's particular needs. About the same time, Mr Thurairatnam had told him about the variable speed limit sign that Compusign had quoted to supply for the Western Ring Road Project, and also mentioned that there were opportunities to supply those signs in New South Wales. The prototype had a 24 x 14 matrix display with a circular annulus, capable of displaying different messages including numerals, arrows and words. Mr Riquelme said that he had demonstrated the prototype to a number of customers in late 2002 or early 2003, including to representatives of Alstom and Transurban. He said that he demonstrated the features of the sign using the software interface that Mr He had developed, including showing that either 25% or 50% of the annulus rings could flash. The prototype also had four beacon lights in the corners, since this feature was sought by customers in New South Wales. 229 In September 2002 or a few months thereafter, Mr Riquelme deposed that he travelled with Mr He to Sydney to demonstrate the prototype variable speed limit sign to Downer Engineering for the Cross City Tunnel Project. Compusign won the contract for that project in late 2003 or early 2004. Compusign developed its own external controller capable of separately controlling a group of signs (or a "group controller" as it would come to be known) to control the images displayed on its signs for the project. 230 Mr Riquelme's evidence in cross-examination was that "DCM Specification RVSLS" for the Cross City Tunnel Project dated February 2001 (RRR-2 to his 28 March 2018 affidavit) called for the annulus to flash and did not call for a partly flashing annulus. While accepting at one point that, as a consequence, it was unlikely that he and Mr He would have demonstrated a partly flashing annulus for the Cross City Tunnel Project, he withdrew this evidence shortly afterwards, saying that "[w]hen we went to Sydney, we showed the sign in its full entirety". Mr Riquelme's evidence was that he took photographs of signs at the Sydney display on 23 May 2003, and that they included a 50 km/h sign in a red annulus made up of a number of rings, with four yellow beacons in each corner. He identified these photographs as ZQH-11 to Mr He's 28 March 2018 affidavit. His evidence was that "the software allowed you to control that [sign] any way you wanted to". 231 Mr Riquelme deposed that Compusign Australia supplied its first variable speed limit signs for installation in Victoria about 2004-2005. These were a set of four signs installed on Pascoe Vale Road in Glenroy at either end of the shopping strip. They were supplied to Alstom (now known as United Group) who installed the signs. Once installed and commissioned, these signs flashed the inner annulus rings only when the lower speed limit of 40 km/h was displayed, and did not flash the annulus rings when 60 km/h was displayed. 232 Mr Riquelme's evidence was that, in about 2004 or 2005, Alstom approached Compusign Australia to provide a quotation for the supply of variable speed limit signs only (without a group controller) for the M7 freeway in Sydney. Alstom developed its own group controller for that project. Compusign Australia went on to supply variable speed limit signs (but not group controllers) for the Eastlink, Clem 7, Airport Link and CityLink projects. The controllers for these projects were configured by United Group. 233 Mr Riquelme deposed that the group controller was always external to the signs supplied by Compusign. A single controller would typically control a group of signs to ensure their operation was synchronised. He deposed that the United Group controllers could be configured with a VSLS configuration, an ALUS configuration, or a VMS configuration. In a VSLS configuration, the controller was loaded with frames that corresponded with all of the speed numerals, and with a series of annulus rings. In an ALUS configuration, the controller was loaded with all of the frames for a VSLS configuration and each of the frames specified in appendix B to Australian Standard 5156 (RRR-3 to his 28 March 2018 affidavit) such as arrows, messages and figures indicating the closure of lanes. In a VMS configuration, the controller was loaded with frames that correspond with the different messages that the sign's display screen was to display. 234 Mr Riquelme further deposed that it was the end user who determined what specific instructions to provide to the sign via the group controller. For example, using the VSLS configuration, the group controller could have the sign show speed numerals alone, either flashing or not; the annulus rings alone, or in any combination, flashing; or the speed numerals with any number or none of the annulus rings flashing. Each of these combinations could also be combined with the four flashing beacons in each corner of the sign (if installed). Mr Riquelme's evidence was that Compusign's variable speed limit signs would not operate without a signal from the group controller. His evidence was that the road authorities use a particular protocol (RTA-TSI-SP-003) to communicate with electronic signs. Since this protocol could not be used to control the Compusign signs, another function of the group controller was to convert between the RTA protocol and the Compusign protocol. 235 Mr Riquelme's evidence was that, from December 2010, Compusign had supplied signs for four variable speed limit projects, but had not installed any of these signs. These projects were the Airport Link Motorway in Brisbane, the M80 and Transurban CityLink projects in Victoria, and the Transurban WestConnex project in New South Wales. For the Airport Link project, Compusign Australia supplied its signs to United Group, and United Group configured the controllers. Mr Riquelme's understanding was that the project signs were configured to use flashing beacon lights, and not a flashing annulus. For the M80 project, Compusign Australia and Compusign Systems obtained the group controllers from United Group, and supplied its signs together with the group controllers to another company, Visionstream Australia, which configured the controllers with an ALUS configuration and installed the signs. For the CityLink project, Compusign supplied signs to Transurban together with group controllers obtained from United Group and configured with a VSLS configuration. Transurban in turn contracted AMG Pty Ltd to install the signs, which were then controlled by Transurban using its own control system. Further signs have been supplied by Compusign to Transurban for use on the CityLink Tullamarine widening project, again with the controllers sourced from United Group, configured with an ALUS configuration, and then installed by United Group. These signs were also controlled by Transurban using its own control system. 236 Mr Riquelme deposed that Compusign was also to supply signs for a New South Wales project called WestConnex, for which Compusign would supply its own controllers, which it intended to configure with an ISLUS configuration (a lane use configuration that meets the new RTA protocol, including all the lane use frames from appendix B to Australian Standard 5156 and the lane control symbols in RTA Specification TSI-SP-011 V3.1). These signs were to be installed by a contractor. Mr Riquelme further deposed that, until April 2014, the RTA specification for variable speed limit signs required signs in New South Wales to use flashing beacons. After April 2014, the specification provided for a flashing annulus. His evidence was, however, that as at 14 March 2018 signs in New South Wales continued to use flashing beacons (such as the Compusign signs on the M7 freeway in Sydney) and not flashing annulus rings.

Zhi Qiang He 237 Mr He is the sole shareholder of Compusign Australia and up until 30 June 2017 was the company's sole director. He described himself at the hearing as a manager at Compusign. Mr He graduated in Navy Architecture and Ocean Engineering from Shanghai Jaotong University in 1982 and until 1989 worked in computer-aided design and manufacture of ships. In 1989 he moved to Australia and, after his qualification was recognised in 1991, he worked for Mr Fontaine as an electronics engineer before starting Compusign Australia in 1994. Mr He had been responsible since then for the technical design of all Compusign's products. Mr He's evidence was that Compusign Australia's assets were leased to Compusign Systems from 2013 and then transferred in 2017. Mr He stated that he was not aware of any patent in relation to the display of a variable speed limit sign prior to receiving a letter of demand from Axent in September 2016. 238 Mr He's evidence was that, in around October 2001, Mr Thurairatnam, who worked for Compusign Australia as its sales and marketing manager showed him a copy of a Transfield specification dated 24 October 2001 (a copy of which was annexed to his 28 March 2018 affidavit) for the supply of variable speed limit signs for the Western Ring Road Project, in respect of which Transfield sought his company's quotation. Mr He said that he worked with Mr Thurairatnam to review the technical specifications and to consider what would be required for the supply. Mr He's evidence was that Compusign Australia provided a quotation to Transfield, although he could not locate a copy of the quotation. Mr He also gave evidence that Compusign provided a quotation to Alstom for the supply of variable speed limit signs for the Western Ring Road Project (ZQH-3 to his 28 March 2018 affidavit). 239 Mr He's evidence was that also around October 2001 Mr Thurairatnam (who had since left Compusign and whose whereabouts were unknown to Mr He) suggested that Compusign should develop a prototype electronic variable speed limit sign for demonstration to customers. Mr He gave evidence that he began designing the prototype in late 2001. Mr He deposed: Instead of developing a sign with fixed display options, I worked on developing a variable message sign that could be used to display different speed limits, as well as other messages, by using a matrix of LED's. The sign was a further development from the variable message display signs that I had previously designed for Compusign. 240 A meeting was arranged with VicRoads to discuss Compusign's general capabilities, and Mr Thurairatnam sent a letter to VicRoads dated 7 January 2002, on Compusign's behalf, offering to develop a variable speed limit sign (ZQH-4 to Mr He's 28 March 2018 affidavit). 241 Mr He deposed that, in January 2002, he completed designs for both a matrix circuit board for a variable speed limit sign and a circuit board design for a sign with four annulus rings, requiring four such circuit boards per sign. Mr He's evidence was that the circuit board design contained a feature permitting the different annulus rings to be separately controlled. Mr He deposed to annexing a copy of a drawing of the prototype sign to his 28 March 2018 affidavit (ZQH-10) and a copy of three photographs of the prototype sign (ZQH-11). 242 Mr He's evidence was that Compusign produced a variable speed limit sign with a partly flashing annulus based on his discussions with Mr Thurairatnam, although the proposal for Compusign's development of a variable speed limit system (which was set out in Mr Thurairatnam's 7 January 2002 letter to VicRoads) did not proceed. Mr He's evidence was that Compusign eventually won a contract for the Cross City Tunnel Project in Sydney, for which Compusign produced a prototype capable of displaying various numerals and messages and bearing flashing amber beacons. Mr He accepted that the photographs (ZQH-11) taken by Mr Riquelme most likely in May 2003 showed the amber lights on when the lower speed was showing. 243 It suffices to say at that point that Mr He gave evidence and was cross-examined about the annexures ZQH-3, ZQH-5-ZQH-10; ZQH-12 and ZQH-13, which are discussed below in connection with Axent's objection to their admissibility.

Principles of patent construction 244 In Jupiters Ltd v Neurizon Pty Ltd [2005] FCAFC 90; 222 ALR 155; 65 IPR 86 at [67], a Full Court of this Court summarised the principles for the construction of patents as follows: (i) the proper construction of a specification is a matter of law: Décor Corp Pty Ltd v Dart Industries Inc (1988) 13 IPR 385 at 400; (ii) a patent specification should be given a purposive, not a purely literal, construction: Flexible Steel Lacing Co v Beltreco Ltd (2000) 49 IPR 331; [2000] FCA 890 at [81]; and it is not to be read in the abstract but is to be construed in the light of the common general knowledge and the art before the priority date: Kimberley-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1 at [24]; (iii) the words used in a specification are to be given the meaning which the normal person skilled in the art would attach to them, having regard to his or her own general knowledge and to what is disclosed in the body of the specification: Décor Corp Pty Ltd at 391; (iv) while the claims are to be construed in the context of the specification as a whole, it is not legitimate to narrow or expand the boundaries of monopoly as fixed by the words of a claim by adding to those words glosses drawn from other parts of the specification, although terms in the claim which are unclear may be defined by reference to the body of the specification: Kimberley-Clark v Arico at [15]; Welch Perrin & Co Pty Ltd v Worrel (1961) 106 CLR 588 at 610; Interlego AG v Toltoys Pty Ltd (1973) 130 CLR 461 at 478; the body of a specification cannot be used to change a clear claim for one subject matter into a claim for another and different subject matter: Electric & Musical Industries Ltd v Lissen Ltd [1938] 56 RPC 23 at 39; (v) experts can give evidence on the meaning which those skilled in the art would give to technical or scientific terms and phrases and on unusual or special meanings to be given by skilled addressees to words which might otherwise bear their ordinary meaning: Sartas No 1 Pty Ltd v Koukourou & Partners Pty Ltd (1994) 30 IPR 479 at 485-6; the court is to place itself in the position of some person acquainted with the surrounding circumstances as to the state of the art and manufacture at the time (Kimberley-Clark v Arico at [24]); and (vi) it is for the Court, not for any witness however expert, to construe the specification; Sartas No 1 Pty Ltd at 485-6. 245 It is fundamental that a specification be read as a whole and in light of the common general knowledge in the art before the priority date. It is important to read a patent specification in a practical way, and to use a "generous measure of common sense" in construing the claims of the specification: see Product Management Group Pty Ltd v Blue Gentian LLC [2015] FCAFC 179; 240 FCR 85; 116 IPR 54 at [36]; and GlaxoSmithKline Consumer Healthcare Investments (Ireland) (No 2) Ltd v Generic Partners Pty Ltd [2018] FCAFC 71; 264 FCR 474; 131 IPR 384 at [106].

Regarding the skilled addressee 246 The construction of a patent specification is the responsibility of the Court, since it is a matter of law. To construe a specification, however, the Court must place itself in the position of the skilled addressee in Australia to whom the specification is addressed: see W R Grace & Co v Asahi Kasei Kogyo Kabushiki Kaisha (1993) 25 IPR 481 at 496. The words of the specification are to be given the meaning that the skilled addressee would give them in light of the common general knowledge immediately prior to the priority date, and what is disclosed in the specification itself: see Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd [2001] HCA 8; 207 CLR 1 (Kimberly-Clark v Arico) at [24] and Jupiters at [67]. See also General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1972] RPC 457 at 485: [S]ince documents of this nature are almost certain to contain technical material, the court must, by evidence, be put in the position of a person of the kind to whom the document is addressed, that is to say, a person skilled in the relevant art at the relevant date. If the art is one having a highly developed technology, the notional skilled reader to whom the document is addressed may not be a single person but a team, whose combined skills would normally be employed in that art in interpreting and carrying into effect instructions such as those which are contained in the document to be construed. 247 The "skilled addressee" is essentially a hypothetical construct equivalent to a person "acquainted with the surrounding circumstances as to the state of [the] art and manufacture at the time": Kimberly-Clark v Arico at [24], citing with approval British Dynamite Co v Krebs (1879) 13 RPC 190 at 192. As French CJ said in AstraZeneca AB v Apotex Pty Ltd [2015] HCA 30; 257 CLR 356 (AstraZeneca HCA) at [23], the skilled addressee is not a manifestation of or "avatar" for the expert witness whose testimony is accepted by the court. Rather, the notion of the skilled addressee is a tool of analysis that is given form and content by the testimony of the expert and other evidence. 248 In Root Quality Pty Ltd v Root Control Technologies Pty Ltd [2000] FCA 980; 177 ALR 231; 49 IPR 225 at [71] Finkelstein J said that the skilled addressee is, generally speaking, "the person who works in the art or science with which the invention is connected". In Catnic Components Ltd v Hill & Smith Ltd [1982] RPC 183 at 242, Lord Diplock said that the skilled addressee is "likely to have a practical interest in the subject matter of [the] invention". In Root Quality at [71], Finkelstein J went on to say: A variety of people may have that interest. There are those who might wish to make or construct the invention, those who may wish to compound the invention and those who may wish to use the invention. The skilled addressee seems to me to be a relative expression which does not identify any specific person. Because the patent is directed to a person interested in making, constructing, compounding or using the invention … this hypothetical person … may be required to be skilled in more than one art. … It may be preferable not to search for a composite addressee but a team whose combined skills are to be employed. 249 As we have seen, the Patent relates to a "changing sign system for use as variable speed limit sign on roadways", and a variety of people will have a practical interest in the subject matter of the invention. Axent submitted that the Patent was "addressed to those who work with traffic systems and their associated regulatory and safety issues at a high level - people whose task it is to ensure the safe and efficient movement of people and goods on roadways, and who are alive to issues such as traffic flow, traffic signs and traffic lights". 250 It may be accepted that a person with a practical interest in the subject matter of the invention includes someone with practical knowledge and interest in managing and controlling traffic flows and road safety, who would use the variable speed limit sign in a changing sign system in these activities. It may therefore be accepted that, as Axent submitted, the skilled addressee would include a traffic engineer, such as Mr Prasad (see [104] above) and Mr Jan (see [133]). Indeed, in substance all the parties accepted as much. Furthermore, as the respondents submitted, and I accept, the skilled addressee would also include a person with practical knowledge and skill in the control and operation of electronic variable speed limit signs, with an understanding of their components (such as a control means, input signal, or sensors) and how they work. 251 Different aspects of the construct of a skilled person will be relevant, depending on the nature of the inquiry. This is consistent with the authorities. It is, for example, accepted that different aspects of a skilled person may be relevant for different claims (Alphapharm Pty Ltd v H Lundbeck A/S [2008] FCA 559; 76 IPR 618 at [200]) and for different grounds of invalidity (Otsuka Pharmaceutical Co Ltd v Generic Health Pty Ltd (No 4) [2015] FCA 634; 113 IPR 191 at [127]).

Regarding the claims 252 It is the exclusive right of the patentee to exploit the invention of the patent and to authorise another to exploit that invention: see Patents Act, s 13. Schedule 1 to the Patents Act defines the word "exploit" as follows: exploit, in relation to an invention, includes: (a) where the invention is a product - make, hire, sell, or otherwise dispose of the product, offer to make, sell, hire, or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things; or (b) where the invention is a method or process - use the method or process or do any act mentioned in paragraph (a) in respect of a product resulting from such use. The patentee's monopoly rights are enforceable by an action for infringement: see Patents Act, s 120. 253 With respect to the claims in a patent specification, as Lord Russell explained in Electric and Musical Industries, Ltd v Lissen, Ltd [1938] 4 All ER 221 at 224; (1939) 56 RPC 23 at 39: The function of the claims is to define clearly and with precision the monopoly claimed, so that others may know the exact boundaries of the area within which they will be trespassers. Their primary object is to limit and not to extend the monopoly. What is not claimed is disclaimed. The claims must undoubtedly be read as part of the entire document, and not as a separate document; but the forbidden field must be found in the language of the claims and not elsewhere. See also Otsuka Pharmaceutical Co Ltd v Generic Health Pty Ltd (No 2) [2016] FCAFC 111; 120 IPR 431 (Otsuka FCAFC) at [94] (Besanko and Nicholas JJ). 254 As stated in Product Management Group at [37], in construing a claim, the body of the specification may be used as follows: • The claim should be construed in the context of the specification as a whole even if there is no apparent ambiguity in the claim (Britax Childcare Pty Ltd v Infa-Secure Pty Ltd (2012) 290 ALR 47 at [222] per Middleton J and more generally Welch Perrin and Co Pty Ltd v Worrel (1961) 106 CLR 588 at 616); even the ordinary meaning of words may vary depending on the context, which the specification may provide; • Nevertheless, it is not legitimate to narrow or expand the boundaries of the monopoly as fixed by the words of a claim by adding to these words glosses drawn from other parts of the specification (Jupiters Ltd v Neurizon Pty Ltd (2005) 65 IPR 86 at [67]; Kinabalu Investments Pty Ltd v Barron & Rawson Pty Ltd [2008] FCAFC 178 at [44]); and • More particularly, if a claim is clear and unambiguous, to say that it is to be read in the context of the specification as a whole does not justify it being varied or made obscure by statements found in other parts of the specification. Ordinary words should be given their ordinary meaning unless a person skilled in the art would give them a technical meaning or the specification ascribes a special meaning: Product Management Group at [36]. 255 Having regard to the above, generally speaking, the first question to arise in an action for infringement is whether what the respondent has done falls within the claims of the patent specification. Section 117 provides that if the use of a product by another 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. There is no dispute that Compusign has supplied various allegedly infringing variable speed limit signs for traffic control on roadways. In the case of Compusign Australia, this is admitted to have occurred between 22 April 2004 and July 2013, and in the case of Compusign Systems, from about July 2013. Hi-Lux has also admitted the manufacture and sale of allegedly infringing variable speed limit signs since 7 December 2010. Whether product or method claims 256 A preliminary question arises as to whether the claims of the specification are product claims or method claims. This is important for determining infringement. If the claims are product claims, then the product that each respondent has supplied or offered to supply must be shown to have all the integers of each claim allegedly infringed. If, however, the claims are method claims, then the products as used must be shown to have all the integers of each claim allegedly infringed. In order to decide whether the invention is as to a product or as to a method, it is necessary to examine the substance of the invention. As has been held, if a claim drafted as a product claim is in truth a 'disguised' process claim, it will be treated as such: see D'Arcy v Myriad Genetics Inc [2015] HCA 35; 258 CLR 334 at [145] (Gageler and Nettle JJ). 257 Axent pleaded that the claims were to a product, and maintained in closing that this was the correct characterisation of the claims. Axent submitted that a person skilled in the art would consider the essential features of the invention of the Patent in suit to be: (a) the flashing annulus, with some of the annulus flashing; and (b) the ability to change the speed and the annulus in response to an external sensor (such as wind, light, pre-programmed time or a signal from a control centre). It submitted that claim 1 could be separated into four parts: (1) what the system is used for (a variable speed limit sign); (2) what the component parts of the system are (display panel, numerical displays, annulus and control means); (3) what criteria the system fulfils and its capability (a regulatory speed limit sign that also warns of a change in conditions); and (4) how the system works (by varying its component parts). As will be seen, the respondents did not agree with this approach. 258 Building on this, Axent submitted that if claim 1 is separated into its component integers in accordance with ordinary language, then the claim is for a product. Further, Axent submitted that it was incorrect to say, as the respondents did, that a reference to the sign "always showing a number in a circle on the display panel, when the system is in use" is a reference to how the product is to be used. Rather, so Axent submitted, these words are a reference to the regulatory requirements of a speed limit sign. Axent submitted: Just as [in] Interlego the claim was for blocks that incorporated the coupling method referred to in the claim, here the claim is for signs that incorporate a partly flashing annulus. Applying the principles discussed in Rescare, that part of claim 1 referable to the product's criteria … is a description of the physical characteristics of the sign, just as the reference to the fact that [it] has a display panel is. Axent's Patent claims an article suitable for use as a speed limit sign that has the characteristics set out in the claims i.e. a speed limit sign that shows a partly flashing annulus when a lower than normal speed is displayed … The Patent does not lay claim to all speed limit signs, or to all combined lane use/speed limits signs. It is specifically confined to signs that, when operating as speed limit signs, are capable of showing a partly flashing annulus when a lower than normal speed is displayed. Given the strict constraints as to a regulatory speed limit signage this is a narrow category. Lane use signs that are not capable of operating as speed limits signs with a partly flashing annulus will not infringe, and nor will speed limit signs that are capable of flashing yellow warning lights but not part of the annulus. (Emphasis added) 259 The respondents submitted that the nature of the alleged invention being claimed points away from the patentee intending that the integers of claim 1 (for instance) were to operate as functional limitations, or limitations by result, and favours a conclusion that the claim integers form part of a method of using a variable speed limit sign. The respondents accepted that claim 1 commenced with language that was apt to describe a product, referring to a "changing sign system for use…", and including certain features. They also accepted that the description of those features from lines 2 to 14 of claim 1 was also apt to describe the physical integers of a product. The respondents submitted, however, that the final paragraph of claim 1 gave rise to a constructional difficulty, in particular, in its use of the following language: (a) the sign system fulfils the criteria of being a speed display sign by always showing a number in a circle on the display panel, when the system is in use; and (b) and while simultaneously indicating a change of speed limits when a speed limit different to the normal speed limit is displayed on the a (sic) central numeric displaying area, and therefore a change in conditions, by the varying of part of one or more of the display panel, the central numeric displaying area or the annulus. 260 The respondents contended that the integer set out in (a) above most naturally described how the product is to be used, as opposed to a functional limitation of the product. They further contended that the integer in (b) prescribed what must occur when the sign is being used in a particular way, namely that it is being operated so as to display a "speed limit different to the normal speed limit" (in addition, necessarily, to prescribing what must occur when the sign is being used to display a "normal speed limit"). The respondents contended that the claim language was inapt to describe a functional limitation of the "sign system", and that this language more naturally described a mode of use. The respondents highlighted that this claim integer commenced with the word "and", which, so they said, reinforced that it was a separate requirement. The respondents further submitted that the phrase "normal speed limit" was indicative of a method claim since the concept of "normal speed limit" was specific to a particular location and time of use for a relevant sign. 261 The respondents contended that essentially the same analysis applied to independent claims 17 and 20, and to all claims dependent on claims 1, 17 and 20. They further submitted that the dependent claims were also relevant in assessing whether the independent claims were product or method claims, although they acknowledged that an independent claim could be a product claim while a dependent claim could be a method claim. In this regard, they submitted that a number of the dependent claims (for example, claims 4, 6 and 8 to 10) were ambiguous as to whether they described a method integer, or a functional limitation for a product. There was in their submission, however, no such ambiguity in dependent claims 12, 14 and 16. The respondents submitted that claims 12, 14 and 16 described the operation of the sign system, and were not, as Axent submitted, framed in terms of capabilities. Rather, so the respondents submitted, they described the actual variation of the annulus: (a) in response to an external sensor; (b) in response to an external signal; and (c) according to pre-programmed times. 262 The parties' competing submissions may be resolved by reference to the authorities and the specification of the claims of the Patent in suit. As will be seen, the authorities draw a distinction between a product claim containing a limitation by result (or functionality limitation) and a method (or process) claim. In Blanco White's Patents for Inventions and the Protection of Industrial Designs (5th ed, 1983) (Blanco White) at 4-413, the author stated: To amount to a limitation by result, what is in the claim must at least be a limitation: something that draws a line between two classes of things that would otherwise fall within the claim: with the implication that conditions of the manufacture can be adjusted, by the reader of the specification, to secure the specified result. It is, of course, a matter of construction to determine whether words in the claim effect a limitation or merely assert that complying with the claim will secure a certain result, and this like other questions of construction affecting validity is likely in present-day conditions to be decided in favour of an otherwise meritorious patentee. 263 A claim will be construed as a method or process claim if it employs a method of definition appropriate only to a method or process claim: see Rescare Ltd v Anaesthetic Supplies Pty Ltd (1992) 111 ALR 205; 25 IPR 119 at 126, citing Mullard Radio Valve Co Ltd v British Belmont Radio Ltd (1938) 56 RPC 1, at 10-11. 264 In Mullard, at 10-11, Greene MR gave some guidance about what this may mean in practice: Unlike Claim 1, which is a process claim, the amended Claim 2 is, as was the original Claim 2, an apparatus claim and it must stand or fall as such. In such a claim it is permissible in a proper case to define the physical characteristics of the article by a suitable reference to the results which it is to achieve. It is no objection to such a method of definition in cases where it is appropriate that experiment may be required in order that a worker in the art may know whether an article which he has made does or does not infringe the patent. A permissible reference to results is in truth as much a description of the physical characteristics of the article as a reference to its size or strength or chemical composition would be, and in many cases such a reference is the only practical method of describing the article or some characteristic which it possesses. On the other hand, it is not permissible to import into an apparatus claim a method of definition which is appropriate only to a process claim. Thus an article which is not in itself patentable cannot be made the subject of a good apparatus claim merely by pointing out that, if it is used in a particular way or in a particular collocation, it will produce novel and useful results. This does not, of course, mean that there may not be a patentable piece of apparatus in which such an article forms one element, for the combination of the article with other elements may be novel and useful and may require an exercise of the inventive faculty to produce it. Nor does it mean that there cannot be a good claim for a process in which user of the article in a particular way or in a particular collocation may produce or help to produce a novel and useful results. … I may take an example which is simple and perhaps absurd, but not the less apt, to illustrate my meaning. Let it be supposed that someone has invented an improvement in the game of cricket which involves the placing of a peg between the middle and off stumps. There is nothing novel about the peg, and the stumps in conjunction with which it is to be used are the ordinary stumps. The inventor might (let me suppose) make a valid claim for the use of the stumps in combination with the peg in the manner indicated - such a claim would be a process claim - but he could not make a valid apparatus claim for a set of stumps with the peg. If he tried to make his apparatus claim good by introducing into it the element of novelty in his invention (videlicet, the placing of the peg between the middle and off stumps) and for this purpose referred to one of the stumps as the middle stump, he would be introducing into the definition of his apparatus a differentiation between the stumps depending entirely on user, for all the three stumps as they lie in the box are alike and it is impossible to say of any one of them that it is the middle stump or the off stump; it is only when the stumps come to be used in a particular way that they acquire those characteristics. See also Anaesthetic Supplies Pty Ltd v Rescare Ltd (1994) 50 FCR 1; 122 ALR 141; 28 IPR 383, at 23-24. 265 In the case of a product claim, as indicated in the above passage, a limitation by result is, in effect, no more than a "description of the physical characteristics of the article": see also Atlantis Corp Pty Ltd v Schindler (1997) 39 IPR 29 at 48-49 (Wilcox and Lindgren JJ). Rescare provides an example of claim of this kind, the claim at issue being as follows (at 125): Apparatus comprising: a nose piece including a cavity adapted for insertion of a patient's nose therein and to be releasably sealingly attached to a patient's face in an airtight manner; inlet tubing connecting to said nose piece with an aperture providing fluid communications with said cavity, the inlet tubing being adapted to be connected to an air source; outlet means in fluid communication with and connected to, said inlet tubing proximate the region of said aperture air pressure and providing resistance to airflow therethrough so as to maintain in the region of said aperture air pressure slightly greater than atmospheric while air is passed therethrough throughout the breathing cycle of the patient whereby the patient will have administered to the nasal passages air of slightly increased pressure sufficient to maintain the nasal passages open throughout the breathing cycle. (Emphasis in original) 266 Gummow J held that this was a product claim, with a limitation by result. Regarding the claim, his Honour said, in Rescare at 126: The result is that by means of the apparatus as claimed air of a slightly increased pressure sufficient to maintain the nasal passages open throughout the breathing cycle will be administered to the nasal passages of the patient. Apparatus not providing for this result is not claimed, and the attainment of the result limits the area of the claim. I accept the submission by the applicant that so understood claim 1 is a claim limited by result and is not a "disguised" process claim. In its terms the claim provided a limitation that was part of the construction of the apparatus. 267 In a similar way, in Interlego AG v Toltoys Pty Ltd (1973) 130 CLR 461 Barwick CJ and Mason J rejected the proposition that the following claim was a claim for a method (at 462): A toy building set comprising a plurality of hollow blocks open at one face and adapted to be connected together by means of projection extending from the bottom faces of said blocks, and wherein some of the blocks are provided with at least one projection (primary projection) at the bottom face opposite the open face, and some of the blocks are provided with at least one projection (secondary projection) arranged within the cavity of the block, characterised in that the positions and dimensions of the secondary projections relatively to the positions and dimensions of the primary projections are such that, in a pair of assembled blocks the lateral face of faces of at least one primary projection of one block will be clamped against the lateral face or faces of at least one secondary projection of the adjacent block. 268 Their Honours held that this claim was for a product containing a limitation by result, saying, at, 478-479: We venture to think that no one would conclude, on reading the specification as a whole, that the invention as described makes claim to a method of assembly of blocks which depends on the insertion of primary projections into the recesses of secondary projections in an adjacent block. However, the settled rule is that in ascertaining the width of a particular claim it is not permissible to vary or qualify the plain and unambiguous meaning of the claim by reference to the body of the specification … … Read in isolation or in the light of those parts of the specification which precede it, claim 1, as we understand it, asserts a monopoly in blocks which incorporate the coupling method referred to in the claim and elsewhere described. It is a claim by reference to result in the sense that it indicates how the projections are placed when assembly takes place, and does not explicitly specify other means of clamping, that is, the use of the side and end walls of the blocks, when assembly takes place. The definition of the invention in the claim, which is framed by reference to the result achieved when assembly takes place, lends itself to criticism in that it does not state explicitly the means by which at least one primary projection is to be clamped against at least one secondary projection. … Although the claim does not set out the detailed explanation of the invention contained in the body in the specification, it is to be understood in the light of that explanation. When it is so read, the reader will perceive that, when two blocks are assembled, a single primary projection will be kept in place against a single secondary projection by the wall or walls of the block containing the secondary projection, and that when there is more than one secondary projection the primary projection will be kept in its appointed place by the walls of the other block or by another or other secondary projections. (Emphasis added) 269 Citing Mullard and No-Fume Ltd v Frank Pitchford & Co Ltd (1935) 52 RPC 231, Barwick CJ and Mason J concluded, at 480: The claim asserts a monopoly limited by reference to the result of incorporating in the construction of the hollow blocks the suggested relationship between primary and secondary projections, the result being that at least one primary projection is "clamped against" at least one secondary projection. It is permissible to limit a claim by reference to result … so long as, in the case of an article, the limitation is "sufficient to characterize the construction of the article claimed"… 270 For more recent applications of these principles, see, for example, GlaxoSmithKline Consumer Healthcare Investments (Ireland) (No 2) Ltd v Apotex Pty Ltd [2016] FCA 608; 119 IPR 1 (GlaxoSmithKline (No 2)) at [700]-[706] (Beach J) and Doric Products Pty Ltd v Asia Pacific Trading (Aust) Pty Ltd [2017] FCA 849; 125 IPR 182 at [121] (Burley J). 271 The three independent claims of the specification in Patent in suit were: Claim 1: A changing sign system for use as variable speed limit sign on roadways including: a display panel; a central numeric displaying area formed on the display panel by a plurality of light emitting structures which when activated can display a selected one of at least two possible speed limit displays, each of the at least two possible speed limit displays corresponding to a respective speed limit of at least two possible speed limits, the at least two possible speed limits including a normal speed limit; an annulus formed by a plurality of outer circles on the display panel around the central numeric displaying area by a plurality of light emitting structures; a control means for selecting the selected speed limit display from the at least two possible speed limit displays according to an input criterion and for varying part of one or more of the display panel, the central numeric displaying area or the annulus to display the selected one of the at least two possible speed limit displays; wherein the sign system fulfils the criteria of being a speed display sign by always showing a number in a circle on the display panel, when the system is in use, with the circle being illuminated by the light emitting structures of the annulus, while being able to indicate a selected one of the at least two possible speed limits and while simultaneously indicating a change of speed limits when a speed limit different to the normal speed limit is displayed on the a [sic] central numeric displaying area, and therefore a change in conditions, by the varying of part of one or more of the display panel, the central numeric displaying area or the annulus. Claim 17: A changing sign system for use as variable speed limit sign on roadways including: a display panel; a central numeric displaying area formed on the display panel by a plurality of light emitting structures which when activated can display a selected one of at least two possible speed limit displays, associated with at least two possible speed limits each indicating change of conditions and which when activated can display a normal speed limit display associated [sic] a normal speed limit indicating normal conditions; an annulus formed by a plurality of outer circles on the display panel around the central numeric displaying area by a plurality of light emitting structures; a control means for selecting the selected speed limit display according to an input criterion and for varying part of one or more of the display panel, the central numeric displaying area or the annulus to display, when selected, the selected one of the at least two possible speed limit displays; wherein the sign system fulfils the criteria of being a speed display sign by always showing a number in a circle on the display panel, when the system is in use, with the circle being illuminated by the light emitting structures of the annulus, while being able to indicate a selected one of the at least two possible speed limits, when selected, while simultaneously indicating a change of speed limits from the normal speed limit, and therefore a change in conditions, by the varying of part of one or more of the display panel, the central numeric displaying area or the annulus. Claim 20: A changing sign system for use as variable speed limit sign on roadways including: a display panel; a central numeric displaying area formed on the display panel by a plurality of light emitting structures which when activated can display a selected one of a number of possible speed limit displays; an annulus formed by a plurality of outer circles on the display panel around the central numeric displaying area by a plurality of light emitting structures; a control means for selecting the selected speed limit display according to an input criterion and for varying part of one or more of the display panel, the central numeric displaying area or the annulus; wherein the sign system fulfils the criteria of being a speed display sign by always showing a number in a circle on a display panel while being able to indicate a selected one of at least two possible speed limits and while simultaneously indicating a change of speed limits, and therefore a change in conditions, by the varying of part of one or more of the display panel, the central numeric displaying area or the annulus. 272 For the reasons I am about to set out, I would construe claim 1 as a product claim limited by result. It must be accepted, it seems to me, that claim 1 commences with language indicative of a product claim, and continues to use language that is apposite to a product claim until it reaches the final integer set out above, namely: wherein the sign system fulfils the criteria of being a speed display sign by always showing a number in a circle on a display panel, when the system is in use, with the circle being illuminated by the light emitting structures of the annulus, while being able to indicate a selected one of the at least two possible speed limits and while simultaneously indicating a change of speed limits when a speed limit different to the normal speed limit is displayed on the a [sic] central numeric displaying area, and therefore a change in conditions, by the varying of part of one or more of the display panel, the central numeric displaying area or the annulus. 273 Reading this passage in the context of the entire claim, it seems to me that this passage is intended to be read as a whole and that it sets forth a number of functional limitations or limitations by result. These limitations are that, when the sign system is in use, the properties of the sign are such that the sign: (1) can be observed always to show a number in an illuminated circle on the display panel; (2) while also being able to show one of at least two possible speeds; and (3) while (also) at the same time being able to indicate a reduced speed limit (and therefore a change in roadway conditions) by varying part of the display panel, the numeric displaying area or the annulus. 274 In other words, I would not separate the integers in the final passage, as the respondents would do: see [260] above. I do not understand that "and" effects a separation of the kind for which the respondents contend. That construction leads, as the respondents observed, to difficulties of construction. Rather, I would understand the word "and" to be connecting a coordinate limitation. The first and second functional limitations (as identified in at [273] above) are to be read with the third functional limitation (as also identified at [273] above). This understanding is, so it seems to me, further indicated by the consecutive use of the words "while" and "and while", indicating that all three functional limitations apply at the same time, namely, while the sign system is in use. Although the expression "normal speed limit" could, for the reasons the respondents advanced, be regarded in some contexts as indicative of a method claim since the concept of "normal speed limit" might be read as specific to a particular location and time of use, this is not how that concept is to be understood in claim 1 of the specification of the Patent in suit. In this context, it seems to me that the expression "normal speed limit" is used in a normative sense so as to mean "conforming to the usual standard on the roadway" wherever located. 275 These limitations by result draw a line between things (electronic variable speed limit signs) that would otherwise fall within the claim and those that do not, with the implication that conditions of their manufacture can be adjusted by the reader of the specification, to secure the specified result. This is in substance a "description of the physical characteristics" of the claimed product. 276 It would also follow from this that I reject Axent's submission that claim 1 looks to capabilities. Axent's construction appears to me to be overly broad, and not supported by the specification including the language of the claims of the specification. My preferred approach, it seems to me, aligns with a purposive common-sense approach to construction. If Axent's construction were correct, then claim 1 could be infringed by a product that was not, and was never intended to be, used as a speed limit sign. Further, as the respondents submitted, the claim could be infringed by a product intended to be used as an electronic speed limit sign, but not intended to have a partly flashing annulus for lower speeds. This might be a wide class, bearing in mind that Mr Fontaine's evidence was that Axent's prototype sign was capable of speedy modification in order to demonstrate the partly flashing annulus: see [48] above. I accept that, as the respondents submitted, Axent's construction would mean that claim 1 could encompass an electronic traffic sign, the operation of which was unrelated to the invention of the Patent in suit, providing it had a fully controllable matrix display. 277 In closing written submissions, Axent relied on Bitech Engineering v Garth Living Pty Ltd [2010] FCAFC 75; 86 IPR 468 at [26] and Seafood Innovations Pty Ltd v Richard Bass Pty Ltd [2011] FCAFC 83; 92 IPR 1 in support of the proposition that, in determining a question of infringement, the question is whether the alleged infringing products contain all the essential integers of the claims, not whether the claims contain all of the integers of the alleged infringement. There is no dispute about this proposition. In closing oral submissions, however, counsel for Axent submitted that the respondents' argument was in substance that infringement could be avoided if an extra feature were grafted on to the sign or the system so that it reproduced the invention but also operated in some other way, such as, for example, as a lane use sign. Counsel submitted that this was the very approach that the Full Court of this Court in Bitech held was erroneous. I reject this submission. The issue in this case is whether the allegedly infringing products have the functional limitations (or limitations by result) that are essential integers of the claims of the Patent in suit. As counsel for the respondent said, referring to claim 1, the integer, "wherein the sign system fulfils the criteria of being a speed display system by always showing a number in a circle on the display panel, when the system is in use" is "not framed in terms of capability" but "in terms of how the sign will operate". As he said, claims 1 and 17 can, in this regard, be contrasted with claim 20, which does not contain this functional limitation and instead requires that "the sign system fulfils the criteria of being a speed display system by always showing a number in a circle on the display panel" all the time. 278 I would reject Axent's submission, so far as it was made, that the alternative constructions were not "put to" Mr Prasad. As noted earlier, issues of construction are ultimately for the Court to determine. 279 So far as determining whether the independent claims are product or method claims, I accept that, as the respondent submitted, there was no good reason to distinguish between claims 1, 17 and 20. Further, save for claims 12, 14 and 16 it seems to me that the other claims, including claims 4, 6 and 8 to 10, should also be regarded as product claims, containing functional limitations or limitations by result. Claims 12, 14 and 16 use "a method of definition appropriate only to a [method or] process claim": see Rescare at 126. That is, they describe the actual variation of the annulus in response to an external sensor (claim 12), in response to an external signal (claim 14); and according to pre-programmed times (claim 16). These claims are not, as Axent submitted, framed in terms of capabilities. Rather, these claims in substance describe the operation of the claimed sign system and are, therefore, method or process claims. 280 If am wrong and the respondents' submission that all the claims are method claims is correct, then the following lengthy discussion on infringement is unnecessary since none of the respondents have been shown to have performed the method.

Regarding clarity of claims 281 Section 40(3) of the Patents Act requires that the claims of a patent be clear and succinct. It is an objection to the validity of a patent that "the scope of any claim of the complete specification is not sufficiently and clearly defined": see Blanco White at 4-701, p. 143. The need for clarity arises because, as Dixon CJ said in Martin v Scribal Pty Ltd [1954] HCA 48; 92 CLR 17 at 59, "the principles governing the definition of a monopoly operating over the public at large require a description which is not reasonably capable of misunderstanding". 282 A court may refer to the body of the specification not only to identify the background of the claims and the meaning of technical terms, but also to resolve ambiguities in or other doubts about the claims' construction: Austal Ships Sales Pty Ltd v Stena Rederi Aktiebolag [2008] FCAFC 121; 77 IPR 229 at [13], citing Flexible Steel Lacing Co v Beltreco Ltd [2000] FCA 890; 49 IPR 331 at [71]-[78]; Nesbit Evans Group Australia Pty Ltd v Impro Ltd (1997) 39 IPR 56 at 94-95. A claim is not invalid merely because it might have been better drafted nor because it is difficult to construe, "provided it can be properly and fairly construed": Britax Childcare Pty Ltd v Infa-Secure Pty Ltd (No 4) [2015] FCA 651; 113 IPR 280 at [583] (emphasis in original); see also Flexible Steel at [80]-[81], quoting Blanco White at 4-701, and cited with approval by the Full Court in Austal Ships at [14]. 283 In Martin v Scribal at 97, Taylor J observed: The claims also must be construed without an eye on the alleged infringer's acts. … On the other hand, it is right to construe a claim with an eye benevolent to the inventor and with a view to making the invention work - this is an application of the old doctrine ut res magis valeat quam pereat … ; and, where the language of a claim is obscure or doubtful, the doubt may sometimes be resolved by referring to words in the body of the document to explain it. This is known as the dictionary principle. … This remains a correct approach: see Otsuka FCAFC at [95] (Besanko and Nicholas JJ). 284 In Minnesota Mining and Manufacturing Co v Beiersdorf (Australia) Ltd [1980] HCA 9; 144 CLR 253 at 274, Aickin J said that the principle with respect to clarity is that "[l]ack of precise definition in claims is not fatal to their validity so long as they provide a workable standard suitable to the intended use": see also Monsanto Co v Commissioner of Patents (1974) 48 ALJR 59 at 60-61 (Stephen J); and more recently Freeman v TJ and FL Pohlner Pty Ltd (1994) 30 IPR 377 at 381-382; Nesbit Evans at 94-95; Austal Ships at [14], quoting Flexible Steel at [81]. 285 Whether a degree of imprecision is fatal to the validity of a claim depends on whether the claim provides a workable standard for those skilled in the art in the circumstances of the intended use. In Nesbit Evans at 95, Lindgren J, with whom Hill J agreed, said that: … it is not unusual for a claim to define an invention partly by the use of a relative expression which necessitates exercise of judgment … and so long as the claims provide a workable standard suitable to the intended use, they will be valid … . The expressions in question must be understood in a practical, common sense manner. In Flexible Steel at [81], Hely J said that: It is permissible for an invention to be described in a way which involves matters of degree. Lack of precise definition in claims is not fatal to their validity, so long as they provide a workable standard suitable to the intended use. The consideration is whether, on any reasonable view, the claim has meaning. In determining this, the expressions in question must be understood in a practical, commonsense manner. Absurd constructions should be avoided and mere technicalities should not defeat the grant of protection. (Citations omitted.) 286 Where there is no workable standard, imprecision in a claim spells invalidity for lack of clarity, as Albany Molecular Research Inc v Alphapharm Pty Ltd [2011] FCA 120; 90 IPR 457 illustrates. In that case, Jessup J held at [174]-[175] that the expression "substantially pure" when used in the claims in the patent in suit failed to satisfy s 40(3) of the Patents Act, because it left "the definition of the boundaries of the invention uncertain or variable". (The lack of clarity in that case was cured by a subsequent amendment to the specification, which indicated that the claim to substantial purity was limited to compounds of at least 98% purity: Albany Molecular at [182], [186].)

"normal speed limit" or "normal speed" 287 The respondents/cross-claimants (collectively, the respondents) contended that claims 1, 17 and 23 and their dependent claims lacked clarity because of the use in these claims of the expression "the normal speed limit" in claims 1 and 17 and, semble, "normal speed" in claim 23. (The respondents did not differentiate between claims 1 and 17, and claim 23 at this point of their submissions.) These three claims and their dependent claims were, so they said, invalid. The respondents' contention was, in effect, that the expression "the normal speed limit" (and it appears, "normal speed") had no fixed meaning, noting that it was not defined in the specification of the Patent. They argued that the meaning of this expression depended on the particular location at which the sign was installed, and that it could also be referrable to the time of day or night and could change over time. 288 Axent contended that the respondents' submissions "proceed[ed] on the false assumption that every product which is the subject of a patent must be able to be determined as infringing … from a simple inspection, and must contain a fixed set of features". Axent submitted that the concept of a "normal speed limit" was clear in its context, and referred to Mr Prasad's evidence. 289 The specification itself speaks of the use of variable speed limit signs, for example on roadways and bridges, where there may be switching from "a normal maximum safe speed" to "a hazard lower maximum speed" (or "the lower maximum speed limit") "when a certain wind speed is detected or the sun happens to be at the most distracting level". It emphasises that "the driver [should be] aware of the lower determined speed limit" and also aware that it is due to a hazard. More particularly, the specification states that the object of the invention is "to provide an improved variable speed limit sign, which fulfils the requirement of showing a lower maximum speed limit but also advising of the hazard" while also being a regulatory speed limit sign. Having regard to the specification, and its account of the nature and object of the invention, as well as the text and structure of the relevant claims, it seems to me that the meaning of "normal speed limit" provides a workable standard to those skilled in the art in the circumstances of its intended use, and does not lack the requisite clarity. This is confirmed by the fact that neither Mr Jan nor Mr Prasad professed to have any difficulty in understanding what was intended by the expression. 290 As already stated, I accept that Mr Prasad and Mr Jan were in a category of people that can be regarded as a skilled addressee for some purposes, where their practical knowledge and interest as traffic engineers in managing and controlling traffic flows and road safety are relevant. As traffic engineers, their knowledge and interest covered traffic control measures, including speed signs and warnings as to speed changes, which was relevant to an understanding of the expression "normal speed limit". Mr Prasad, in particular, explained that he understood the expression "normal speed limit" to mean "the temporary reduction on speed limit along a section of road". It seems to me that when claims 1, 17 and 23 are read as a whole, in a practical, common sense way and having regard to the specification of the Patent, the skilled addressee would have no real doubt about what is intended by the expression "normal speed limit", even though it may be regarded as a somewhat relative concept. It does not seem to me that there is any lack of clarity in this expression such as to lead to invalidity in these claims and their dependent claims.

"input criterion" 291 The respondents also contended that claims 1, 17 and 20 and their dependent claims were invalid for lack of clarity because of their use of the expression "input criterion" in the phrase "control means for selecting the selected speed limit display … according to an input criterion". 292 The respondents relied on the Oxford English Dictionary's definition of the word "criterion", which was, relevantly, said to mean a "principle" or a "standard" by which something is be judged or estimated: see Oxford English Dictionary (online version). They contended that, as a general proposition, an "input criterion" included "as a limitation that there is an input (for example wind speed) by reference to which the controller can make a decision as to which speed limit to select for display". The respondents submitted, however, that while it may be clear that certain inputs would constitute an "input criterion" (for example, a signal specifying wind speed, light intensity or light angle) the scope of what did or did not amount to an "input criterion" was unclear. 293 Axent contended that this expression was not unclear because Mr Prasad identified the input criterion as a signal to which the sign responds. 294 As already indicated, the specification provided a context in which the expression "input criterion" was to be understood. As we have seen, the specification described how variable speed limit signs might be used on roadways and bridges "where there is a likelihood of a change in road condition, such as high wind or sun glare". Subsequently, the specification explained that the "criterion to which the control means responds can be an external sensor such as wind sensor, light sensor or the like". The specification continued: In another form there can be a programmed time and speed limits such as usable at time-defined hazards such as schools or sunset. In a further embodiment, the criterion could be receipt of an external signal from a control centre such a freeway control centre or the like. The response is then made according to the input criteria and selects one of at least two possible speed limits and varies part of one or more of the display panel, the central numeric displaying area or the annulus. 295 Notwithstanding the difficulties with Mr Prasad's evidence (including his adoption of a "capabilities" construction with respect to the claims of the specification), it is relevant that neither he nor Mr Jan had any difficulty in understanding what was meant by an "input criterion" in the phrase "according to an input criterion". As already stated, they were persons within the class of skilled addressees. It is fair to say that both men understood the expression in the same way, to mean a signal of a specific kind to which a part of the sign is programmed to respond, where the programme is responsive to a signal relating to wind speed, light intensity, time, date or some other criterion, which in the context of the specification, must be a criterion relating to a need to reduce the normal speed limit to a lower maximum speed in the interests of traffic flow and safety. It seems to me that when claims 1, 17 and 20 and the specification are read as a whole, in a practical way, the skilled addressee would have no real doubt about what is meant by the expression "input criterion" in these claims and their dependent claims, even though the expression may have a degree of imprecision. There is not such a lack of clarity in the expression as to lead to invalidity.

"change in conditions" 296 The respondents also submitted that there was a similar lack of clarity in the use of the words "and therefore a change in conditions" in each of claims 1, 17 and 20. The respondents maintained that the requirement that the words were intended to add was unclear, and therefore the scope of the claim was unclear with the result that each of these claims (and their dependent claims) lacked clarity. 297 Axent contended that this expression was not unclear, referring to Mr Prasad's statement in his report of 28 February 2018 that the expression "change in conditions" refers to a change in the speed limit from the normal speed limit. 298 As already noted, the specification refers to various situations in which a change in the speed limit could be desirable, including relating to wind strength, sun glare, and school zones. Furthermore, the specification also emphasises that the signs must not merely alert a driver to the fact of a lower speed limit, but also to the fact that there is a "hazard", or something that is "different to normal". It states, for example, that: Sometimes the expected hazard might have variable effect such as variable wind speed or variable amounts of material spilled onto the road surface. It is therefore imperative that the driver is not only aware of the lower determined speed limit but also aware that this is a lower limit due to a hazard so that the driver also drives with extra caution in case of the lower determined speed limit not being sufficiently low. (Emphasis added) 299 The expression "change in conditions" in claims 1, 17 and 20 falls to be read in this context. In claim 1 (as in the other two claims), the expression appears in functional limitation (or limitation by result) as follows: and while simultaneously indicating a change of speed limits when a speed limit different to the normal speed limit is displayed on the a [sic] central numeric displaying area, and therefore a change in conditions, by the varying of part of one or more of the display panel, the central numeric displaying area or the annulus. 300 Having regard to the specification, and the text and structure of the claim, this functional limitation requires the indication of "a change of speed limits …and therefore a change in conditions". Here, as Mr Prasad said, "a change in conditions" refers to a change in the speed limit from the normal speed limit. I interpolate here that this is because the change of speed corresponds to a change in conditions: that is, the claim requires that a change in speed limits is brought about by a programmed response in part of the sign to a signal referable to an input criterion such as wind speed, light intensity or some other criterion relating to a need to reduce the normal speed limit to a lower maximum speed. When claims 1, 17 and 20 (and their dependent claims) are read as a whole in the context of the specification, the skilled addressee would discern that the expression "a change in conditions" is part of a workable standard in functional limitation. Even though this functional limitation might have been better drafted, it can be fairly construed, and the expression "a change in conditions" does not introduce such a lack of clarity as to lead to invalidity.

Infringement analysis 301 The Patent in suit is infringed if, on a proper construction of a claim of the Patent, the allegedly infringing product possesses all the essential integers of that claim, without the patentee's authorisation: see recently Davies v Lazer Safe Pty Ltd [2018] FCA 702; 132 IPR 202 at [240] (appeal dismissed: Davies v Lazer Safe Pty Ltd [2019] FCAFC 65), see also Rodi & Wienenberger AG v Henry Showell Ltd [1969] RPC 367 at 391 (Lord Upjohn); Olin Corporation v Super Cartridge Co Pty Ltd (1977) 180 CLR 236 at 246 (Gibbs J); ); Fresenius Medical Care Australia Pty Limited v Gambro Pty Limited [2005] FCAFC 220; 67 IPR 230; 224 ALR 168 at [49] (Wilcox, Branson and Bennett JJ). The inclusion of additional integers will not necessarily avoid infringement: see Fresenius Medical Care at [70]; Bitech at [30]. 302 In order to establish that the respondents have infringed the claims of the Patent in suit, Axent is required to prove that the respondents' impugned signs have each of the integers of each of the relevant claims including the functional limitations required by those integers. It also means, as explained above, that Axent must establish that the product, when used, has the features described in the claim. 303 In order to establish its infringement claim with respect to claim 1, Axent needed to establish, by reference to the properties of each impugned sign, that when the sign is in use, it (1) can be observed always to show a number in an illuminated circle on the display panel; (2) while also being able to show one of at least two possible speeds; and (3) while (also) at the same time indicating a speed limit different to the normal speed limit (i.e., a reduced speed limit), and therefore a change in conditions (i.e., on the roadway), by varying part of the display panel, the numeric displaying area or the annulus. As the respondents submitted, in relation to this third feature, Axent must establish that this functional limitation is necessarily satisfied whenever the sign is used such that each of the relevant "possible speed limits" is selected by the control means according to the relevant "input criterion", and each involves a relevant variation from the alternative speed limit display. 304 The text and structure of claim 17 resembles the text and structure of claim 1, and, generally speaking, the same infringement issues arise with respect to it as claim 1. Claim 20 is also textually and structurally similar to claim 1, save that with respect to the third of the functional limitations in claim 20 the variation of part of one or more of the display panel, the central numeric displaying area or the annulus is not by reference to "the normal speed limit", but by reference to "at least two possible speed limits". 305 Claim 28 is "[a] changing sign system, substantially as hereinbefore described, with reference to the examples". Claim 28 is an omnibus claim. The general principles to be applied in construing an omnibus claim were set out by Middleton J in Britax Childcare Pty Ltd v Infa-Secure Pty Ltd (No 3) [2012] FCA 1019 at [27]-[33]. His Honour said at [28]-[33]: As is the case with regular patent claims, the scope of omnibus claims will largely be determined by the precise language used therein, "the context of the specification in which the clause appears", and "the nature of the descriptions or drawings" to which that clause refers: see Memcor Australia Pty Ltd (ACN 003 581 566) v GE Betzdearborn Canada Company (2009) 81 IPR 315 at 323; [2009] FCA 507; citing Lewis v Hall (2005) 68 IPR 89; [2005] FCAFC 251 with approval; Deere & Co v Harrison McGregor & Guest Ltd [1965] 82 RPC 461 at 465. Without more and in the absence of evidence to the contrary, references in an omnibus claim to claims as "substantially as described herein" are typically construed as being more or less limited to the preferred embodiment described in the specification: see Townsend Controls Pty Ltd v Gilead (1989) 16 IPR 469 at 489; Rescare Ltd v Anaesthetic Supplies Pty Ltd (1992) 111 ALR 205 at 241. … "Substantially" in this context simply means 'in substance': see Deere & Co 82 RPC 461 at 463; Townsend Controls 16 IPR 469 at 489. … The test for validity of omnibus claims is the same as that which applies more generally: see PhotoCure ASA v Queen's University at Kingston; DUSA Pharmaceuticals Inc v PhotoCure ASA (2005) 216 ALR 41 at 76. A claim must be sufficiently clear to indicate to the notional skilled addressee, to whom the specification is addressed, the limits of what it purports to claim: see PhotoCure ASA 216 ALR 41 at 76. Accordingly, if the specification describes more than one 'preferred embodiment' (or if the claim specifically refers to a number of potentially conflicting parts of the specification), there may be ambiguity about what an omnibus claim actually refers to: see Townsend Controls 16 IPR 469 at 489. In such a case, the claim may fail for being insufficiently specific to define the scope of the monopoly claimed: see PhotoCure ASA 216 ALR 41 at 75, citing a number of cases on point. … If an omnibus claim also refers to specific drawings or examples, this will typically be construed to narrow the scope of such claims, substantially confining them to the particular embodiments shown in those drawings or examples, subject to those variations that the skilled addressee would regard as minor: see Emperor Sports Pty Ltd v Commissioner of Patents (2005) 146 FCR 159 at 181 citing PhotoCure ASA 216 ALR 41 and Raleigh Cycle Co 65 RPC 141 with approval; General Steel Industries Inc v State of New South Wales (1967) 40 ALJR 464 at 467; Deere & Co 82 RPC 461 at 477-478. … The way in which such examples or drawings are referred to in an omnibus claim can also affect its scope. For example, a claim concluding with the words "with reference to the examples" was construed in one case as collectively defining the invention according to the variations illustrated in those examples, rather than notionally splitting the claim into a number of distinct claims to reflect the number of examples referred to: see Daikin Kogyo Co Ltd (Shingu's) Application [1974] 91 RPC 559 at 579, 581… 306 There are a number of potential difficulties with claim 28. The specification refers to more than one embodiment. There may therefore be "some ambiguity" about the embodiment to which it refers. More obviously, although claim 28 is in terms narrowed "with reference to the examples", there are no "examples" in the Patent. Axent contended, and the respondents denied, that the drawings in Figure 1 and Figure 2 were the "examples" to which claim 28 referred and that the claim should be understood to refer to them. 307 It is evident that the drawings in Figure 1 and Figure 2 were intended to assist in the description of a particular embodiment of the invention. Thus, the specification states (at p 4) that: In order that [t]he invention can be more readily understood an embodiment will be described by way of illustration only with reference to the drawings wherein: Figure 1 is a diagrammatic view of a changing sign system in accordance with an embodiment of the invention in one state of display; and Figure 2 is a diagrammatic view of a changing sign system in accordance with the embodiment of Figure 1 in a second state of display. (Emphasis added) 308 The two Figures are referenced in the subsequent explanation of a particular embodiment of the invention put forward "by way of illustration" (p 5). As stated, the drawings that constitute the two Figures are essentially the same but for the fact that they have different "state[s] of display", with Figure 1 showing the numeral 50 and Figure 2, the numeral 80. (See above at [25]). 309 Where the language of the specification can be read to afford the patentee protection, the Court will endeavour to give effect to the construction that will not defeat the rights of patentees for "mere technicalities": see Tye-Sil Corp Ltd v Diversified Products Corp (1991) 35 CPR (3d) 350; 20 IPR 574 at 585 (Décary JA); also Elconnex Pty Limited v Gerard Industries Pty Limited (1991) 32 FCR 491 at 514 (Burchett J); Flexible Steel at [81] (Hely J). There are, however, limits to how far a proposition of this kind can assist a patentee. 310 For example, in GlaxoSmithKline (No 2) at [382], Beach J rejected the contention that the patentee had mistakenly referred to a "basket" rather than a "cylinder" and that the mistake should be overlooked. His Honour did so in large part because to overlook the mistake would be to "adopt a method of construction that gives [the] patentee what it might have wished or intended to claim rather than what it did claim", and in so doing, to impermissibly change the boundary limits of the monopoly as claimed (at [388], [397]). In dismissing the appeal from his Honour's judgment, after referring to ss 102, 104 and 115 of the Patents Act, Middleton, Nicholas and Burley JJ said in Generic Partners at [121]: We think these provisions of the Act are a powerful indication that a mistake in a claim cannot be ignored simply because the skilled addressee understands that a mistake has been made which he or she corrects by reading the language of the claim as if those words did not appear in it. The principles of construction must provide some basis which would permit the court to ignore the words of the claim. The mere fact that the skilled addressee would understand that they had been included by mistake is not sufficient. 311 It may be that claim 28 was intended to be confined to the particular embodiment that was described by reference to the drawings. In Emperor Sports Pty Ltd v Commissioner of Patents [2005] FCA 996; 146 FCR 159, for example, the referenced "Example" was to an embodiment: see Emperor Sports at [112] and [114]. In that case, however, the "Example" was expressly identified as such: [114]. The difficulty here is that the specification does not identify the two drawings described as Figure 1 and Figure 2 as "examples". Indeed, the specification tends to indicate that the drawings are not the intended "examples" to which the claim refers. Rather, the specification indicates that, if there is a relevant embodiment for the purpose of claim 28, it is the embodiment contained in the description at p 5, which Figure 1 and Figure 2 illustrate only in part. Whether this is in fact the embodiment, "substantially as hereinbefore described" as claim 28 provides, is far from clear, however, bearing in mind that the specification of the Patent refers to more than one embodiment: compare Britax at [31]. 312 Further, to reach this end involves ignoring the mistaken reference to "examples" in claim 28 and construing the claim so as to refer to "drawings", rather than examples. Figure 1 and Figure 2 are not examples of an embodiment of the invention. They are drawings designed to assist in describing a particular embodiment "by way of illustration of" the invention. There is no principle of construction that I can discern that would provide some basis to permit the court to ignore the words "by reference to the examples" in the claim. This would be to alter the content of the monopoly as actually claimed in claim 28, which as Generic Partners illustrates, is not permissible. Nor it seems to me can I discern such a basis upon which to substitute "by reference to the drawings" for the words "by reference to the examples".

Hi-Lux's signs 313 Axent's case was in substance that the supply by Hi-Lux of the Hi-Lux variable speed limit signs infringed or would infringe all the claims of the Patent. 314 Hi-Lux supplied four relevant categories of variable speed limit signs from 2 December 2010, this date marking the agreed end of the limitation period. These signs were: (1) school zone/shopping strip signs; (2) South Australian signs; (3) trailer signs; and (4) lane use signs. Hi-Lux signs contained a DCC, which controlled the operation of the LED matrices. The DCC was configured with maps that corresponded to different visual displays. Some Hi-Lux signs had an SIU, directing the DCC as to the pre-programmed maps to access, and when they were to be accessed, in order to display the corresponding LED matrices.

School zone/shopping strip signs 315 Each school zone/shopping strip sign had an in-built SIU directing the DCC as to how to control the LED matrices. The SIU interfaced with the road authority's NMS. The SIU had to be configured by the customer to display a particular sign by the customer uploading a calendar into the SIU. The calendar could only be uploaded to the sign by using the NMS. In consequence, the school zone/shopping strip sign would not display a speed limit of any kind unless the operator had connected the sign to the NMS. The operator of the sign was able to control the sign so that it showed zero to four flashing annulus rings when the lower speed limit was displayed. 316 The school zone/shopping strip sign also had a manual switch that could be used to change the speed limit on display. In that case, however, the change was not in response to an "input criterion", bearing in mind that Axent's submission in closing was that the only input criterion relied on was the signal from an NMS.

South Australian signs 317 There were two versions of the South Australian signs. One version of the sign had an in-built SIU (a master sign). A second version was controlled by an external SIU, which was either located in another sign or in a nearby roadside cabinet (a slave sign). 318 Like the school zone/shopping strip signs, the South Australian signs would not display anything if simply connected to a power source. The associated SIU needed to receive a command from the road authority's control centre, telling it what to display. Only then would the SIU send a corresponding command to the sign's DCC.

Trailer signs 319 The trailer signs operated in relevantly the same way as the South Australian signs, and were supplied in both master and slave versions (that is, with and without an in-built SIU). The trailer signs also needed to receive instructions from the roads authority's control centre in order to display a speed limit.

Lane use signs 320 Hi-Lux had not in fact supplied a lane use sign to anyone, although it had made several prototypes. The precise operation and configuration of these signs would depend on a particular customer's requirements. 321 In order to determine whether the supply of the Hi-Lux signs would infringe the claims of the Patent in suit, it is necessary therefore to consider whether these signs possess the integers of the relevant claims. This is discussed below.

Claims 1, 17 and 20: "control means for selecting the selected speed limit display from the at least two possible speed limit displays according to an input criterion" 322 Each of independent claims 1, 17 and 20 requires "a control means for selecting the selected speed limit display from the at least two possible speed limit displays according to an input criterion". There is little said about the "the control means" in the specification. Apart from the consistory clause, the specification explains (see [24] above) that the relevant criterion to which the controller responds includes a signal from an external sensor (such as a wind or light sensor). The specification also explains that: In another form there can be a programmed time and speed limits such as usable at time-defined hazards such as schools or sunset. Alternatively, the relevant criterion can include a signal from a control centre. 323 Having regard to the specification and the whole of claim 1, it is apparent that the expression "control means" refers to something that undertakes the selection of the speed limit the sign will display. The same conclusion is reached when each of claims 17 and 20 is separately considered. 324 The evidence of Mr Taranto clearly established that the DCC in each sign did not undertake any process of selecting a speed limit for display. The process of selection was made either by the SIU or at the road operator's control centre. Where there was an SIU, the DCC responded to the commands it received from the SIU. Its responses to the SIU's commands caused it to direct the relevant LED matrices to illuminate. Mr Taranto was clear that the DCC had no role in the selection of the speed limit that the sign would display. That is, the DCC did not in any sense "select" as between two speed limits. 325 In its submissions on infringement, Axent contended that Hi-Lux was precluded from contesting the presence of a "control means" in the relevant products because Hi-Lux had made relevant admissions. In [18(e)] of its Defence filed on 14 February 2017, Hi-Lux admitted that its "VSL Signs" had the features set out in Annexure A. Annexure A included "[a] control means that is capable of selecting between at least two possible speed limits to display in the central numeric displaying area". In its subsequent position statement on infringement filed on 17 July 2017, however, Hi-Lux said rather more: 20 While Hi-Lux admits that each of its VSLS signs has a control means that is capable of selecting between at least two possible speed limits to display, it does not accept that the integer in row 1.4 on page 6 of Axent's position statement is taken by any of its VSLS signs (or its Lane Use sign): (a) the control means is capable of implementing the selection of more than one possible speed limits to display, as follows: (i) for the first category of sign the control means is capable of being programmed to operate according to a schedule, as well as being capable of receiving a signal from an external controller; (ii) for the second and third categories of sign (and for the Lane Use sign) the control means requires a signal from an external controller (or 'control means') to direct it to display the required speed; (b) the control means that is present in the Hi-Lux VSLS and Lane Use signs is therefore not necessarily a 'control means' as required by each of claims 1, 17 and 20: (i) it does not operate by reference to an 'input criterion' as required by those claims; and (ii) in the case of the second and third categories of sign (and the Lane Use sign), no 'control' as such is provided by the sign itself - that is, no selection of a different speed occurs without an external control signal being received by that sign. 21 That is, for the avoidance of any doubt, Hi-Lux does not admit that any of its VSLS signs, or Lane Use sign, has a 'control means' as that term is used in claims 1, 17 and 20. (Footnote omitted; underlining original) 326 In its position statement on infringement some 10 months before the hearing, Hi-Lux made its position very clear. It explained that the control means in the Hi-Lux signs was only capable of implementing the selection of a speed limit made by the SIU. There can be no doubt that Axent was on notice of the case Hi-Lux sought to put well before the hearing. In any event, a fact asserted in a pleading is not an admission of that fact: see Laws v Australian Broadcasting Tribunal (1990) HCA 31; 170 CLR 70 at 85-86 (Mason CJ and Brennan J), 98 (Gaudron and McHugh JJ). It is doubtful that the statement in Annexure A was an admission of the relevant kind and, in any event, that statement did not constitute an admission to an element of the relevant part of claim 1. I reject Axent's submission that Hi-Lux was precluded from contesting the presence of a relevant "control means". 327 Axent relied on the evidence of Mr Prasad to the effect that the relevant Hi-Lux products had the features of a display panel, a central numeric displaying area, an annulus and a control means for selecting the selected speed limit display according to an input criterion that claim 1 called for. It does not seem to me that his evidence is useful in this respect. 328 Mr Prasad was a traffic engineer. It can be accepted therefore that he had a practical knowledge and interest in managing and controlling road safety and traffic flow. He was not an electrical engineer. Further, in cross-examination, he readily admitted that he had no specialised training in electronics or electrical engineering; that he had never worked for or provided consulting services to an electrical sign manufacturer; that he had never specified the requirements for a group controller; and save possibly for attendance at a recent conference, he had never actually seen inside an electronic speed sign. This means, so it seems to me, that Mr Prasad was unable to draw upon the kind of specialised knowledge relevant to an understanding of these integers of claims 1, 17 and 20. Insofar as Mr Prasad expressed his opinion about "a control means for selecting the selected speed limit display … according to an input criterion", his evidence was inadmissible, alternatively I would accord it little weight. At best, as the respondents said, in this context it amounted to no more than a submission. 329 Mr Prasad's evidence was, moreover, that many of his conclusions were based on his opinion about the capability of a sign, rather than on whether a necessary feature of the sign was the same as a relevant claim integer. For the reasons already stated, I have rejected Axent's "capability" construction of the claims and, in particular, I reject Axent's submission that the words "control means" in the expression "control means for selecting between at least two possible speed limits" should be construed as meaning "a control means suitable for" (i.e. capable of) making the requisite selection. Some further difficulties regarding Mr Prasad's evidence are discussed below: see [349]. 330 In order to establish that the DCC is the relevant "control means", Axent relied on Mr Taranto's agreement, in cross-examination, with the general proposition that "[t]he DCC runs the operations of the displays for the ESLS CMS" in a Hi-Lux Technical Maintenance Manual. This reliance was misplaced. Mr Taranto's evidence about the different roles of the DCC and SIU was not challenged in cross-examination, and the level of generality of the statement on which Axent sought to rely was not inconsistent with this explanation, as the Manual itself indicates. Furthermore, this very general statement about the DCC in the Manual does not address the requirement in claim 1, that the control means "select[s] the selected speed limit display from the at least two possible speed limit displays according to an input criterion". 331 It was not claimed in Axent's pleadings, position statement on infringement, or opening that a separately supplied SIU may be the relevant controller. The respondents had no opportunity to meet such a claim at the hearing. It was therefore not open to Axent to so contend in closing submissions. In any case, as set out below, Axent has not established that the SIU as supplied was configured such that the functional limitations in claim 1 were met: see [359]. 332 Axent has not established that the Hi-Lux signs possess "a control means for selecting the selected speed limit display from the at least two possible speed limit displays according to the input criterion" as described in claims 1, 17 and 20 and their dependent claims.

Claims 1, 17 and 20: "always showing a number in a circle on the display panel"; "always showing a number in a circle on a display panel" 333 As already noted, claims 1 and 17 include a qualification on a functional limitation that "the sign system fulfils the criteria of being a speed display sign by always showing a number in a circle on the display panel, when the system is in use". There is no "when the system is in use" qualification in claim 20. In this claim, the sign system "fulfils the criteria of being a speed display sign by always showing a number in a circle on a display panel". As will be seen, this difference can be put aside for the moment. 334 The evidence of Mr Taranto established that the properties of Hi-Lux's school zone/shopping strip signs are not such that they will always show a number in a circle when the system is in use. His evidence was that these signs would show a blank display if no calendar was uploaded, or if the uploaded calendar had expired, and that in these signs, moreover, all of the annulus rings can be flashed for the lower speed (so that the circle is not continuously maintained). 335 Further, this integer is not a feature of either the South Australian signs or the trailer signs. Mr Taranto's evidence established that, using STREAMS, the operator of the signs was required to set the required sequence number to the SIU in order to have the signs show a speed on their displays. Indeed, even when connected to a power source, the signs will show a blank display unless and until they receive (and continue to receive) directions from the operator's command centre. 336 The lane use sign will not "always show[] a number in a circle", first, because no design decision had been made as to how the sign will operate since none had been supplied; and, in any event, the lane use sign is capable of showing other displays, including those in Appendix B of Australian Standard 5156, which includes symbols other than a "number in a circle". 337 Axent has not established that the Hi-Lux signs will "always show[] a number in a circle on the display panel" in conformity with the functional limitation (or limitation by result) contained in claims 1, 17 and 20 and their dependent claims.

Claims 1, 17 and 20: "simultaneously indicating a change of speed limits when a speed limit different to the normal speed limit is displayed" (claim 1); "simultaneously indicating a change of speed limits from the normal speed limit" (claim 17); "simultaneously indicating a change of speed limits" (claim 20) 338 Claim 1 included within the functional limitations "and while simultaneously indicating a change of speed limits when a speed limit different to the normal speed limit is displayed". Similarly, claim 17 included "while simultaneously indicating a change of speed limits from the normal speed limit" and claim 20 included "while simultaneously indicating a change of speed limits". 339 As already stated, Mr Taranto's evidence regarding the school zone/shopping strip signs established that in order for the signs to display a particular display, the operator needed to configure the SIU. The actual operation of the signs depended on the selections made by the road authority. The operator could use the NMS manually to override the display from the control centre. The operator could, moreover, control the sign to alter the number of annulus rings that were flashed for the lower speed limits, from none, to all, or any of the four rings. With respect to the South Australian and trailer signs, the road authority's command centre would need to select the maps and sequences that corresponded to the display of an entire annulus for a "normal speed limit" and alternating maps for lower speed limits that resulted in a partly flashing annulus. 340 The fact these signs were capable of achieving these results if the operator made the appropriate selections does not establish that, when the sign system is in use, the features of the sign were necessarily such as to fulfil these functional limitations or achieve such results in, respectively, claims 1, 17 and 20 and each of their dependent claims.

Claim 12 and claim 13: external sensors 341 Claim 12 was for "[a] changing sign system according to any one of claims 1 to 11, in which the control means varies part the [sic] annulus in response to an external sensor". Claim 13 was for "[a] changing sign system according to claim 12, in which the external sensor is a wind sensor or a light sensor". 342 Mr Taranto's evidence established that whilst Hi-Lux's school zone/shopping strip signs, the South Australian signs and the trailer signs had in-built light sensors, these sensors were used to measure ambient light. No light sensor was used as an input for determining what speed to display, as contemplated in claims 12 and 13. 343 Axent has not established that any of the Hi-Lux signs had an "external sensor" such as that described in claims 12 and 13.

Claims 5, 7, and 24 to 26: sign dimensions 344 Claim 5 was for "[a] changing sign system according to claim 4 wherein the display panel is of the approximate dimensions of 1100mm × 1100mm with approximately a 900mm diameter annulus and approximately 320mm sized numbers being adapted to be shown on the central numeric displaying area". Claim 7 was for "[a] changing sign system according to claim 6 wherein the display panel is of the approximate dimensions of 750mm × 750mm with approximately a 600mm diameter annulus and approximately 240mm sized numbers being adapted to be shown on the central numeric displaying area". Claims 24 to 26 inclusive were also for changing sign system signs having a particular dimension. 345 As already noted, Mr Jan deposed that the sign dimensions specified for sizes A, B and C in AS1742-1999 were similar to those specified in claims 5, 7, 24, 25 and 26 for the size of the Patent, with some limited variation. In cross-examination, Mr Jan agreed that the box or outside dimensions of the sign were different from the specifications in AS1742-1999. In Annexure A to its defence Hi-Lux set out what it said were the dimensions of its signs, which corresponded with the dimensions referenced in AS1743-2001. In a report annexed to his 28 February 2018 affidavit, Mr Prasad compared the claim dimensions with Hi-Lux signs, showing that the Hi-Lux signs differed with respect to claims 5 and 26. It was unclear from the information that he provided whether the Hi-Lux signs had the same dimensions as claims 7 and 25, because there was no information regarding the diameter of the annulus and the size of the numbers for the Hi-Lux signs. There were no dimensions provided to enable a comparison between claim 24 and the Hi-Lux signs. In a report annexed to his 12 April 2018 affidavit, with respect to claims 24 to 26, Mr Prasad showed in addition that Hi-Lux's A, B and C Type Approved signs were based on R4-1 in AS1742. In cross-examination, Mr Prasad conceded that AS1742 allows for a "variance of sizes from what is outlined in the standard,", although there must be a "reasonable likeness". 346 It may be accepted that the burden of proving infringement, insofar as this was a product claim, was on Axent: compare Jadwan Pty Ltd v Rae & Partners (A Firm) [2020] FCAFC 62; 378 ALR 193 at [444]. The evidence before the Court fails to persuade me that on the balance of probabilities the Hi-Lux signs contain the dimensions described in any of claims 5, 7, 24, 25 and 26.

Claim 28 347 Claim 28 is discussed at [305] and following above. Since there are no examples, there can be no infringement. Alternatively, claim 28 is invalid for lack of clarity. Even if Axent's construction of claim 28 were accepted, the claim should be taken to include the principal integers of claims 1, 17 and 20 considered above (even though the inclusion of the word "substantially" indicates that the claim "should not be read too literally": see Blanco White at [2-112]). 348 Accordingly, Axent has not established that any of the Hi-Lux signs possess the integers of claim 28. 349 Before considering Compusign's signs, it is convenient to make some further observations about Mr Prasad's evidence. The respondents submitted that Mr Prasad did not adequately identify the materials on which he based his conclusions and the reasons for his conclusions. Mr Prasad sought to overcome this deficiency during the hearing by his 25 April 2018 affidavit, which included an updated table (SP-13) in which he purported to set out the documents, observations and matters that he relied on for the opinions expressed in the table. It does not seem to me, however, that this table sufficiently overcame this deficiency. Furthermore, in cross-examination, Mr Prasad stated that he reached some of his conclusions as to the presence of certain integers in the respondents' products on the basis of assumptions and inferences based on his expectation that the signs would be likely to have such a capability. This was not, so it seems to me, a correct way to proceed. Mr Prasad's evidence was, moreover, that many of his conclusions were based on his opinion about the capability of a sign, rather than on whether a necessary feature of the sign was the same as a relevant claim integer. For the reasons already stated, I have rejected Axent's "capability" construction of the claims and, in consequence, I would reject Mr Prasad's conclusions in so far as they were based on his opinion about capability. I have taken these considerations into account where appropriate in considering the weight that should be accorded Mr Prasad's evidence where he has given admissible evidence on infringement issues.

Compusign's signs 350 From 2 December 2010, Compusign had supplied (but not installed) variable speed limit signs for four projects, and had offered to supply signs of this kind for a fifth project. As already noted, after July 2013, Compusign Systems operated the business and, it may be inferred, had supplied the relevant signs. 351 The evidence of Mr Riquelme established that the relevant Compusign signs have a matrix display for displaying the speed numerals and lane use symbols. His evidence further established that these signs have an external controller, which is called a group controller, controlling a group of signs. A group controller can be loaded with different "configurations". In a VSLS configuration, the group controller is loaded with frames that correspond with all the speed numerals, and with a series of annulus rings. The group controller is flexible in what it can make the signs display, so that even if loaded with a VSLS configuration, the group controller may make the signs display the speed numeral alone, with no annulus rings, and the speed numeral can be flashed. Alternatively, in a VSLS configuration, the group controller can be directed to make the sign display the annulus rings alone or any number of them, with any of the rings flashing; or the speed numerals with any number of annulus rings in any position flashing, including none at all. If the group controller is configured with an ALUS or ISLUS configuration, the group controller is not only loaded with the frames for a VSLS configuration but also with each of the lane use (LU) frames that are set out in Appendix B to Australian Standard 5156. In addition, the ISLUS configuration, so Mr Riquelme said, includes the lane control symbols outlined in RTA Specification TSI-SP-011 V3.1. 352 The group controllers used in the four projects for which Compusign had already supplied signs were developed by United Group, not Compusign. In the case of the Brisbane airport link project, Compusign supplied the signs to United Group, and United Group configured the controllers. For the subsequent three projects (the M80 project, the CityLink project, and the CityLink Tullamarine widening project) Compusign obtained the group controllers from United Group and supplied its signs and the controllers to another company, namely Visionstream or Transurban. In the case of the M80 project, Visionstream configured the signs with an ALUS configuration and installed them. In the case of the CityLink project and the CityLink Tullamarine widening project, Compusign Systems sourced the group controllers from United Group, which, for the CityLink project, were configured with a VSLS configuration and, for the CityLink Tullamarine widening project, were configured with an ALUS configuration. In the case of the CityLink project, the signs were installed by AMG Pty Ltd and, in the case of the CityLink Tullamarine widening project, the signs were installed by United Group. The signs for both these projects were controlled by Transurban using its own control system. 353 In the case of the Westconnex project in New South Wales, Compusign undertook to supply its own controllers, configured with an ISLUS configuration. Another company was to install the signs. The road operator would control the sign, deciding what it would display. 354 In order to determine whether the supply of the Compusign signs would infringe the claims of the Patent in suit, it is necessary to consider whether these signs possess the integers of the claims. This is discussed below.

Claims 1, 17 and 20: "control means for selecting the selected speed limit display from the at least two possible speed limit displays according to an input criterion" 355 The respondents submitted that none of the Compusign signs has a "control means for selecting the selected speed limit display from the at least two possible speed limit displays" as required by claims 1, 17 and 20 and their dependent claims. I accept this submission. 356 Mr He's evidence in cross-examination was that each pixel on Compusign's signs was individually controllable. The range of displays on a sign depended on direction from the signals from the group controller, and this depended on how the group controller had been configured (that is, whether it had a VSLS, ALUS, ISLUS or VMS configuration). If the group controller had been configured with the relevant frames corresponding with lane use symbols, it would send a signal to the sign to display lane use symbols, not speed numerals and annulus rings. 357 For the reasons already stated, I have rejected Axent's contention that there is an infringement merely because a sign is capable of operating as a speed limit sign, and of displaying a partly flashing annulus. 358 Axent also contended that the fact that there was a group controller did not mean that there was not an internal controller in the sign, being a "control means". I reject this contention. Mr Riquelme's evidence made it clear that the group controller did not make the selection between different possible speed limit displays. Rather, this selection was made by the road operator's control centre, which sent a relevant command to the group controller. 359 In its position statement on infringement, Compusign disclosed that there was an "internal processor" within each sign that "interprets the control signals received from the external controller controlled by the [road operator's control centre]" but there was no evidence led at the hearing that such an internal processor "select[s] the selected speed limit display from the at least two possible speed limit displays according to an input criterion". Mr Fontaine's high-level evidence that every variable speed limit sign had a local controller, which controlled its operation, did not address this issue. Importantly, Mr Riquelme's evidence concerning the operation of the group controller was not relevantly challenged. 360 Axent also contended that, if the relevant control means was the group controller (which as indicated above, I have rejected), then there was an infringement because the Patent did not specify where the control means was to be located, and the physical location of the components did not affect how the sign itself operated. The difficulty with this contention is that the alleged infringement was the supply of the allegedly infringing sign made by one or other of the respondents. The evidence established, however, that the group controller was a separate item, which up until the close of the hearing had been not been supplied by Compusign. As counsel for the respondents submitted at one point, there was no allegation in this case "about supply of separate components. It's around the supply of the sign." 361 For these reasons I conclude that Axent has not established that the Compusign signs possess "a control means for selecting the selected speed limit display from the at least two possible speed limit displays according to an input criterion" as described in claims 1, 17 and 20 and their dependent claims.

Claims 1, 17 and 20: "always showing a number in a circle on the display panel"; "always showing a number in a circle on a display panel" 362 Compusign submitted that none of its signs had the property of "always showing a number in a circle on the display panel" when the system was in use. I accept this submission. As indicated above, Axent's case was that Compusign's signs were capable of being operated to make this display. For the reasons already stated, I do not consider that this is the correct approach. 363 Mr Riquelme's evidence established that, even though connected to a power supply (and therefore "in use") the Compusign variable speed limit signs would not always display "a number in a circle on the display panel". The road operator determined what instructions should be given to the sign via the group controller, which in this respect was entirely flexible. If a group controller were configured with a VSLS configuration, then the group controller could be directed to make the sign display speed numerals alone, without there being any circle (or annulus). If, on the other hand, a group controller were configured with an ALUS or ISLUS configuration, then the sign would have a lane use configuration and could display symbols other than a number in a circle. 364 Axent has not established that the Compusign signs will "always show[] a number in a circle on the display panel" in conformity with the functional limitation (or limitation by result) contained in claims 1, 17 and 20 and their dependent claims.

Claims 1, 17 and 20: "simultaneously indicating a change of speed limits when a speed limit different to the normal speed limit is displayed" (claim 1); "simultaneously indicating a change of speed limits from the normal speed limit" (claim 17); "simultaneously indicating a change of speed limits" (claim 20) 365 As noted above, claim 1 included within the functional limitations "and while simultaneously indicating a change of speed limits when a speed limit different to the normal speed limit is displayed". Similarly, claim 17 included "while simultaneously indicating a change of speed limits from the normal speed limit" and claim 20 included "while simultaneously indicating a change of speed limits". 366 As also noted above, Mr Riquelme's evidence was that the end user had complete flexibility in the control of Compusign's signs. Via the group controller, the road operator could ensure that these signs showed speed numerals alone, with no annulus, and could flash the numerals. The road operator could show some or all of the annulus rings alone, with some or none flashing. The road operator could also show the speed numerals with any number of annulus rings, none, some (in any position) or all flashing. 367 The fact that Compusign's signs were capable of achieving these results if the operator made the appropriate selections does not establish that, when the sign system is in use, the features of the sign were necessarily such as to fulfil these functional limitations or achieve such results in, respectively, claims 1, 17 and 20 and each of their dependent claims.

Claim 12 and claim 13: external sensors 368 As already noted, claim 12 was for "[a] changing sign system according to any one of claims 1 to 11, in which the control means varies part the [sic] annulus in response to an external sensor". Claim 13 was for "[a] changing sign system according to claim 12, in which the external sensor is a wind sensor or a light sensor". 369 Referencing a Compusign document, "Variable Speed Limit Sign (VSLS) to RTA TSI-SP-011-DCM VI: Product Technical Specification" dated 16 June 2013 (Compusign's PTS), Compusign accepted that its signs included a light sensor. It submitted that the role of this light sensor was to control the overall brightness of the display. This is indeed consistent with this Compusign document. There is no evidence that its light sensor had any other role such as that set out in these claims. There was also no evidence that the Compusign signs had any other external sensor. 370 Axent has not established that any of the Comupsign signs had an "external sensor" such as that described in claims 12 and 13.

Claims 5, 7, and 24 to 26: sign dimensions 371 I have already referred (at [344] above) to the dimensions set down in claims 5, 7 and 24 to 26. Mr Jan's evidence about these dimensions (referred to at [345]) is also relevant here. 372 As in the case of the Hi-Lux signs (see [345] above), Compusign submitted that the Compusign signs varied from the dimensions set down in claims 5, 7 and 24 to 26 and that their signs corresponded with the dimensions referenced in AS1743-2001. As with the Hi-Lux signs (see [345]), Mr Prasad, in a report annexed to his 28 February 2018 affidavit, compared the dimensions specified in these claims with the signs supplied by Compusign. Thus, he compared the dimensions of Compusign's VSLS and advanced lane use signs with the dimensions set down in claims 5 and 7, and found that each of the Compusign signs differed in dimensions from the dimensions in these claims. He also found that the dimensions of Compusign's signs differed when compared with the dimensions set down in claims 24, 25 and 26. 373 The fact that Compusign's signs had different dimensions to those set down in claims 5, 7 and 24 to 26 is supported by Compusign's own documents and materials, which were in evidence. In Annexure 3 to Compusign's Position Statement on Infringement, Compusign set out the material relating to the dimensions of its signs that pointed to these differences. This was confirmed by Compusign's PTS, and two of Compusign's Product Information Documents both dated 1 May 2009 regarding lane use signs: namely (1) the "Clip In/Clip Out Version"; and (2) the "Airport Link Version". These latter documents, which were in evidence, were relied on by Compusign in closing written submissions, to demonstrate the dimensions of its signs. 374 In any event, as already stated at [346], the burden of proof of infringement lies with Axent. For the reasons set out above, the evidence fails to persuade me that on the balance of probabilities Compusign's signs infringed any of claims 5, 7, 24, 25 and 26 of the Patent.

Claim 28 375 I would reiterate here with respect to the Compusign signs what is said with respect to claim 28 and the Hi-Lux signs (see [347] above).

Conclusion 376 For the foregoing reasons, Axent has not made out its case of direct infringement by the respondents. In so far as claims 12, 14 and 16 are method claims, then, since Axent has not established the respondents very likely performed the relevant method in making their signs, the respondents have not infringed these claims.

Axent's section 117 case 377 Axent relied on s 117, which provides: (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 word "supply" is defined in Sch 1 to the Patents Act to include: (a) supply by way of sale, exchange, lease, hire or hire-purchase; and (b) offer to supply, (including supply by way of sale, exchange, lease, hire or hire-purchase). 378 In construing s 117, reference has sometimes been made to the 1984 report of the Industrial Property Advisory Committee, which, in recommending the introduction of contributory infringement provisions targeted at suppliers, was instrumental in the enactment of s 117. The report suggested that contributory infringement should cover supply which had the potential to infringe product and process patents. An example provided in the report of the type of supply which ought to be infringing - "the importer of a kit of parts which is designed to be assembled into an infringing article" (at 67) - reflects the findings in a number of the cases that have found s 117 infringement with respect to product patents: see, e.g., Product Management Group at [128] per Kenny and Beach JJ; Beadcrete Pty Ltd v Fei Yu (t/as Jewels 4 Pools) (No 3) [2013] FCA 187; 100 IPR 188 at [126]-[128] per Jagot J. 379 The respondents submitted, however, that Axent's case for infringement by reason of s 117 was confined to the supply of the signs themselves, with the result that the alleged infringing conduct was the same as for its case of direct infringement. The respondents submitted that, in this circumstance, no issue arose under s 117. For the reasons set out below, I accept that this was indeed the case that Axent advanced up until 4:30pm on 30 April 2018. I accept that, as the respondents submitted in effect, this meant that Axent's case for infringement was in substance the same as its case of direct infringement. 380 Whilst it may not be entirely correct to say, as the respondents do, that Axent's s 117 case as pleaded was always focussed on supply, it would seem correct to say that to the extent that Axent's original pleading went beyond alleging the supply of an infringing product (by contemplating that the Patent might be for a method) it was subsequently amended so as effectively to be restricted to the supply of such a product: compare [10]-[15]; [20]-[25] of Axent's statement of claim and [10]-[15]; [20]-[25] of Axent's amended statement of claim. Prior to the hearing Axent did not give any particulars of its s 117 claim that might have indicated a different approach. Whilst Axent included a reference in [19(c)] of its amended position statement on infringement to "detailed written instructions (manuals) as to how to operate and maintain that system" as constituting a type of infringing conduct, this document did not otherwise identify or formulate a s 117 case beyond that set out in Axent's pleadings. 381 As indicated, Axent's case in opening submissions and orally was that the Patent was for a product. In Axent's opening written submissions, Axent's s 117 claim was a simple one that depended on this assumption, as paragraphs [23], [67] and [71] below make clear. Axent submitted: 21. Supply of the alleged infringing products is admitted, but the use of a patented product is a further separate category of direct infringement. And where such use is ongoing it is a continuing infringement - each time the product is used there is an act of infringement. 22. Further, where the act of another party procures that continued usage by that other party then both will infringe. The procuring party will be liable for contributory infringement at common law and as a joint tortfeasor, who has a common design with the end user, having made themselves a party to the user's infringement. … 23. Finally, the initial supply itself involves a further indirect infringement under section 117 of the Act. … 67. As set out above, the initial admitted supply is also an infringement under section 117. 68. All respondents also admit to engaging in repair services for relevant signage. The Compusign respondents (but not Hi-Lux) have provided a table of the repair and maintenance services that they have undertaken and continue to undertake. It is likely that similar arrangements operate with Hi-Lux, although this is not clear from their discovery or their position statement, which fails to identify any relevant repair or maintenance contracts or supplies. 69. This is important, particularly in terms of damages, as the value of the repairs aspects of the arrangements (and hence the loss and damages suffered by Axent as a result of infringing supplies) may substantially exceed the value of the initial supply. 70. In addition, the parties agree that damages can only be claimed for infringing conduct that occurred after 2 December 2010. Given the nature of the contractual arrangements, contracts signed prior to 2 December 2010 in respect of which ongoing maintenance obligations pertain after that date, as well as separate maintenance arrangements post 2 December 2010, are important. 71. The performance of these ongoing maintenance obligations is not said by Axent to be a direct infringement. But it is nevertheless infringing conduct by the respondents. This is because:- a. use by an end user of an infringing sign is itself an act of infringement; and b. maintenance of such a sign by a respondent permits that continued use. 72. Similarly, any supplies of signage are both direct infringements and indirect infringements under section 117 [of] the Act, with the use by the end user being the relevant direct infringement. In that regard the respondents have maintenance and operations manuals that they are obliged to supply to end users. 73. In the case of ongoing maintenance and repairs, section 117 is not applicable, as the section confines itself to supplies. However, acts of maintenance and repair still amounts to:- a. authorisation of that end user's conduct; b. directing, procuring and inducing end users to (continue) to infringe; and c. an act of joint tortfeasorship, with the user and the maintenance contractor engaged in a common design to infringe. (Footnotes omitted.) Ms Gatford did not make any reference to s 117 in her opening at the commencement of the hearing on 23 April 2018. 382 It must therefore be accepted that, when the hearing commenced on 23 April 2018, Axent had opened its case in relation to s 117 on the sole basis that the supply of a sign is, in and of itself, a supply that attracts the operation of s 117. The reference to s 117 of the Patents Act in [5] of the agreed statement of issues on infringement must be understood to refer only to that limited issue. Although Axent's amended position statement on infringement, in [19(c)], referred to "detailed written instructions (manuals) as to how to operate and maintain that system" as constituting infringing conduct, it did not otherwise identify a broader s 117 case. Up until 30 April 2018, Axent did not, it seems to me, clearly identify and formulate a broader case of infringement based on s 117. 383 On Friday, 27 April 2018, shortly before 4:30pm, in the course of Mr Sozio's cross-examination by Ms Gatford (counsel for Axent), Mr Smith (the respondents' counsel) took a relevance objection to a question sought to be asked by Ms Gatford. Mr Smith contended that, in her proposed question to Mr Sozio, Ms Gatford sought to travel beyond her case regarding s 117. Mr Smith affirmed: Just so my friend is on notice, I would submit that my learned friend has also not opened a case based on infringement of the claims on the basis of them being construed as method claims. It has only been opened - in fact, it was pleaded as being product claims only, and it was only opened on that basis. And no 117 case was - in my submission, no 117 case was opened and, certainly, no 117 case was opened on the basis of the claims being construed as method claims. 384 Ms Gatford responded: I opened this case as a product case. I agree, your Honour. But the position - but the written opening and the agreed statement of issues has always had as an alternative if your Honour adopts my learned friend's … contention [regarding] construction of the patent, that there is a 117 infringement case … 385 As it was by then nearly 4:30pm, further argument on the matter was stood over until the following Monday, 30 April 2018. By that time, Axent had filed a note as to infringement on the s 117 issue. This note focussed on a case management conference held on 17 April 2018, at which Ms Gatford had submitted in substance that if the respondents were to contend that the Patent was for a method, rather than as Axent said for a product, this would raise additional issues with respect to s 117. At the case management conference, Ms Gatford stated that Axent's case had been prepared on the basis that: This was a product patent, that this is for a speed sign which is a product which does things and not that it was a method and all of the difficulties that section 117 might entail in terms of provision of a manual at the time, who is performing the method. 386 The upshot was that, in its note as to infringement on the s 117 issue, Axent sought leave "to elicit from the respondents' witnesses in cross-examination evidence as to the directions given and steps taken by the respondents when supplying their signage so as to ensure that such evidence is before the Court should the Court determine that the patent discloses a method, not a product" (emphasis added). In order to expedite the hearing, I determined to permit Ms Gatford to proceed with her cross-examination subject to Mr Smith maintaining his objection. I indicated that I would rule on the question finally in giving judgment. 387 It should be noted, however, that on 30 April 2018, after drawing attention to relevant deficiencies in Axent's particularisation of its s 117 case, Mr Smith submitted: And the final submission, your Honour, my learned friend says it's a matter in reply. We disagree with that. It's [for] Axent to advance the positive infringement case that it wants to bring in this court. It's not a matter of reply at all. It either asserts that it's a product - there are product or method claims or it could have advanced a case in the alternative. All of those options were open to it. It only chose to pursue and support a case on the basis that they were product claims. This submission must be accepted. It is clearly correct. This submission was in substance repeated in the respondents' closing submissions on admissibility. It must also be accepted that, as the respondents submitted in those submissions, Axent had never identified "any of the limbs of section 117(2) as forming any basis of its case for infringement, and nor has it ever particularised a basis for the operation of any of those limbs". 388 The respondents further submitted that had Axent foreshadowed such a case, the respondents could have considered the evidence they might have led in response. They submitted, in substance, that it would be unfair to them to permit Axent to seek to make out an infringement case based on s 117 that it had not opened or properly foreshadowed to the respondents. Whilst Axent adopted the language of s 117(2)(b) of the Patents Act in [11]-[12] and [21]-[22] of its amended statement of claim, these references were referable to supply, as indicated above. Further, while there was a reference in [21] of its amended positon statement on infringement to s 117, a footnoted reference here returned the reader to Axent's amended statement of claim. One may, it seems to me, fairly conclude that Axent did not seek to articulate its newly formulated s 117 claim until its closing submissions on infringement, as for example, when it made its submission at this point on "reason to believe" in s 117(2)(b). It does not seem to me that the respondents were on notice when the hearing commenced of the case Axent sought to make in closing. 389 Axent submitted, however, that if the objection were allowed, "without the evidence being admitted there is a risk that if the Court finds the Patent is for a method it will at the same time find that Axent has failed to provide sufficient evidence to prove on the balance of probabilities that the respondents instructed others to whom they supply their signage how to perform that method". 390 The respondents accepted that, as indeed Axent submitted, it was possible that some of the evidence subject to Mr Smith's s 117 objections may have been relevant to other aspects of Axent's case. The respondents proposed that as a matter of expedience the Court should make a ruling pursuant to s 136 of the Evidence Act that the evidence given by the respondents' witnesses by way of cross-examination be limited in its use in that it should not form the basis of an infringement case alleged by reference to s 117. This would, so it seems to me, avoid the difficulty to which the parties referred. 391 I accept that, as the respondents submitted, in the circumstances outlined above, Axent should be held to the case on which it opened. It was for Axent to determine what it regarded as the correct construction of its Patent, including whether there were alternative constructions properly open to it, and to decide whether it should advance these alternative constructions in its infringement proceedings. Having determined these matters, it was not open to it to change course in the middle of the hearing, thereby depriving the respondents of a fair opportunity to meet the new case made against them. I would therefore rule that pursuant to s 136 of the Evidence Act the evidence given by the respondents' witnesses by way of cross-examination be limited in its use in that it shall not form the basis of an infringement case alleged by reference to s 117 of the Patents Act. 392 I accept that, as the respondents submitted, Axent's case for infringement by reason of s 117 as opened and presented until 4:30 pm on 27 April 2018 was confined to the supply of the signs themselves, with the result that the alleged infringing conduct was the same as for its case of direct infringement. There is no need for me to consider here the larger question as to the proper field of operation of s 117 of the Patents Act, although I observe that it is unlikely that a primary infringer of a product patent could be, by the same act, also liable for contributory infringement under s 117. 393 For the foregoing reasons, Axent has not made out its case of indirect infringement against the respondents. 394 I would add at this point, lest it be thought the issue had been overlooked, that at no stage did Axent contend that the respondents were liable as suppliers because they supplied the component parts that were assembled by another to constitute the allegedly infringing signs. This was not Axent's case. The analysis contained in cases such as Product Management Group at [128] and Beadcrete at [126]-[128] is therefore inapplicable.

Authorisation and joint tortfeasorship 395 In this case, Axent's submissions regarding authorisation and joint tortfeasorship depend on a finding of infringement. In the absence of such a finding, these issues do not arise: see Sandvik Intellectual Property AB v Quarry Mining & Construction Equipment Pty Ltd [2016] FCA 236 at [271]; Apotex Pty Ltd v Les Laboratoires Servier (No 2) [2012] FCA 748 at [27].

Defences 396 In case I am wrong in concluding that Axent has not made out its case of infringement, I consider below the respondents' defences to Axent's infringement claim.

Issues on which there was no continuing dispute 397 The parties ultimately agreed that Axent's claims regarding the respondents' allegedly infringing conduct prior to 2 December 2010 were statute-barred pursuant to s 120(4) of the Patents Act. The parties also agreed that amendments to the Patent did not disentitle Axent to claim damages or an account of profits: see agreed statement of issues on infringement, [7]-[8].

Crown use defence - Hi-Lux 398 All respondents originally relied on s 163(1)(b) of the Patents Act in their pleadings and in their position statements on infringement. In the agreed statement of issues on infringement however, only Hi-Lux relied on this defence. The relevant agreed issue was identified as follows: Whether the supplies made by Hi-Lux to VicRoads, the Department of Planning, Transport and Infrastructure of South Australia and Geelong City Council referred to in paragraphs 21-23 inclusive in the affidavit of Salvatore Sozio sworn 28 March 2018 amount to an exploitation by the Commonwealth or a State (or a person authorised by the Commonwealth or a State) for the services of the Commonwealth or a State under section 163 of Patents Act. 399 The respondents' closing written submissions focussed only on Hi-Lux's supply of variable speed limit signs to the State. It will be recalled that in his third affidavit Mr Sozio referenced supplies to VicRoads, the South Australian Department of Planning, Transport and Infrastructure, and the City of Greater Geelong. 400 Under Part 2 of Ch 17 of the Patents Act, exploitation of an invention by the Commonwealth, or a State, for the services of the Commonwealth or a State is not an infringement of any patent rights, granted or pending. 401 Section 163, at the applicable time, provided as follows: Exploitation of inventions by Crown (1) Where, at any time after a patent application has been made, the invention concerned is exploited by the Commonwealth or a State (or by a person authorised in writing by the Commonwealth or a State) for the services of the Commonwealth or the State, the exploitation is not an infringement: (a) if the application is pending - of the nominated person's rights in the invention; or (b) if a patent has been granted for the invention - of the patent. (2) A person may be authorised for the purposes of subsection (1): (a) before or after any act for which the authorisation is given has been done; and (b) before or after a patent has been granted for the invention; and (c) even if the person is directly or indirectly authorised by the nominated person or patentee to exploit the invention. (3) Subject to section 168, an invention is taken for the purposes of this Part to be exploited for services of the Commonwealth or of a State if the exploitation of the invention is necessary for the proper provision of those services within Australia. 402 A reference to the Commonwealth or a State in s 163 includes a reference to an authority of the Commonwealth or an authority of a State: see s 162. There are a number of other related provisions, which I shall refer to only in so far as necessary to do so. 403 There has been a Crown use provision in the statutory law of the United Kingdom since the introduction of the Patents, Designs and Trade Marks Act 1883 (Imp): see Colin Bodkin, Patent Law in Australia (Lawbook Co, 3rd ed. 2019) at p 893. Crown use provisions were included in the Patents Act 1903 (Cth). Significantly different provisions were introduced by the Patents Act 1952 (Cth), ss 125 and 132 of which were in broadly similar (though not identical) terms to ss 162 and 163 of the present Act. Regarding s 125 of the Patents Act 1952 (which was broadly similar to s 163 of the applicable Act) Barwick CJ said in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, at 133-134: The evident purpose [of the provision] … is to ensure that the Governments of the Commonwealth and of the States have the invention available to them for the benefit of the services of the respective Governments at once, rather than at the end of the term of the letters patent. 404 The submissions made for Hi-Lux involved the proposition that each of VicRoads, the South Australian Department of Planning, Transport and Infrastructure, and the City of Greater Geelong was an authority of a State for the purposes of s 163 of the Patents Act. 405 It is convenient to begin with Barwick CJ's discussion in General Steel of the meaning of the expression "authority of the State". This question fell for consideration when the defendants, the Commissioner for Railways and others, sought to have the plaintiff's action for patent infringement struck out on the basis that, by reason of ss 125 and 132 of the Patents Act 1952, there was no reasonable cause of action against them. Barwick CJ commenced with the relevant State legislation from which the Commissioner for Railways derived its powers and functions. I note in passing that the Chief Justice considered the cases relating to Crown instrumentalities and Crown privileges and immunities to be of limited relevance: General Steel at 132-133. Barwick CJ held (at 132) that: The result of these provisions is that the Commissioner is in charge of a sub-department of government under the direct control and direction of a Minister of the Crown. That sub-department is to manage and control the railway system of the State, a function historically connected with government in New South Wales. He collects its revenues for the State and pays them into a Treasury fund; and he has the control and management of moneys appropriated by Parliament for the running of the railway system. 406 In Committee of Direction of Fruit Marketing v Australian Postal Commission (1980) 144 CLR 577 (COD case) an issue arose as to whether the Committee of Direction of Fruit Marketing (the COD), which was established under the Fruit Marketing Organisation Act 1923 (Qld) was an "authority of a State" within the meaning of a by-law made under the Postal Services Act 1975 (Cth). The High Court held that the Committee was such an authority. 407 In separate reasons, Gibbs J said, at 580, as follows: The words "authority of a State" naturally mean a body which is given by the State the power to direct or control the affairs of others on behalf of the State - ie, for the purposes of and in the interests of the community or some section of it. In some cases it may be decisive that the body concerned is given exceptional powers of a kind not ordinarily possessed by an individual or a company, and that those powers are intended to be exercised for a purpose that would ordinarily be regarded as a purpose of government. On the other hand, in some cases it may be decisive that the body is conducted in the interest and for the profit of its members. In all cases, however, it is necessary to have regard to all the relevant circumstances in order to determine the character of the body in question. … 408 His Honour concluded, at 582-583, that: There can in my opinion be no doubt that the C.O.D. exercises exceptional powers conferred on it by the State. The purpose for which those powers are conferred is to perform a function which under modern conditions is widely regarded as the proper function of a State, viz., to control the marketing of an important commodity produced by many people in many parts of the State. … On a consideration of the whole of the provisions of the Act, it seems to me that the powers are intended to be exercised in the interests of the community rather than in the interests of particular individuals. … I consider that the C.O.D. is given by the Act exceptional powers to direct and control the affairs of others for the purposes of the State and the interests of the community and not for individual profit or gain. … 409 In their joint reasons in the COD case, Mason and Wilson JJ (with which Barwick CJ agreed) concluded, at 593-594: In our opinion, the focus is upon government, and the function of government. If the appellant is to succeed, it must be because the proper conclusion, based on the legislation, is that the C.O.D. is not engaged in the work of government, notwithstanding that it is created a statutory authority with a wide range of powers. It would have to be shown that the authority represented by those powers in reality is derived from the growers, not from the State. We have endeavoured to state the proposition in terms as favourable as possible to the appellant, but however it be stated it is with respect manifestly insupportable. … 410 Some years later, in Stack v Brisbane City Council (1995) 59 FCR 71; 32 IPR 69, Cooper J held that the Brisbane City Council (BCC) was an "authority of a State" for the purposes of s 163(1) of the applicable Patents Act. After considering General Steel and the COD case, Cooper J held (at 78) that in determining whether an entity was "an authority of a State" for the purposes of s 163(1): The primary focus is on government and the function of government. The BCC will be an "authority of a State" if its functions are "impressed with the stamp of government" or if it has been given by the State the power to direct or control the affairs of others on behalf of the State. The role and involvement of the executive, through the Governor in Council or the appropriate minister, is also a relevant factor. In determining whether the BCC satisfies the test, no one consideration is necessarily decisive. It is a question of fact and degree in the circumstances and which depends on the structure, powers and functions of the BCC and the context of the statutory description which is to be satisfied. 411 This, in my view, correctly explains the proper approach to determining whether a body is "an authority of a State" within the meaning of s 162. This approach necessitates (as his Honour said at 78) an examination of the relevant statutory scheme in which the body has been created and within which it operates. 412 After examining the relevant legislation, Cooper J concluded in Stack, at 83-84, that: Thus, the legislative scheme creates the BCC a body corporate with considerable autonomy and wide discretion in the exercise of its powers and functions within its territorial boundaries. The BCC has power to and does make local laws on a wide range of issues including public transport, roads, parks, the environment, waste disposal, town planning, sewerage and water supply. Councillors and a Lord Mayor are elected at triennial elections. Funds for BCC operations are raised by, inter alia, the levying of rates and charges and by borrowings and investment. The BCC brings down its own Budget for each financial year. However, regard must be had to the degree of control over the BCC potentially and actually exercised by the Minister and the Governor in Council. All local laws must be approved by the Minister. The Minister and Governor in Council have ultimate control over town planning matters and State laws prevail over local laws to the extent of any inconsistency. Further, borrowings are subject to approval by the Governor in Council and the State Government is not subject to rates and charges which are levied on rateable land. It is also clear that the BCC does not assume its authority from the electors in the BCC elections, but rather from the legislative scheme outlined above. The context in which the BCC exists must also be noted. All the functions and powers exercised and exercisable by the BCC are matters within the constitutional power of the State Government. The BCC is not a "third tier of government" provided for in the Federal Constitution. Rather the BCC is a statutory body, established and ultimately controlled by State legislation. Its functions and powers are State governmental functions and powers, exercised in the interests of the community, which the State has delegated to it in legislation. Having regard to these matters, it can be seen that the BCC is involved in and is part of the State governmental function such that its activities are "impressed with the stamp of government". It has been given by the State the power to direct and/or control the affairs of the people within its territorial boundaries on behalf of the State. The executive of the State Government, through its Ministers and the Governor in Council, retains a prominent role and a practical involvement. Accordingly, his Honour concluded that the BCC was an "authority of the State" within the meaning of Ch 17 of the Patents Act, including s 163(1).

VicRoads 413 Hi-Lux submitted that the question of whether VicRoads was "an authority of a State" was not in dispute, since Axent had stated in its position statement on invalidity that "[t]he uses asserted as secret use are all within the section 9(d) exception, as they are all use by or on behalf of the State of Victoria" (at [29]). In closing, counsel for Axent confirmed that it was "admitted and agreed" that VicRoads is "an authority of a State". This concession was rightly made, as the following brief statutory references indicate. 414 As at 3 December 2003, s 15 of the Transport Act 1983 (Vic) established a Roads Corporation, consisting of one member appointed by the Governor in Council as Chief Executive of the Roads Corporation. The functions of the Roads Corporation were set out in s 16(1) and included: (c) to purchase, design, construct, erect, install, maintain and operate traffic signals and other traffic facilities for the purposes of traffic management and control; Section 16(3) provided that, in the exercise of its functions, the Roads Corporation must have regard to achieving various objects, including: (a) to make use of available transport resources in ways which are most beneficial to the community and with due regard to the enhancement of the environment; (b) to operate within Government policy; … (r) to provide mechanisms and full information to enable effective and timely participation by the community in decision making about facilities, services and road works. 415 Under s 21(2) persons employed by the Roads Corporation were to be employed "on the terms and conditions determined by the Corporation and approved by the Minister". Section 30 made provision for the management of the Roads Corporation, including for the Minister to appoint a Board and to determine its terms of reference. Further, s 31(1) provided that: The Corporation must exercise its powers and discharge its duties subject to the general direction and control of the Minister, and to any specific directions given by the Minister. 416 Although the relevant statutory framework changed with the introduction of the Transport Integration Act 2010 (Vic), effective from 1 July 2010, the Roads Corporation, renamed VicRoads, continued: see ss 80 and 82. Section 83 of the 2010 Act specifically provided that "[i]n performing its functions and exercising its powers, the Roads Corporation represents the Crown" and s 98 confirmed that the Corporation was subject to the general direction and control of the Minister, as well as to any specific directions the Minister might give. 417 Having regard to the relevant statutory framework and, in particular, the provisions to which I have referred, I find that VicRoads was "an authority of a State" for the purposes of s 163 of the Patents Act. It is evident that VicRoads is involved in and is part of the State government function such that its activities are "impressed with the stamp of government".

Commissioner of Highways, Department of Planning, Transport and Infrastructure (SA) 418 Hi-Lux submitted that its supply to the South Australian Department of Planning, Transport and Infrastructure was a supply to the Commissioner of Highways. This is borne out by the relevant supply contract, which was in evidence. Hi-Lux submitted, and Axent denied, that the Commissioner of Highways was an "authority of a State", for the purposes of s 163. 419 The statutory office of the Commissioner of Highways was created by s 8 of the Highways Act 1926 (SA). The relevant provisions were relevantly the same during the relevant period. 420 Section 8 provided: (1) There shall be a Commissioner of Highways who shall, subject to the Minister, be charged with the duty of carrying this Act into effect. (2) The Commissioner shall be a body corporate by the name of the "Commissioner of Highways" and by that name shall have perpetual succession and a common seal. Section 10(1) provided that the Governor may appoint the Commissioner of Highways. 421 Section 13 of the Highways Act provided for Ministerial control, as follows: (1) The Commissioner is subject to the control and direction of the Minister. (2) A direction given by the Minister under this section must be in writing. 422 Section 20 set out the general powers of the Commissioner, including the power to enter into such contracts as the Commissioner "thinks proper for the supply of materials or the execution of any works" subject to the approval of the Minister: s 20(1)(c). Section 20(4) required that a report of the leases or licences granted by the Commissioner each year be laid before each House of Parliament. Section 20B provided that the Commissioner may acquire land in excess of requirements for the purpose of roadwork if that acquisition is deemed expedient and is approved by the Minister. 423 Section 26 of the Highways Act made detailed provision enabling the Commissioner to carry out roadworks, including in a district, with the approval of the Minister, provided the Commissioner had first given the requisite notice to the council: see s 26(2). Section 26(3) provided that the Commissioner may, with the approval of the Minister, by notice published in the Gazette, assume the care, control and management of any road in a district for a specified period. 424 Section 28 sets out the reporting requirements of the Commissioner pursuant to which the Commissioner was required to submit, and the Minister to cause to be laid before each House of Parliament, a report on the operation of the Act during the previous financial year. There were specific provisions for a Highways Fund, which was to be under the control of the Commissioner and to receive money paid as required or authorised by statute: see, for example, s 31(3). Section 31(4) of the Highways Act made provision for the Treasurer in any financial year to make an advance out of the Consolidated Account not exceeding the amount that the Treasurer anticipates will, in that financial year, be received or collected and be payable into the Fund under s 31(3). Other provisions, such as ss 31A and 32, also emphasise the public and governmental character of the moneys in the Fund. 425 These and other provisions of the Highways Act would lead me to conclude that the Commissioner is involved in and is part of the State's governmental function. It is evident that the executive of the State Government has practical involvement in and significant oversight over the Commissioner's activities. The Commissioner is also made accountable to the State Parliament through reporting obligations. The Commissioner's activities are "impressed with the stamp of government", and the Commissioner is an "authority of the State" for the purposes of s 163 of the Patents Act. 426 Axent submitted that I should not be so satisfied in this case, because the works identified in the relevant supply contract between Hi-Lux and the Commissioner were for the Adelaide Entertainment Centre Precinct, and s 2 of the Highways Act provided that, unless relevant proclamations were made, the Highways Act does not apply to the City of Adelaide. Axent submitted that the relevant status of the Commissioner in relation to these works, and whether the Commissioner was acting pursuant to legislative powers when entering into the contract, was unclear. I reject this submission. 427 A letter of acceptance of tender dated 30 May 2014 and a contract dated 12 August 2014 were in evidence. The letter of acceptance included a heading that indicated that the relevant variable speed limit signs were for the Adelaide Entertainment Centre Precinct. At the relevant time s 2(1) of the Highways Act provided that, subject to the section, "this Act does not apply to or in relation to the City of Adelaide". Section 2 read as follows: 2 - Act not to apply to City of Adelaide (1) Subject to this section, this Act does not apply to or in relation to the City of Adelaide. (1a) This Act applies, or a specified provision or provisions of this Act apply, to a road or roadwork that is within the ambit of a proclamation made by the Governor for the purposes of this subsection. (1b) A proclamation under subsection (1a) may only relate to a road (or part of a road) that runs through, or borders, a part of the Adelaide Park Lands under the Adelaide Park Lands Act 2005. (1c) The Minister must consult with the Adelaide City Council before a proclamation is made under subsection (1a). (2) The Adelaide City Council must comply with any notice in writing given by the Commissioner to the Council requiring the Council to construct or reconstruct a portion of road in the City of Adelaide so as to conform with the construction or reconstruction of an adjoining portion of road under the care, control and management of the Commissioner. (2a) A notice under subsection (2) does not need to relate to a road within the ambit of a proclamation under subsection (1a). (3) In this section - Adelaide City Council and City of Adelaide have the same meaning as in the City of Adelaide Act 1998. (Bold and italics in original) 428 Section 2 is not directed to the office of the Commissioner of Highways; and the Commissioner's activities remain "impressed with the stamp of government". The effect of s 2 is to carve out the "City of Adelaide" from the ambit of the Highways Act, in that the provisions of the Highways Act, without more, cannot authorise the Commissioner to carry out certain activities within the City's bounds. For example, road works that might otherwise be permitted by s 26 would not be permitted within the City limits. In order for the Commissioner to carry out road works within the City of Adelaide, it appears that there would also need to be a proclamation of the kind to which s 2 refers. The important point is, however, that s 2 does not alter the essential character of the Commissioner of Highways as an "authority of the State"; rather, it circumscribes the authority of the Commissioner to undertake activities within the City of Adelaide. 429 There is a further difficulty with Axent's argument at this point. Section 2 provides that "City of Adelaide" has the same meaning as in the City of Adelaide Act 1998 (SA). At the relevant date, s 4 of this latter Act provided that the "City of Adelaide" meant the area of the Adelaide City Council. The "Adelaide City Council meant "The Corporation of the City Adelaide". In this context, the reference to the "City of Adelaide" is not a geographical reference to an urban area including a city centre and surrounding suburban neighbourhoods. It is a reference to a fixed area of local government, exclusive of other areas including neighbouring areas. It is a matter of notorious fact, of which the Court may take judicial notice, that the Adelaide Entertainment Centre Precinct is located in Hindmarsh, in the City of Charles Sturt, bordering the City of Adelaide: see Cross on Evidence (12th ed, 2020), at [3115] and following. It may be that an installation site is on a road bordering the City of Adelaide. There is no evidence to indicate that it is within the City of Adelaide. There is, furthermore, no evidence to suggest that the Commissioner of Highways acted outside power in entering into the relevant supply contract with Hi-Lux, a possibility that Axent's argument in this context apparently embraces. If it were necessary to do so, I would apply the presumption of regularity, according to which an act that can be done legally only after the performance of some prior act carries with it the presumption of the due performance of the prior act: see, for example, Food and Beverage Australia Limited v Nash [2020] SASC 92 at [152]-[160] and the cases there cited; and Popovic v Tanasijevic (No 5) [2000] SASC 87 at [85].

City of Greater Geelong 430 Hi-Lux also contended that the City of Greater Geelong was an authority of the State for the purposes of s 163 of the Patents Act and in so doing referred to s 5 of the City of Greater Geelong Act 1993 (Vic) and ss 111 111A, 132, 133, 135, 209 and 218A of the Local Government Act 1989 (Vic). Hi-Lux's reference to the City of Greater Geelong is a reference to the Greater Geelong City Council. 431 Section 5(1)(a) of the City of Greater Geelong Act relevantly provided for the constitution of a Council to be known as the Greater Geelong City Council as a body corporate under the Local Government Act. 432 Subsection 3C(1) of the Local Government Act stated that: The primary objective of a Council is to endeavour to achieve the best outcomes for the local community having regard to the long term and cumulative effects of decisions. Subsection 3D(1) provided that "[a] Council is elected to provide leadership for the good governance of the municipal district and the local community". Subsection 3E(1) provided that the functions of the Council include: … (b) planning for and providing services and facilities for the local community; (c) providing and maintaining community infrastructure in the municipal district; … 433 At the relevant time, s 111(1) of the Local Government Act provided that a Council, such as the Greater Geelong City Council, may "make local laws for or with respect to any act, matter or thing in respect of which the Council has a function or power under this or any other Act". 434 Section 186 in Part 9 of the Local Government Act made provision for a Council to enter into contracts. Other provisions in Part 9 addressed other specific functions and powers. In particular, ss 203 to 207 touched a Council's responsibility to care for and manage roads and traffic. Division 3 of Part 9 included provisions that required a Council to comply with the Best Value Principles in the provision of its services. These were evidently to benefit the community served by a Council, such as the Greater Geelong City Council. Furthermore, s 208H, within this Division, enabled the Minister to publish Codes "in relation to how the Councils are to give effect to the Best Value Principles". 435 Pursuant to s 132, at the relevant time a Council was required to prepare a performance statement as soon as reasonably practicable after the end of each financial year and to submit that statement to its auditor. Within three months of the end of the financial year a Council was also required to submit a performance statement to the Minister. Pursuant to s 135, the Minister was empowered to direct a Council to submit financial statements if the Minister "considers that it is necessary or appropriate in the public interest". 436 Pursuant to s 209, the Minister may appoint a person as a Commissioner to inquire into a Council's affairs and to report to the Minister. Upon receipt of the Commissioner's report, the Minister might in specified circumstances make "any recommendations the Minister thinks fit": s 218. Until the Minister is satisfied that these recommendations have been given effect, the Treasurer may refuse to pay money out of the Consolidated Fund, and take other steps to oblige a Council to comply with the Minister's recommendations. 437 As already stated, in Stack Cooper J held that the Brisbane City Council was an "authority of the State". The legislation governing the Greater Geelong City Council, though by no means identical, also shows that the primary focus of the Greater Geelong City Council is on the functions of government. It has been given power by the State to direct and control the affairs of others on behalf of the State. It is, however, subject to the oversight and control of the State executive, especially the Minister. In these circumstances, I find that its functions are "impressed with the stamp of government" such that it is an "authority of the State" for the purposes of s 163 of the Patents Act.

Exploited for the services of the authority of the State 438 In order to engage s 163(1) of the Patents Act, Hi-Lux must not only establish that each of the relevant bodies was an authority of a State but also that the invention was exploited for the services of the authority of the State. In Stack at 84, Cooper J held that "for the services of the State" in s 163(1) should be read to include for the services of an authority of a State, which is exploiting the invention. Section 163(3) further provides that, subject to s 168 (which is not presently applicable) an invention is taken to be exploited for, relevantly, services of an authority of a State "if the exploitation of the invention is necessary for the proper provision of those services within Australia". 439 Hi-Lux submitted in closing that the provision and regulation of roads was a service that was provided by each of, relevantly, the States of Victoria and South Australia, and speed limit signs were a necessary aspect of the provision of those services. 440 Whether an exploitation of an invention is characterised as being "for the services of" the State or an authority of a State may be determined by reference to the historical or accepted functions of the State. In General Steel, Barwick CJ held that, having regard to the purpose of cognate provisions in the Patents Act 1952, the railway system of the State was a service of the State. His Honour held (at 134): The railway system of the State is, in my opinion, undoubtedly a service of the State and the use of the invention in the construction of railway carriages to be used by the Commissioner in that railway system is a use for a service of the State or for the services of the State within the meaning of the expression in the Patents Act 1952, whichever may be the proper way to read the final words of s.125 (1). One could scarcely imagine that sections such as ss.125 and 132, with their evident practical purpose, did not extend to include within the expression the use of the services of the Commonwealth or State, the use of an invention for the purposes of one of the Government railway systems in Australia. The Chief Justice had earlier observed (at 132) that the management and control of the railway system of the State was "a function historically connected with government in New South Wales". 441 In Pfizer Corporation v Ministry of Health [1965] AC 512, a majority of the House of Lords held that an act was done "for the services of the Crown" if it was done for the purpose of performing a duty or exercising a power which was imposed upon or invested in the executive government by statute or prerogative. The particular issue in Pfizer Corporation was whether public sale of a patented drug fell within the Crown use provisions of the Patents Act 1949 (UK). The minority view was (at 568) that the sale of the invention to members of the general public - thereby removing customers from the patent holder - was outside the scope of the section. 442 Pfizer Corporation was considered by Cooper J in Stack at 85, where his Honour stated: In Pfizer Corporation the House of Lords had occasion to consider s 46(1) of the Patents Act 1949 (UK) which was in the following terms: Notwithstanding anything in this Act, any Government department and any person authorised in writing by a Government department may make use and exercise any patented invention for the services of the Crown in accordance with the following provisions of this section. Pfizer Corporation was the patentee in the UK for the antibiotic drug tetracycline. The drug was used in the National Health Services. In 1961 the Minister of Health invited tenders for the supply of tetracycline from various firms and offered protection to the tenderers relying on s 46 of the Patents Act 1949 (UK). The successful tenderer imported the drug from Italy where it was legally produced by a supplier without the plaintiff's authority. Pfizer Corporation sought declarations that the Ministry of Health had no power under s 46 of the UK Act to authorise this method of supply. The Ministry of Health was a government department within the meaning of the section and gave the successful tenderer written authority. The Ministry supplied the drug to National Health Hospitals for administration to both in-patients and out-patients and the main question in the case was whether this use of the drug was "for the services of the Crown". A majority of the House of Lords (Lord Reid, Lord Evershed and Lord Upjohn) held that the use made of the patented drug was "for the services of the Crown" within the meaning of s 46(1) of the Patents Act 1949 (UK). Both the Court of Appeal and the majority in the House of Lords held that an act was done "for the services of the Crown" if it was done for the purpose of performing a duty or exercising a power which was imposed upon or invested in the executive government by statute or by prerogative. Lord Wilberforce, in whose judgment Lord Pearce agreed, thought such a definition of the powers of the Crown to use or authorise the use of patented inventions was alarmingly wide. The result of accepting the Ministry's argument (and the formulation of the majority) was, in Lord Wilberforce's view (at 568): "... to withdraw from the benefit of the patent either a large or preponderant part of the customers to supply whom the invention was made (and supposedly protected by a monopoly of the right to vend) - customers being members of the general public, themselves in no way part of a Government department or of a Crown service. To accept this seems to me to go far beyond such a logical extension of the Crown's rights as a liberal process of judicial interpretation may properly accept: it gives to those rights another dimension altogether which it is the province of the legislature to define on a fresh consideration of the respective interests of the public and of the inventor." 443 Besides General Steel and Pfizer Corporation Cooper J in Stack also considered Pyrene Co Ltd v Webb Lamp Co Ltd (1920) 37 RPC 57 and Aktiengesellschaft für Autogene Aluminium Schweissung v London Aluminium Co Ltd (No 2) (1923) 40 RPC 107. His Honour observed that (at 88): In each of the three first instance cases there was the supply of an item by a contractor for the direct use of the authority of a State (in the case of General Steel Industries) or the government department (in the case of the UK cases). In no case was the item re-supplied by the State or department to a third party in competition to the patentee. Factually each of these three cases falls within the majority and minority views in Pfizer Corporation. The law in this country is no narrower than the minority view in that decision. If the facts in the instant case fall within the minority view in Pfizer Corporation and the first instance cases referred to above, it is unnecessary for present purposes to determine whether the majority view in Pfizer Corporation is the law of Australia. 444 On this basis, Cooper J held that (at 88): In the instant case the water meters were, or are to be, supplied to the BCC to be attached to its pipework to measure the quantity of water supplied by it from the public supply to any landowner to whose land reticulated water is supplied. The water meter is not re-supplied to the land owner; it is not used in the relevant sense by the land owner. The water meter is an asset of the BCC which enables it to quantify the water actually supplied and to charge for it by reference to that quantity. The water meter becomes a component part of the apparatus by which water is supplied by the BCC for consumption in the territorial area of the BCC, such supply being a function of local government. Conformably with the approach taken by Barwick CJ in General Steel Industries the use of the water meters by the BCC as part of the supply by it of reticulated water in the Brisbane local authority area is the exploitation by the BCC as an authority of a State of the invention, the subject of Australian petty patent number 645740, for the services of it as such an authority. In consequence, s 163(1) of the Act operates to prevent the exploitation by the BCC of the invention constituting an infringement of the said petty patent. (Emphasis added) 445 In the present case, Hi-Lux supplied and installed electronic speed limit signs to each of VicRoads, the South Australian Commissioner of Highways and the Greater Geelong City Council as part of the provision to each of them of infrastructure for the control of road traffic for the public benefit. The signs became assets of each of these authorities. Each of them used the signs in the discharge of their statutory functions regarding road management and traffic control. The management of roads and the control of the traffic along them is also a recognised function of State government. I also accept that, as Hi-Lux submitted, the use of speed limit signs is necessary for the proper provision of those services within Australia. 446 Whether a finding that the use of speed limit signs is necessary for the proper provision of the relevant services is enough to engage the defence that s 163 might appear to provide is open to doubt, however. The operation of s 163(3) is also relevant in this case, although it did not fall for consideration in Stack. The operation of s 163(3) was not, however, the subject of any useful submission by the parties. 447 Research discloses that s 163(3) was introduced by Patents (World Trade Organization Amendments) Act 1994 (Cth). In its outline the Explanatory Memorandum stated that: The purpose of this Bill is to amend the Patents Act 1990 to bring it into line with the standards and principles prescribed for patents in the Agreement Establishing the World Trade Organization. The Explanatory Memorandum further stated that "exploitation of an invention for services of the Commonwealth or of a State is limited to exploitation necessary for the proper provision of those services within Australia". 448 The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), Annex 1C to the Agreement Establishing the World Trade Organization, provides little assistance with reference to the proper interpretation of s 163(3): see, in particular, Article 31. 449 I accept that, absent s 163(3), the exploitation of these signs by each of the three authorities of a State is for the services of each of them. It may be, however, that, as Axent submitted, exploitation was not necessary in the sense contemplated by s 163(3) because alternative signage was available and widely used. If Axent's construction of s 163(3) were accepted, then Hi-Lux's defence under s 163(1) would fail. Alternatively, it may be that, having regard to the claimed benefits of the invention, the exploitation would in fact meet even what was construed to be a stringent test in s 163(3). A possible consideration that might support this later conclusion is the lack of commercial benefit to a State or authority of a State: compare T. Dembo, "An examination of the Crown use provisions in the Patents Act" (2007) 18 Australian Intellectual Property Journal 70 at 83. 450 In the absence of any useful argument about the proper construction of s 163(3), I do not propose to enter upon further discussion of that provision. It is unnecessary to do so as Hi-Lux has failed to satisfy me, for a different reason, that it is entitled to the benefit of the defence.

Authorised in writing by an authority of the State 451 The critical question, so far as Hi-Lux is concerned, is whether Hi-Lux was relevantly authorised in writing by an authority of a State (i.e. by VicRoads, the South Australian Commissioner of Highways or the Greater Geelong City Council) to supply and install the signs. 452 Relying on Stack, Hi-Lux submitted that a document evidencing a contractual supply was sufficient to amount to an authorisation, and that Hi-Lux had supplied the signs directly to a State in circumstances where Hi-Lux received a written purchase order or other request to do so. In closing submissions at the hearing, counsel for Hi-Lux contended that there should be no requirement to identify the patent in a relevant written authorisation; that Schmanski v Highway Safety Developments Ptv Ltd & De Neefe (Supreme Court of Victoria, 18 February 1985, BC8500295); (1985) AIPC 90-213 offered limited guidance, being an interlocutory decision, and that policy considerations did not support a departure from Stack. 453 Axent submitted that Hi-Lux bore the onus of establishing that Hi-Lux was, relevantly authorised to supply and install the relevant signs. Axent contended in written submissions that: a. there is not a single document which expressly contains any relevant authorisation; and b. the documentation exhibited is incomplete. The types of documents provided vary for each supply, but include items such as letters of acceptance, quotations, progress claims, invoices, purchase orders, contracts and email correspondence. Detailed contractual terms are provided for only one of the nine VicRoads supplies, with the documentation for the other VicRoads supplies being minimal. They also refer to other documentation not placed into evidence. The DPTISA [(Department of Planning and Transport - South Australia)] contract is provided, but minimal documentation is provided in relation to the City of Grater [sic] Geelong. … In relation to the City of Greater Geelong the only documents in evidence are a Hi-Lux quotation and a City of Greater Geelong email in response, which makes no reference to any patent rights or any authority. The terms and requirements to which that quotation responded are not in evidence, and nor are the full terms of the contract. Without the full terms of the various contracts, Axent contended that the Court "simply cannot safely make any findings as to what those contracts require". 454 Axent further submitted that "the proposition that a contract can implicitly grant authority, which is the gist of Hi-Lux's submissions, given that no express terms having been identified, has been questioned and disagreed with in other decisions". Axent contended, relying on Schmanski and Embertec Pty Ltd v Energy Efficient Technologies Pty Ltd [2013] FCA 2; 99 IPR 103, that the authorisation must be express. Axent submits that the decisions in Schmansksi [sic] and Embertec are to be preferred as more in keeping with the wording, intention and effect of the legislative scheme, noting that:- a where an authority is given section 165 in effect converts a claim for infringement against a contractor into a claim for payment against by [sic] the relevant authorising authority; b. section 164 provides that the authority granting the authorisation has an obligation to inform the patentee and give them any information about the exploitation that they reasonably require; and c. section 163(2) specifically provides that the authorisation in writing can be provided by the relevant authority either before or after the relevant infringing act. In circumstances where the provision of a relevant authorisation triggers obligations both to advise and to pay remuneration there is every reason to give the legislative provisions their ordinary meaning: an authority in writing means that the authority has to be in writing. The fact that there is some sort of documentation describing the contractual obligation is not the same thing. Further, in the Stack, Schumansksi [sic] and Embertec decisions the Court had the full terms of the contract placed into evidence. As noted above, that is not the case here. (Emphasis in original) 455 Axent also submitted that the two contracts that were in evidence contained terms "that express a contrary intention", noting that the VicRoads contract and the contract with the South Australian Commissioner of Highways stated, respectively: The Contractor shall indemnify VicRoads at all times against any claim for compensation for any action, claim, demand or expense arising from or incurred by reason of the existence of any patent, design, trademark or copyright or other protected right arising from the performance of the Contract. The Contractor indemnifies, and undertakes to keep indemnified the Principal, from and against any claim that the supply of goods by the contractor infringes the intellectual property rights of any person. "In other words", so Axent submitted, "both contracts expressly shift any financial obligation for any breach of any third party's patent rights to the contractor". 456 I turn again to the consideration of this issue in General Steel and Stack. In General Steel, Barwick CJ said, at 135-136: I turn now to the position of the contractors to the Commissioner who are co-defendants in these applications. Again I deal first with submissions based on Order 26, r.18. Confining myself to the plaintiff's statement of claim, which in case of ambiguity must be read, to use the pleader's convenient phrase, against him, I observe that the plaintiff, in pars. 10, 13 and 14 of the statement of claim, which I have abstracted in the opening portion of these reasons, says that the agreements made between the Commissioner and the other defendants call for and require the use of the plaintiff's invention. These paragraphs allege that the Commissioner has contracted with each of the other defendants to manufacture the invention and use it as part of complete railway carriages for use by the Commissioner on the railway system of the State. I do not think these paragraphs merely say that the agreement with the Commissioner requires the doing of acts which happen because of the manner in which the other defendants have chosen to perform them to infringe the letters patent. I read them as saying that the agreement stipulates the use of a coupling which necessarily infringes the letters patent, whether knowingly or inadvertently being immaterial. No doubt in the case of a contract with an authority of a State for manufacture or for supply of an article, it may be that the contractual terms leave the contractor with such a choice as to his method and design of manufacture that he is free to perform the contract without infringing an invention, or it may be that, as I think it is here, the contractual terms require the very act which amounts to an infringement of some patentee's letters patent. In the former case it would seem that the contractor needs some written authority to make use of the invention. In the latter case the contract itself being in writing is a sufficient authority. Pyrene Co. Ltd. v. Webb Lamp Company Ltd. [(1920) 37 R.P.C. 57, at p. 65]; Aktiengesellschaft fur Autogene Aluminium Schweissung v. London Aluminium Co. Ltd. [No. 2] [(1923) 40 R.P.C. 107, at pp. 116, 117]. In the absence of written authority, where the contract itself is insufficient as such an authority, express or implied, the contractors may be held to infringe the patent, whereas the act of the Commissioner in contracting for the infringement or otherwise using the invention does not of itself amount to an infringement: see Dixon v London Small Arms Co. [(1875) L.R. 10 Q.B. 130]. But the present is not a situation such as to give rise to that case and this for two reasons: first, these are contracts for manufacture and not for sale or supply, and the contracts do require the infringement … By contrast, in this case … according to the plaintiff's allegations in the statement of claim, the agreements themselves require the other defendants to manufacture and in such manufacture to do that which amounts to a use of the invention. I conclude that the plaintiff's claim is that the other defendants were authorized by the Commissioner, whom I find to be an authority of a State, to use the invention, i.e. to make a railway vehicle body and truck central bearing of a design which in fact incorporates the plaintiff's invention. (Emphasis added) 457 The distinction drawn by Barwick CJ in General Steel is between a situation where: (1) contractual terms leave the contractor with a choice as to method and design of the article for manufacture and/or supply so that the manufacture or supplier is free to perform the contract without infringing the invention; and the situation where contractual terms require the very act that amounts to an infringement of the claims of the patent. This is a critical distinction in a case where it is said that the contract for manufacture or supply contained the authorisation to which s 163(1) refers. The distinction was referred to by Cooper J in Stack. 458 The consideration of the authorisation in writing issue in Stack also indicates that that case was different to the present. In Stack Cooper J said, at 88-89: It is submitted for the respondents that authorisation in writing for the purposes of s 163 is contained in the tender documents themselves which ultimately became contractual terms, or alternatively in a letter dated 7 April 1994 from the BCC to DS [(Davies Shephard Pty Ltd)]. Counsel for the applicants conceded that s 163(2) has retrospective operation and that in consequence the letter of 7 April 1994 is sufficient written authorisation of the conduct of the second and third respondents for the purposes of the section. For the sake of completeness the letter relevantly contained the following: "For the avoidance of doubt, the BCC hereby authorises DS, for the purposes of s.163 of the Patents Act 1990 to manufacture and supply to the BCC water meter assemblies of the type previously: (a) submitted by DS as a sample with its tender for contract no. R22/93/94; and (b) supplied to the BCC under the Interim Orders. The authorisation hereby granted extends to the exploitation (if any) by DS of any invention the subject of the Patent. For the purposes of this letter the term `DS' includes: i) all persons (natural or corporate) related to DS (as that term is understood in the Corporations Law); and ii) all subcontractors engaged by DS for the purpose of the manufacture of water meter assemblies for supply to the BCC. Yours faithfully..." In light of these concessions, question (c) must be answered in the affirmative. 459 In other words, Cooper J held that DS was "authorised in writing" by BCC to exploit the invention by manufacturing and supplying it on account of a concession by the applicants that the letter to which he referred had a retrospective operation, and that letter contained an express authorisation, "for the purposes of s 163", to exploit the invention. As Barwick CJ made clear in General Steel and Cooper J also makes clear in Stack the test is whether, relevantly, the State or its authority authorised the infringement, as for example, by a contractual stipulation that a coupling be used that necessarily infringes the patent, it being irrelevant whether this authorisation was given knowingly or inadvertently. The existence of an indemnity clause, which was a matter relied on by Axent, can be of only peripheral, if any, relevance to the question whether the contractual terms require the very act that is an infringement of the claims of the Patent. 460 Cooper J's consideration of the issue did not end here, however, because he subsequently turned, at 89, to the issue whether DS had been authorised in writing at an earlier time, it being said that this was relevant to costs. His Honour said, at 89-90: Mr. Caine of counsel submitted that the tender documents, because they relate specifically to a particular configuration of a water meter assembly, namely the assembly which was ultimately supplied in conformity with the tender, amount to a written authorisation within s 163. … Tender Drawings No WM 16 is a diagram of a water meter manifold. A sample water meter incorporating a manifold of the type illustrated in "WM16" was provided by DS to the BCC before the contract was entered into. The BCC accepted the sample provided and it was the sample which formed the agreed design of the assembly under the contract. There is no dispute that the sample and the water meters ultimately supplied incorporated a manifold which infringed the petty patent. Nor is there any dispute that the contract as let by the BCC to DS required the supply of water meters in accordance with the sample. In these circumstances the respondents submit that the acceptance of the tender and the formation of the contract to supply by the letter of the BCC dated 14 February 1994 constituted the relevant authority in writing. (Emphasis added) 461 His Honour accepted the submission that the tender documents in that case amounted to written authorisation for the purposes of s 163 because they included a drawing of the article that the contracting parties agreed was to be supplied under the contract, and the making and supply of such an article necessarily involved patent infringement. As his Honour said, at 91: Barwick CJ expressly contemplated a situation such as that contended for by the respondents as being one within the ambit of s 163 of the Act. That is, where the terms of the tender or contract between the Crown and another party are such as to require the successful tenderer or contractor to infringe the patent in order to properly perform the contract, that fact makes the written contract or tender documents themselves a sufficient authority. For this reason, Cooper J in Stack was satisfied that the tender documents constituted an authorisation in writing for the purposes of s 163 of the Patents Act. 462 As noted above, Axent submitted that Embertec and Schmanski undermined Hi-Lux's case in that they did not support the proposition that a contract can implicitly grant authority. Hi-Lux submitted, referring to the tradeable certificates discussed in Embertec, that Embertec was relevantly distinguishable because there was no use or purchase by the Crown. 463 In refusing an interlocutory injunction sought by the patentee against the respondent for the alleged infringement of its patent, Foster J considered the respondent's claim that it had a defence under s 163. His Honour said, at [67]: EETECH [(Energy Efficient Technologies Pty Ltd)] submitted that it should be inferred from the fact that the authority of the ESCV [(Essential Services Commission Victoria)] was given to the installation of the EETECH power board that the installation of that power board by EETECH and its contractors is necessary for the proper provision of ESCV and the State of Victoria of the services constituted by the VEET [(Victorian Energy Efficient Target Scheme)] Act and scheme. EETECH also submitted that it was not necessary that the relevant State authority had knowledge of the fact that those it had authorised would infringe a registered patent. 464 His Honour concluded, at [69]: I think that Embertec's submissions in relation to the potential operation of s 163 are correct. The nub of the matter is that the ESCV has simply not required EETECH, by any approval or contract, to infringe the 197 patent. 465 I agree that Embertec provides little support for Hi-Lux's case but that is because it constituted an application of the principles set out in Stack and General Steel to the circumstances disclosed in the evidence in support of the patentee's interlocutory injunction application. The reasons of Foster J (see above) indicate that his Honour considered the relevant difference in Embertec was the absence of a contractual term requiring the installation of the relevant article. 466 Schmanski is also consistent with General Steel and Stack. In Schmanski King J refused an application for an interlocutory injunction made in the Supreme Court of Victoria by a patentee seeking to restrain the alleged infringing sale of roadway traffic delineators. With reference to the predecessor provision to s 163, King J said at 10: It was common ground before me that the potential users of the parties' delineators are public road authorities, mainly State and Territory authorities. Dr. Emmerson put to me the argument that the plaintiff could not object to the use of the patented invention by such authorities as the latter are entitled to use it under s[]125 of the Patents Act; if they do so the patentee's only claim to relief is to compensation. This appears to be correct. General Steel Industries Inc v Commissioner for Railways (NSW) (1964-65) 112 CLR 125. However the defendants can claim the benefit of s 125 only if authorised by such an authority to supply the allegedly infringing article (per Barwick, CJ sup. cit. at pp. 135-6). Contract documents have been furnished in this case, but they do not appear to give the necessary explicit authorisation. 467 Interlocutory injunctive relief was not, however, refused on this basis but on the basis that the drafting of the specification left the defendants uncertain as to the scope of the monopoly. As in the case of Embertec, this case was, in my view, an application of the principles set out in Stack and General Steel in the context of an application for interlocutory injunctive relief. I would agree, however, that Schmanski, like Embertec, illustrates the importance of evidence of actual authorisation, which may be express or, as General Steel indicates, necessarily implied from the nature of the relevant transactions.

Evidence of authorisation 468 It is necessary to assess the evidence on which Hi-Lux relied with the above principles in mind. It will be apparent by now that the parties' submissions rarely descended to detail. 469 The evidence relied on by Hi-Lux was annexed to Mr Sozio's third affidavit and marked "SVS-26" to "SVS-36". Mr Sozio's description of these documents was not challenged. "SVS-26" was a Letter of Acceptance from Graham Clarke to John Taranto of Hi-Lux dated 19 December 2011 in relation to VicRoads Purchase Order C57414 and Quotation Q42-03674 for a job at Centre Road between Cairns Grove and Arthur Street, Bentleigh and various Hi-Lux progress claims. "SVS-27" was a Letter of Acceptance from Michael Barker of VicRoads to John Taranto of Hi-Lux dated 26 October 2012, Purchase Order C71610 and various Hi-Lux invoices in relation to VicRoads and Quotation 042-04135 for a job at Maroondah Hwy between Market and Pratt St Ringwood. "SVS-28" was a VicRoads Purchase Order C95411 dated 11 September 2014 and Hi-Lux invoice dated 21 January 2015 regarding a job at Whitehorse Road, Blackburn. "SVS-29" was a VicRoads Purchase Order C98170 dated 9 December 2014 and Hi-Lux invoice dated 13 January 2015 regarding a job for VicRoads at Benalla. "SVS-30" was a Letter of Acceptance from Henry Lam of VicRoads to Michael Maguire of Hi-Lux dated 23 April 2015, Purchase Order M04750 dated 29 June 2015 and Quotation Q42-06806 dated 9 April 2015 in relation to a job at Princess Hwy (East), Bairnsdale. "SVS-31" was a VicRoads Purchase Order M06032 dated 4 August 2015 and Hi-Lux Quotation No. 20578 dated 31 July 2015 regarding a job for VicRoads at Warrigal Road, Holmesglen. "SVS-32" was a VicRoads Purchase Order M08136 dated 13 October 2015, Quotation No Q4107303 dated 6 October 2015 and Hi-Lux Delivery Docket dated 31 October 2015 for a VicRoads Metro North West Region job. This included the Conditions of Tendering (Quotations/Contract). "SVS-33" was a VicRoads Purchase Order Q08878 dated 22 November 2016 and various Hi-Lux invoices regarding a Highton and North Geelong job. "SVS-34" was a VicRoads Purchase Order Q12672 dated 21 April 2017 and Hi-Lux invoice dated 26 May 2017 regarding a VicRoads Metro North West Region job. "SVS-35" was a Letter of Acceptance of Tender from Tom McDermott, Commissioner of Highways (South Australia), to Hi-Lux dated 30 May 2014 and Contract No. 14C039 between Commissioner of Highways (South Australia) and Hi-Lux dated 12 August 2014. "SVS-36" consisted of email correspondence from Paul Miocic of City of Greater Geelong to Hi-Lux on 11 June 2013 regarding an offer for installation of ESLS signs and a Hi-Lux Quotation to City of Greater Geelong dated 4 June 2013. 470 I address the position of VicRoads first, on the basis that there is no relevant difference between the documents relating to it so far as this issue is concerned. As indicated above, the documents relating to VicRoads mostly consisted of purchase orders but included three letters of acceptance, some invoices, five quotations and a delivery docket. "SVS-32" included contractual Conditions of Tendering (Quotations/Contract). 471 Leaving aside the Conditions of Tendering (Quotations/Contract), each of the documents pertaining to Hi-Lux's supplies to VicRoads failed to provide written authorisation to exploit the invention. For one thing, none of the documents required Hi-Lux to supply and install a speed limit sign in accordance with the invention. The documents leave open the possibility that Hi-Lux had a choice as to the electronic speed sign supplied, leaving it free to perform the relevant contract without infringing the claims of the Patent. 472 I interpolate here that it is unnecessary to deal with Axent's indemnity clause argument because it is clear that Hi-Lux was under no contractual obligation to supply an infringing item: see [455]. 473 There was little evidence to support Hi-Lux's case with respect to the City of Greater Geelong, and certainly not enough to support the conclusion that Hi-Lux had been given a written authorisation to exploit the invention of the Patent. An email dated 11 June 2013 from a representative of the City of Greater Geelong (included in SVS-36) referred to the installation of electronic speed signs "as detailed in the attached quotation", and the quotation referred to "commissioning and connection to NMS of all ESLS". There were no further details. These documents leave open the real possibility that the supplier (Hi-Lux) had a choice to supply a non-infringing sign. 474 The position with respect to the South Australian Commissioner of Highways is less straightforward. The contract between the Commissioner of Highways and Hi-Lux, which was in evidence (SVS-35) was for the supply and installation of variable speed limit signs and message signs for the Adelaide Entertainment Precinct. The contract comprised a formal instrument of agreement and a schedule of documents, including the "Specification". The formal instrument of agreement recorded that: A The Principal has requested the Contractor to provide and install the Goods specified in the Agreement. B. The Contractor has agreed to provide and install the Goods in accordance with the terms and conditions to this Agreement. 475 The Specification for the Contract included a number of parts. These parts included parts of the Department of Planning, Transport and Infrastructure: Master Specification for Transport Infrastructure (DPTI Master Specification). Part 1 provided, in cl 3.1 that: The Contractor shall supply the Goods as detailed in Schedule 1 and in accordance with Specification Part 266 "Supply of Variable Message Signs" and shall submit complete design documentation for the proposed signs, wiring and sign enclosures. Schedule 1, headed "Schedule of Rates", referred to a number of "B Size VSLS". 476 The Specification for the Contract also included "Part 266: The Supply of Variable and Changeable Message Signs". Part 266 had a number of sub-headings including "5. Signs Using LED Technology". The requirements for variable message signs and variable speed limit signs were set out under this heading. 5.3 was as follows: 5.3 Variable Speed Limit Signs VSLS (also referred to as "ESLS" - Electronic Speed Limit Signs) shall comply with DR AS 5156, except that unless otherwise specified, discrete characters are not permitted. LED digit displays shall consist of white pixels on a matt black background. The annulus shall consist of red pixels on a matt black background. The signs shall be able to display any speed limit from a totally blank display to 110 kph (e.g. blank, 25, 40, 50, 60, 70, 80, 90, 100 and 110kph). When the speed limit is reduced from the nominal speed limit, the annulus (or other conspicuity device) shall be capable of being flashed. The annulus is never to be totally blank; some of the pixels of the annulus shall be displayed continuously. Signs within close proximity to each other shall have their flash rates synchronised and their displays shall have a uniform appearance. The display shall be visible and discernible under all ambient light and weather conditions, and shall be of uniform hue and light intensity across the face of the signs. The luminous intensity of the displays shall be variable and automatically controlled by a light-sensing device. Drawings also formed part of the contract. 477 A further document, entitled "General Conditions of Contract for Supply of Goods with Installation", formed part of the contract between Hi-Lux and the Commissioner of Highways. This included cl 19.2, being the clause upon which Axent relied in support of its submissions that there was no authorisation in writing. Clause 29 also provided that: To the maximum extent permitted by law, the Contractor acknowledges and agrees that no representation, warranty, guarantee or other statement, express or implied, was made or given to the Contractor by the Principal prior to entering into this Agreement as to any benefits which the Contractor might enjoy as a result of entering into this Agreement. There was also an entire agreement clause: see cl 32. 478 An email trail formed part of the tender submission and it seems part of the contract. Within this email trail was a list of exclusions, including some affecting "5.3 -Variable Speed Limit Signs". 479 The present case is, of course, entirely different from General Steel. It may be recalled that the defendant in that case sought an order that the plaintiff's statement of claim be struck out on the basis that it failed to disclose a reasonable cause of action and that the proceeding be dismissed. The outcome turned on the plaintiff's pleading, which, relevantly, alleged that the contract between supplier and the defendant stipulated the use of a coupling that necessarily infringed the plaintiff's patent. In a case of a pleading summons of this kind, it was immaterial whether such would be held to be the fact at trial. 480 This case is also different from Stack in which the parties first made submissions, including a concession, directed, first, to a letter that in terms stated that the respondent authorised the supplier "for the purposes of s 163 to manufacture and supply" the infringing water meters; and secondly made submissions specifically on whether the relevant tender documents amounted to a written authorisation. In concluding that they did, Cooper J noted, at 90, that: (1) a sample given by the supplier to the respondent Council formed the agreed design of the assembly of the water meter under the contract; (2) there was no dispute that the sample and the water meters ultimately supplied infringed the patent in suit; and (3) there was no dispute that the contract required the supply of the water meters in accordance with the sample. 481 In this case, save for Axent's reliance on cl 19.2, neither party made any submissions specifically about the contract between Hi-Lux and the Commissioner of Highways. Hi-Lux's submission was that a document evidencing contractual supply was sufficient to amount to an authorisation. As indicated above, this proposition was overly broad. Hi-Lux did not submit that, on the assumption that Axent succeeded in establishing infringement of the claims of the Patent in suit, the contract between it and the Commissioner of Highways required that it supply a variable speed limit sign that also necessarily infringed. On the contrary, Hi-Lux made no submissions about the articles that it was required to supply under this contract. There was also no evidence about these articles. 482 I accept that it is a possibility that, on the assumption that Axent had made out its infringement case, the contract between the Commissioner of Highways and Hi-Lux may have required a product that infringed the Patent in suit and, if so, the relevant infringing acts may well have been authorised for the purposes of s 163. In the circumstances of this case, in the absence of submissions or evidence to this effect, I cannot be satisfied to the requisite standard that, on the assumption that Axent should have succeeded in its infringement claims, the contract with the Commissioner required Hi-Lux to supply goods that necessarily infringed the patent in suit. 483 Accordingly, Hi-Lux's defence under s 163 of the Patents Act could not succeed.

Defence of innocent infringement-- Compusign 484 If Compusign established to the satisfaction of the court that, at the date of any infringement, neither of the Compusign parties was aware, and had no reason to believe, that a patent existed for the invention, then, under s 123 of the Patents Act, the court may refuse to award damages, or to make an order for an account of profits against them. Section 123 of the Patents Act is in the following terms: 123 Innocent infringement (1) A court may refuse to award damages, or to make an order for an account of profits, in respect of an infringement of a patent if the defendant satisfies the court that, at the date of the infringement, the defendant was not aware, and had no reason to believe, that a patent for the invention existed. (2) If patented products, marked so as to indicate that they are patented in Australia, were sold or used in the patent area to a substantial extent before the date of the infringement, the defendant is to be taken to have been aware of the existence of the patent unless the contrary is established. (3) Nothing in this section affects a court's power to grant relief by way of an injunction. 485 It will be apparent that s 123 is not, strictly speaking, a defence to a claim of infringement. Indeed, in cases where the court has heard and determined issues of liability separately from and in advance of issues of the quantum of any pecuniary relief, the court has sometimes considered the issues to which s 123 gives rise after the issues of liability have been determined: see, for example, Unilin Beeher BV v Huili Building Materials Pty Ltd (No 2) [2007] FCA 1615; 74 IPR 345, where Allsop J declined to make a finding of innocent infringement. The practice is not uniform. The court has also considered the application of s 123 at the liability stage prior to considering issues of quantum: see, for example, Australian Mud Company Pty Ltd v Coretell Pty Ltd (No 4) [2015] FCA 1372. 486 In substance, the Compusign respondents contended in opening and closing submissions that, if the court finds that either of them infringed the Patent, then prior to receipt of Axent's letter of demand dated 16 September 2016 (enclosing a copy of the Patent), neither was aware, and had no reason to believe, that a patent for the invention existed, and that Axent should be disentitled to relief for any infringement. The basis for this contention is set out in [19] of Compusign's amended defence: see also Compusign's defence, at [20] and Compusign's position statement on infringement, at [14]. 487 Axent did not address the issue of innocent infringement in opening or closing submissions. It was not addressed in Axent's reply or amended position statement on infringement. There is no reference to this issue in Axent's submissions as to the respondents' positive defences. Axent did not contend that the s 123 issue should not be entertained and determined. The issue was simply not mentioned in the agreed infringement issues document. 488 The issue of s 123 was, however, clearly raised by the Compusign respondents, and it falls for consideration. Axent was represented by solicitor and counsel. Both were thoroughly conversant with the proceedings, having been involved in the conduct of them since well before the substantive hearing. Axent's lawyers were attentive to detail, and it must be assumed that, for Axent's own forensic reasons, Axent determined not to address this part of Compusign's defence. 489 It may be accepted that the Compusign respondents bear the onus of showing that, at the date of infringement, they were not aware and did not have reason to believe that a patent for the invention existed: see, for example, Australian Mud Company at [420] and B. Braun Melsungen AG v Multigate Medical Devices Pty Ltd [2014] FCA 1110 at [74]. 490 The Patent in suit was published on 22 April 2004. Mr He's evidence was that he was not aware of any patent in relation to the display of a variable speed limit sign prior to receiving a letter of demand from Axent's solicitor dated 16 September 2016. Mr Riquelme gave evidence to like effect. Mr He said that he was "surprised to learn that there was any such patent, including because it was not referenced in any of the roads authorities' specifications". Mr Riquelme also said that he "had not expected that a patent would exist in relation to the requirements of the VicRoads specification, RTA Specification with no mention of that patent in the specification". I accept their evidence in this regard. I find that neither Mr He nor Mr Riquelme was aware that there was a patent for the invention in existence prior to receipt of the 2016 letter of demand. If they were not aware, then it should be inferred that no one else at Compusign had any such awareness prior to the 2016 letter of demand. Having regard to the matters discussed below, I also accept that they had no reason to believe that a patent for the invention existed prior to that time. 491 The evidence established that Mr Fontaine, with Mr Cestnik, had demonstrated Axent's variable speed limit sign with a partly flashing annulus to Mr Bean and another VicRoads representative in or about September 2000. (It is unnecessary to determine whether or not this other representative was Mr Priest, who himself had no recollection of such a meeting.) For present purposes, it may be accepted that the demonstration was at that time confidential to Axent's representatives and VicRoads. 492 Mr Bean decided to include the variable speed limit sign with a partly flashing annulus as a requirement in the September 2001 specification at about the time VicRoads was seeking expressions of interest. When VicRoads provided the tender documents for a variable speed limit system on the Western Ring Road to Mr Fontaine and others who had expressed an interest in the tender, the tender documents included the September 2001 specification. This specification required a variable speed limit sign in which the inner part of the red annulus was capable of flashing on and off. It may be recalled that it was Axent's case that this feature gave rise to the benefit of the invention. 493 It was plainly the case, as Mr Fontaine accepted, that he knew at the time of the tender for the Western Ring Road Project that the other tendering parties would receive a copy of the September 2001 specification. They would therefore be informed of the need to supply a variable speed limit sign with a partly flashing annulus. Mr Fontaine did not complain to VicRoads about this. Nor did he ask VicRoads to remove the requirement from the September 2001 specification. In fact, he was not "unhappy" the requirement was included. Mr Bean saw no difficulty with including the partly flashing annulus requirement in the September 2001 specification without asking Mr Fontaine's permission. There was no indication in September 2001 that Mr Fontaine proposed to apply for a patent with respect to a variable speed limit sign with a partly flashing annulus. 494 The September 2001 specification was not specific to the Western Ring Road Project. VicRoads required every supplier of a variable speed limit sign to which the September 2001 specification applied to meet the partly flashing annulus requirement. The specification was also likely to form the basis of applications for type approval made by other companies, because, as Mr Fontaine and Mr Zammit said, it was commercially advantageous to have type approval. Gaining type approval involved the relevant supplier demonstrating that its product met the relevant VicRoads specification. Indeed, Hi-Lux submitted a variable speed limit sign to VicRoads for type approval in October 2003. There was, however, nothing in the September 2001 specification to put a reader on notice of the existence of a relevant patent, for example, a statement indicating that a patent application had been made or granted. 495 It may be recalled that the RTA Specification to which Mr Riquelme referred was the February 2001 "DCM Specification RVSLS" for the Cross City Tunnel Project calling for a flashing annulus, and that Compusign won the contract for the project in late 2003 or early 2004. There was also nothing in the RTA Specification to put a reader on notice of any relevant patent. 496 As I have already said, it seemed to me that Mr Fontaine's evidence to the effect that "there wasn't anybody who didn't know about the patent" was entirely self-serving. Aside from publication of the Patent, there was no evidence that the existence of the Patent was communicated, or likely to be communicated, by any means to anyone outside VicRoads, and there was scant evidence of what Mr Fontaine relevantly said to any VicRoads representatives. Even Mr Bean was unsure when he became aware of the Patent. The most Mr Bean could say was that it was well after the Western Ring Road Project had been completed. 497 Mr Fontaine's evidence was that he raised the patent application with a VicRoads representative (Mr Zabrieszach) in about September 2003 and subsequently spoke "about the patent" with him and other VicRoads people. His evidence was both general and vague, and I would attach very little weight to it. In particular, there was no evidence about the substance of any relevant conversation. Nor was there any evidence to indicate that any VicRoads representative had referred directly, or indirectly, to the existence of the Patent in any communication with any potential suppliers of the signs to which the Patent might relate. 498 Significantly, the requirement of a partially flashing annulus was included in the September 2001 specification and the RTA Specification; each document emanated from a relevant road authority; and each stated that authority's particular requirements. In the absence of contrary information, this would have indicated to a potential supplier of a sign to which the specified requirement related that, providing the supplier had type approval, the supplier could tender for the supply of a sign that met the specification. Had this not been the case, a supplier might reasonably have expected that the road authority would refer to the existence of some other constraint and, particularly in the case of an Australian patent, have drawn the existence of that patent to the potential supplier's notice. 499 It is also worth recalling at this point that Mr Fontaine was well aware of the relevant annulus requirement in the September 2001 specification, and would have known that Axent's competitors would need to meet that requirement in any tenders for the supply of products to which the specification applied. Equally, he would have been aware that such competitors would be likely to seek type approval for any variable speed limit sign that they had in mind to offer to supply in making any tender. 500 I was not referred to any judicial discussion of the expression "had no reason to believe" in s 123(1) of the Patents Act. With respect to the affirmative expression "reason to believe" in s 117(2)(b) of the Patents Act, French J said in Collins v Northern Territory [2007] FCAFC 152; 243 ALR 483 at [64]: The words "reason to believe" in s 117(2)(b) have long standing statutory antecedents. They and similar formulae frequently condition the exercise of statutory powers and require at least, an objective basis for the relevant belief and, according to context, require actual belief: WA Pines Pty Ltd v Bannerman (1980) 30 ALR 559 at 571 and authorities there cited. On the other hand the formula may be taken, according to its statutory context, to convey a requirement for an objective basis for belief without the necessity of actual belief: eg George v Rockett (1990) 170 CLR 104 at 112. I note that Collins was the subject of a successful appeal, although this does not affect the above statement: see Northern Territory v Collins [2008] HCA 49; 235 CLR 619. 501 Broadly speaking, the same kind of approach is evident with respect to s 115(3) of the Copyright Act 1968 (Cth), which is relevantly analogous to s 123(1) of the Patents Act. Section 115(3) provides, in effect, that where a copyright infringement has been established, the plaintiff is not entitled to damages but is entitled to an account of profits if it is also established that at the time of the infringement the defendant was "not aware, and had no reasonable grounds for suspecting" that the act was in fact an infringement of copyright. In Milwell Pty Ltd v Olympic Amusements Pty Ltd [1999] FCA 63; 85 FCR 436 at [52], the Full Court held that to "obtain the protection of s 115(3) [of the Copyright Act] a defendant must establish: (i) an active subjective lack of awareness that the act constituting the infringement was an infringement of copyright, and (ii) that, objectively considered, he or she had no reasonable grounds for suspecting that the act constituted an infringement". Milwell was applied by Davies J in The Dempsey Group Pty Ltd v Spotlight Pty Ltd [2018] FCA 2016; 138 IPR 190, where her Honour held (at [142]) that "objectively assessed, [the defendant] had no reasonable grounds for suspecting that the sale of the [defendant]'s products in Australia was an infringement of Dempsey Group's copyright". 502 In Lancer Boss Ltd v Henley Forklift Co Ltd [1975] RPC 307 at 317 Graham J discussed s 59(1) of the Patents Act 1949 (UK) (a predecessor provision to s 62(1) of the Patents Act 1977 (UK)), which is also analogous to s 123(1) of the Australian Patents Act: see also J. Liddicoat, "Re-evaluating innocent infringement in Australia: Patent numbers and virtual marking" (2014) 25 Australian Intellectual Property Journal 18 at 25. This provision provided (in part) that "damages shall not be awarded against a defendant who proves that at the date of the infringement he was not aware, and had no reasonable grounds for supposing, that the patent existed" (emphasis added). In relation to "had no reasonable ground for suspecting its existence", Graham J relevantly said (at 317): [I]f the infringer had no actual knowledge, the existence of reasonable grounds must be judged in the light of all the circumstances at the time of the infringement. A most important factor is obviously whether or not the plaintiffs' goods are marked with the patent number and whether they have been sold and exhibited on a large scale so that the public interested in such goods might be expected to have seen the warning on them. They have been so made, sold, marked and exhibited here. Another important factor to my mind, which is also present in this case, is whether or not the defendant has actually copied the plaintiffs' goods. As a matter of common sense, if a defendant copies the goods of the plaintiff he has only himself to blame if he does not ascertain by making all reasonable and proper enquiries whether he is free to do so or not before he starts manufacture. None of the circumstances mentioned in this passage are to be found in this case. 503 Furthermore, the present case is clearly distinguishable on its facts from a number of previous Australian cases in which s 123(1) has been invoked. For example, in Australian Mud Company, the respondents had been promptly informed of the existence of the patents at the time they were granted, as well as of the earlier patent applications, and were therefore held (at [420]) to be aware that a patent existed. In Unilin Beeher BV v Huili, the evidence (at [80]) disclosed that since the grant of the patent, the applicant's product had been marked with "patented technology", and relevant promotional material carried the Australian patent number. The respondents had, moreover, adduced no direct evidence establishing they were not aware of the applicant's patent rights before the receipt of a letter of demand: see Unilin Beeher BV v Huili at [81]. It was also held that the respondents' conduct in the case was a disentitling consideration, with Allsop J stating (at [83]) that: [G]iven the state of the documentation provided by the respondents … to the extent that there is a discretion within s 123 to deal with innocent infringement and to reduce the account of profits by the reason thereby, I am not able to be confident that the respondents have so approached the conduct of this case that they should be entitled to any discount under s 123 … 504 In H.Lundbeck A/S v Sandoz Pty Ltd [2018] FCA 1797; 137 IPR 408, the court held (at [345]) that the respondent could not have been aware of the existence of the patent, but would not exercise its discretion under s 123 in the respondent's favour on the basis the evidence disclosed that the respondent had made a calculated decision to launch its products at risk, knowing that the applicant had applied for an extension of time and term for its expired patent (at [346]). 505 Equally, this case is unlike Braun Melsungen where a concession based upon agreed facts attracted the operation of s 123, with the consequence that there was no award of damages, or order for an account of profits: Braun Melsungen at [74]. 506 As indicated above, I find that, from the publication of the Patent until Compusign's receipt of Axent's letter of demand in September 2016, the Compusign parties were not aware that a patent for the invention existed. Further, I am satisfied that these parties had no reason to believe that a patent for the invention existed prior to the receipt of that letter of demand. It is also worth noting that from December 2010 the impugned signs had been supplied or offered for supply for some time by suppliers other than Axent, without the institution of any patent infringement proceedings. Had a supplier considered the matter, this further circumstance would have confirmed the apparent fact that there was no patent for the invention in existence. 507 Since the conditions giving rise to the discretion conferred on the court by s 123 of the Patents Act have been satisfied, the Court may refuse to award damages or to make an order for an account of profits pursuant to that provision. As already stated, the court may also decide not to exercise its discretion in the Compusign parties' favour. 508 As already indicated, Axent has not advanced any reason why I should decide not to exercise the discretion in favour of the Compusign parties once satisfied that the discretion arises. If it were necessary to do so, on the basis of what is presently before the Court, I would be disposed (at least provisionally: see below) to exercise the discretion in favour of the Compusign parties and, in so doing refuse to make an award of damages or an order for an account of profits in respect of any infringement prior to the date of the receipt of the letter of demand dated 16 September 2016. This date is presumed to be 7 working days after the letter was sent. see s 160 of the Evidence Act. 509 If something had turned on the point, however, I would also have been disposed to invite the parties to make written submissions on whether Axent should be given a specific opportunity to be heard on whether the discretion in s 123(1) should be exercised in the Compusign parties' favour. As the balance of these reasons discloses, however, there is nothing to be gained from taking this further step.

Lapse of patent - Compusign and Hi-Lux 510 As already indicated at [19] above, Axent did not pay the renewal fees for the Patent by 6 October 2015, as required if the Patent was not to cease. Nor did it pay the renewal fees by 6 April 2016 (that is, within the 6 month grace period allowed under reg 13.6(2) of the Patents Regulations). 511 On 20 April 2016 Axent made an application for an extension of time under s 223 of the Patents Act. This application was granted on 1 September 2016, on which day the Australian Patent Office applied the renewal fees paid by Axent to the Patent: see statement of agreed facts as to the lapse of the patent. Publication of the fact of the grant of Axent's application under s 223 occurred on 15 September 2016. The Patent therefore ceased to be registered for a period for the non-payment of fees. 512 I have already referred to the respondents' amended pleading in which they alleged that Axent was unable to bring infringement proceedings in respect of an alleged infringement in the period in which the Patent lapsed for non-payment of fees: see [7] and [9] above. This was said to be a period from 7 October 2015 until either 1 September 2016 (see [4] of Compusign's Defence) or 15 September 2016 (see [6] of Compusign's amended Defence). Hi-Lux's pleadings do not propose a specific end date: see [33] of Hi-Lux's amended Defence. 513 The parties proceeded on the basis that a patent ceases if the patentee does not pay a renewal fee within the "prescribed period" and if non-payment results in the patent ceasing, infringement proceedings cannot be brought in respect of any allegedly infringing act within the period the patent ceased: see ss 143(a) and 223(10) of the Patents Act. Section 143(a) and s 223(10) relevantly provide: 143 Ceasing of patents A standard patent ceases if the patentee: (a) does not pay a renewal fee for the patent within the prescribed period; … 223 Extensions of time ... (10) Infringement proceedings cannot be brought in respect of an infringement committed: (a) between the day on which the patent application lapses and the day on which it is restored; or (b) between the day on which the patent ceases and the day on which it is restored. … 514 The respondents submitted in closing submissions that the period during which infringement cannot be asserted was from 7 October 2015 to 1 September 2016, the former date being the day after that on which the renewal fee for the Patent was due and the latter date being the day on which an application to extend the time to pay the renewal fee was granted. None of the respondents sought to support the 15 September date: see [512] above. 515 Axent submitted that the relevant period began on 5 April 2016 (that is, approximately 6 months after 7 October 2015) and concluded on 1 September 2016. 516 Whether the relevant period for the purposes of s 223(10) commenced on 7 October 2015 or 5 April 2016 turns on the construction of reg 13.6 of the Patents Regulations, read with s 143(a) of the Patents Act. Regulation 13.6 provides: 13.6 Time for payment of renewal fee for patent (1) For paragraphs 143(a) and 143A(d) of the Act: (a) a renewal fee for a patent is payable for a relevant anniversary at the last moment of the anniversary; and (b) the period in which the renewal fee must be paid is the period ending at the last moment of the anniversary. … (2) However, if the period mentioned in paragraph (1)(b) is not taken to be extended under subregulation (1A), and the renewal fee is paid within 6 months after the end of the relevant anniversary (6 month period): (a) the period mentioned in paragraph (1)(b) is taken to be extended until the fee is paid; and … … 517 Axent contended that a patent which lapses by reason of non-payment of the renewal fee always lapses after the "6 month grace period", even if the fee is not paid within the 6 month period. The respondents submitted that the period is only "taken to be" extended if the condition of the renewal fee being paid within the 6 month grace period is satisfied. 518 The respondents' submission should be accepted, for the following reasons. 519 First, the respondents' construction is consistent with the approach of the Full Court in Miles v Commissioner of Patents [2014] FCAFC 109; 225 FCR 67. That is, reg 13.6(2) only affects the day on which a patent lapses if the renewal fee is paid within 6 months of the relevant anniversary. The Full Court in Miles considered the interaction of s 142(2)(d) of the Patents Act (regarding the lapse of a standard patent on the failure to pay a continuation fee) and regs 13.3(1) and (1A) of the Patents Regulations. These regulations made provision for a six-month grace period for the payment of the "continuation fee" for a standard patent in terms that mirror reg 13.6(1) and (2) set out above. According to reg 13.3(1A), "if the continuation fee is paid within 6 months after the end of the relevant anniversary (6 month period): (a) the period mentioned in paragraph (1)(b) is taken to be extended until the fee is paid…". 520 In construing regs 13.3(1) and (1A), the Full Court said (at [12]-[14]): Regulation 13.3(1A) provides nothing more than a grace period for the applicant to pay the continuation fee. It is still part of the period prescribed. Upon payment of the continuation fee, the period is set and determined provided it is paid within the six month period. In this case, the patent application did not lapse at the end of the six month grace period, or at all. It was refused at a time when it was still on foot. It was on foot on 1 November 2012 because on that date the period prescribed for the purposes of paragraph 142(2)(d) of the Act, within which the appellant was to pay a continuation fee, had not yet expired. To reiterate, that period was prescribed by regs 13.3(1) and (1A) in combination. It is important to recall that in this case, payment of the continuation fee was made on 28 March 2013, within the six month grace period. The period prescribed is taken to be extended only until the continuation fee is paid (see reg 13.3(1A)(a)). If the application had not been refused, and if the period of grace were to have come to an end and the (higher prescribed) continuation fee had still not been paid, then the application would have lapsed on the anniversary date, not on the expiry of the grace period of six months. (Emphasis added) It is important to note the Court's statement that if the fee were not paid, the application would be taken to have lapsed on the anniversary date, not on the expiry of the grace period of six months: see also Global Blue SA v Visa USA Inc [2018] APO 86 at [19]. 521 I interpolate here that the parties referred me to the following three cases, none of which assists to any real extent, as I shall briefly explain. In their closing submissions, the respondents referred to Re Application by Foldi (1997) 38 IPR 131 and Re Application by Beckswift Ltd (1997) 39 IPR 666. Each case concerned an applications for an extension of time to pay patent renewal fees. In Foldi, a renewal fee had not been paid within the six-month grace period allowed by reg 13.6(3). After the patent was advertised as having ceased, the patentees applied for an extension of time to pay the renewal fee pursuant to s 223(2) of the Patents Act. In the course of his analysis, the acting Commissioner of Patents indicated (at 136) that the patent ceased on the day the renewal fee was due, not on a date six months later. There was no discussion of this statement, and it must be borne in mind that the issue falling for determination in this case is whether an extension of time period should be counted to include the six months allowed by reg 13.6(2). As already indicated, the respondents also referred to Beckswift at 667, where the Deputy Commissioner of Patents referred to a statutory declaration by the patent attorney responsible for the affairs of the patentee. It was this declaration that noted that the patent had ceased on the anniversary date. The point is not dealt with elsewhere in the Deputy Commissioner's reasons. 522 In closing submissions, Axent submitted that "it was held to be the case" in Lazer Safe Pty Ltd v Commissioner of Patents [2001] AATA 967 that the patent ceases at the end of the six month grace period. The statement on which Axent relied in the Deputy President reasons was, however, merely part of a recitation of the background facts. The relevant statement is not accompanied by any analysis or reasoning and, accordingly, is of little assistance. 523 Having regard to Miles and the text of reg 13.6(2), however, it seems to me that reg 13.6(2) only affects the day on which a patent lapses if the renewal fee is paid within six months of the relevant anniversary. Regulation 13.6 sets out, for the purposes of s 143(a) of the Patents Act, the "prescribed period" within which the renewal fee for a patent must be paid for the patent not to cease. The starting point is that the prescribed period ends on the last moment of the relevant anniversary day for the patent: reg 13.6(1). If the period is not extended under reg 13.6(1A) (as here), the prescribed period may end up to six months after the end, depending on the day on which the renewal fee is paid. If the renewal fee is paid within the six month period for which reg 13.6(2) provides, the patent will never have ceased for the purposes of s 143(a) because the period in reg 13.6(1)(b) is "taken to be extended until the fee is paid". 524 In this case, the prescribed period was to end on 7 October 2015. Had Axent paid the renewal fee at any time before 5 April 2016, the prescribed period would have been extended by reg 13.6(2)(a) to end on the day Axent paid the fee. Axent did not pay the renewal fee before 5 April 2016, however, and in consequence reg 13.6(2)(a) had no application. The prescribed period ended on 7 October 2015 being the point after the last moment of the anniversary date for the Patent. It follows that by the operation of s 143(a) of the Patents Act, the Patent ceased on that day. The Patent was restored on 1 September 2016, when the extension of time for the renewal fee application was granted.

Defence of prior use 525 The respondents, Hi-Lux and Compusign Australia, relied on s 119(1) of the Patents Act by way of defence to Axent's infringement case: see, for example, Addendum to respondents' position statements on non-infringement. There was no equivalent provision in the Patents Act 1952. 526 Section 119, as in force at the relevant time, provided: 119 Infringement exemptions: prior use (1) Where, immediately before the priority date of a claim, a person: (a) was making a product or using a process claimed in that claim; or (b) had taken definite steps (whether by way of contract or otherwise) to make that product or use that process; the person may, despite the grant of a patent for the product or process so claimed, make the product, or use the process, (or continue to do so) in the patent area, without infringing the patent. (2) Subject to subsection (3), subsection (1) does not apply if the person derived the subject-matter of the invention concerned from the patentee or the patentee's predecessor in title in the invention. (3) Subsection (2) does not prevent subsection (1) from applying if: (a) the person derived the subject-matter of the invention concerned from information that was made publicly available by or with the consent of the patentee, or the predecessor in title of the patentee; and (b) the making of that information publicly available was through any publication or use of the invention in the prescribed circumstances mentioned in paragraph 24(1)(a). (4) Subsection (1) does not apply if the person, before the relevant priority date, had stopped making the product or using the process (other than temporarily), or had abandoned (other than temporarily) the steps mentioned in paragraph (1)(b). (This was the form of s 119 following the enactment of the Patents Amendment Act 2001 (Cth), which replaced s 119(2) with ss 119(2)-(4) above, but did not amend s 119(1).) 527 It appears that the purpose of s 119 was to embody "in a restricted fashion" the principle that a person cannot be prevented from continuing to do what they were doing prior to the grant of the patent: see Jupiters at [135] and Bodkin at p 558, both citing Bristol-Myers Co v Beecham Group Ltd [1974] AC 646; 2 WLR 79 at 681 (Lord Diplock). 528 As the parties noted, there is limited discussion about the operation of s 119 in the authorities. In closing submissions, the parties focussed on Welcome Real-Time SA v Catuity Inc [2001] FCA 445; 113 FCR 110, a case in which the respondents to an infringement action relied on s 119(1)(b) by way of defence, submitting that the design of the alleged infringing system was "substantially completed" by the priority date. The form of s 119 relevant in that case was that in force immediately prior to the enactment of the Amendment Act 2001. Subsection 119(1) was, however, relevantly the same as in this case. 529 Citing CCOM Pty Ltd v Jiejing Pty Ltd (1993) 27 IPR 577 at 627, Heerey J said, and it is not contested, that the product or process referred to in s 119(1) is the product or process claimed in the claim of the patent. His Honour added, at [93]-[94]: For s 119 to be applicable, it must be possible to say that immediately before the priority date the product or process of the patent was being made or used by the infringer or he or she had taken definite steps to make or use that particular product or that particular process. The concept of which s 119 speaks may be illustrated by the following example. Assume a patented product consisting of components A, B and C. Immediately before the priority date an infringer: has drawings depicting the product; has actually made A; has on his premises the raw materials for component B; and has ordered the raw materials for component C. It can then be said that the infringer had taken definite steps to make that product. Conversely, it would not be sufficient that immediately before the priority date, the infringer has made A, has received the raw materials for B but is investigating whether C, D or E would be the preferable final component. And the infringer would be in no better position if, after the priority date, he in fact decided that C was preferable and then proceeded to manufacture a product consisting of A, B and C. 530 The parties in Welcome Real-Time referred the Court to s 64 of the Patents Act 1977 (UK), which at the relevant time provided: Where a patent is granted for an in[v]ention, a person who in the United Kingdom before the priority date of the invention (a) does in good faith an act which would constitute an infringement of the patent if it were in force, or (b) makes in good faith effective and serious preparations to do such an act, has the right to continue to do the act or, as the case may be, to do the act, notwithstanding the grant of the patent, but this right does not extend to granting a licence to another person to do the act. 531 Justice Heerey summarised the effect of the authorities in the United Kingdom regarding "effective and serious preparations" in s 64(b), stating, at [96]-[97]: In Helitune Ltd v Stewart Hughes Ltd [1991] FSR 171 the production of prototypes before the priority date was held not enough to show effective and serious preparations. In Lubrizol Corporation v Esso Petroleum Ltd [1998] RPC 727 the patent related to a lubricating oil. The first batch of the defendants' product was imported into the United Kingdom before the priority date and the defendants had given consideration to appropriate pricing. The defendants had also contemplated manufacturing the product in the United Kingdom. It was held that the defendants had not undertaken effective and serious preparations. Aldous J said (at 770) that the preparations must be "so advanced as to be about to result in the infringing act being done". Thus the English courts have adopted a strict interpretation of s 64, a provision which, on its face, seems more favourable to infringers than s 119. Assuming for the moment that doing an act which would constitute infringement in the UK Act can be equated to making a product or using a process claimed in the claim of the patent in the Australian Act … in the normal course of events making preparations for the making of a product would be something that occurs prior to steps in the actual making. (Emphasis added) As will be seen below, the last proposition in this passage is significant for the s 119 defence advanced by Hi-Lux and Compusign Australia. 532 Noting that the onus was on the respondents, Heerey J was not satisfied by the evidence that the respondents had taken "definite steps" for the purpose of s 119(1)(b) to use their system before the priority date. His Honour held, at [100], that the evidence established the respondents were only engaged in the ongoing development of the infringing system at the priority date, and the respondents' s 119(1) defence failed for this reason. 533 In Welcome Real-Time, Heerey J was careful not to give the impression that the interpretation given to s 64 in the UK cases would be equally applicable to the proper construction of s 119(1). As already noted, his Honour observed that s 64 of the Patents Act 1977 (UK) appeared "more favourable to infringers than s 119". His Honour went on to observe, at [101], that s 119 may have "quite limited effect" insofar as it may not cover acts of exploitation such as sale or importation of a product. His Honour continued: As Ann Monotti points out in her article "Balancing the Rights of the Patentee and Prior User of an Invention; The Australian Experience" (1997) 7 EIPR 351, s 119 in its terms appears to limit its protection to the act of making a product or using a process and does not extend to other acts which would constitute exploitation, and hence infringement, such as sale or importation of a product: see s 13(1) and the definition of "exploit" in Sch 1. 534 This observation is also made by Bodkin at p 559: The difference in wording of the Australian and United Kingdom provisions is of interest here: where the original form of the Australian statute referred only to "making a product or using a process", the United Kingdom section has "does in good faith an act which would constitute an infringement of the patent if it were in force" which would seem clearly to include sale of products, among other possible actions. 535 In Welcome Real-Time, Heerey J concluded (at [103]) that: A possible rationale is that s 119 applies to all prior making or using, whether public or secret. The section may have value for an infringer who has engaged in a public making or using but does not wish to engage in the risk and expense of a revocation suit. It seems a reasonable reading of the section that such an infringer obtains relatively clear cut protection over a limited area leaving the patentee otherwise free to exploit the patent. Of course this would not prevent third parties relying on such making or using in their revocation claims. But the whole purpose of s 119 (and its UK counterpart) is to confer a personal right on somebody who would otherwise be an infringer rather than to interfere with the validity of the patent. 536 The current version of s 119, which was largely enacted by the Intellectual Property Laws Amendment Act 2006 (Cth), resolves the difficulty arising from the expression "make that product, or use the process" in s 119(1)(b), by extending its application to a person who "had taken definite steps … to exploit the product, method or process" and defining the word "exploit" in s 119(5) in much the same terms as the definition of "exploit" in Sch 1 of the Patents Act. 537 The explanatory memorandum to the Bill which enacted the Amendment Act 2006 stated in its outline that: The Bill amends section 119 of the Patents Act to clarify that the prior user's rights include exploiting the product, method or process… It is clear from the explanatory memorandum that a purpose of the amendments was to resolve the issue as to whether prior use covered only the manufacture of a product or use of a process, or extended to other forms of exploitation. The explanatory memorandum also observed that: Also section 119 limits the use to making a product or using a process and it is not clear whether this extends to other aspects such as selling the product. The right would be of little value if the end product could not be sold and thereby provide a return on the investment in the R&D used to create it. 538 The explanatory memorandum, in [126], confirmed that "[t]he Government further considered that the limitation of the prior use to making a product or using a process was too narrow, and instead considered that the prior use should encompass acts which would constitute an infringement of the patent". Subsection 119(1) was amended by the Amendment Act 2006 to reflect this conclusion. 539 The respondents submitted, in their closing written submissions, that each of Hi-Lux and Compusign Australia had taken "definite steps" to make the relevant products before the priority date of the claims, as each had offered to supply a sign for use as part of the Western Ring Road project, and continued to include such a product in its product range. 540 In closing submissions at the hearing, the respondents' counsel submitted that the proper construction of s 119 is broader than that which Axent advanced, and sought to provide a statutory framework for the common law principle to which I have already referred, that a patent cannot deprive a person of the right to do what they were doing before the patent was applied for. The respondents' counsel submitted, referencing s 15AA of the Acts Interpretation Act 1901 (Cth), that, if s 119 were construed as Axent proposed, "the section provides no benefit at all", as it would not cover the acts (e.g., sale) that nearly always followed the making of a product. Further, the respondents' counsel submitted, Heerey J's comments in Welcome Real-Time were obiter dicta and, as such, should be given limited weight. I note here that the respondents did not expressly submit that the presently applicable version of s 119 should be construed as broadly as the current version of s 119, and that the presently relevant version of s 119 applied, for example, to their offers to make the products. 541 It is unnecessary to refer to the respondents' other submissions on the application of s 119, because, for the reasons outlined below, this defence fails because Hi-Lux and Compusign Australia have failed to show that they satisfy the requirements of s 119(1), as it stood at the relevant time. 542 Axent submitted the applicable version of s 119 should be read according to its terms and, in contrast to the current version of that provision was "very limited in scope, both in terms of its threshold requirements and the protection it affords". Relying on Heerey J's comments in Welcome Real-Time, Axent submitted neither Hi-Lux nor Compusign Australia had taken the requisite "definite steps" to make the product and, in any case, prior use would not apply to "the sale, supply and repair of various signage", but only to the "making of the product": see s 119(1)(a). Axent also submitted that the purpose of the defence was to cover inventors who have been doing independently that which the patent covers and should not apply to the respondents' conduct because, in substance, their products were derived from Axent's invention. 543 It is unnecessary to refer further to Axent's submissions in view of my conclusion about s 119(1). 544 I turn first to consider whether the expressions "making a product or using a process" in s 119(1)(a) and "make that product, or use the process" in s 119(1)(b) in the version relevant to this proceeding should be construed to cover the sale and supply of the product or process. I interpolate here that although the argument tended to focus on s 119(1)(b), the interpretation given to the expression in s 119(1)(b) would also apply to the related expression in s 119(1)(a). It is also convenient to note here that to the extent that some of Heerey J's statements in Welcome Real-Time were obiter dictum, I have nonetheless found these statements to be persuasive, and would not differ with his Honour with respect to them. 545 As the explanatory memorandum to the Bill that became the Amendment Act 2006 confirms there is some force in the respondents' contention that s 119(1) has limited benefit if confined to the manufacture of a product and use of a process, without application to sale and supply; and, as already indicated, the respondents referred at this point of their argument to s 15AA of the Acts Interpretation Act to support their contention that s 119(1) did in fact embrace sale and supply. It does not seem to me, however, that s 15AA can assist here. 546 As a Full Court of this Court said in R v L (1994) 49 FCR 534 at 538: The requirement of s 15AA(1) that one construction be preferred to another can have meaning only where two constructions are otherwise open, and s 15AA(1) is not a warrant for redrafting legislation nearer to an assumed desire of the legislature … Further, as Dennis Pearce, in Statutory Interpretation in Australia (9th ed, 2019) at [2.20], states: Section 15AA and equivalent provisions do not permit the courts to ignore the actual words of a statute. 547 There is, it seems to me, only one construction open regarding the expression "making a product or using a process" in s 119(1)(a) and that prevents this provision applying to the sale or supply of a product, as the respondents urged. Similarly, the expression "to make that product or use that process" in s 119(1)(b) bears only one construction and cannot be extended to cover to sell and to supply. The language of the provision does not admit of another interpretation: compare Treasurer of Victoria v Tabcorp Holdings Ltd [2014] VSCA 143 at [6]-[7]. Apart from the fact that it might be thought, as a matter of policy, the provision should have covered acts that would ordinarily follow the making of a product, it cannot, I think, be said that the object of the provision is entirely defeated unless it is extended to sale and supply: see, for example, Welcome Real-Time, at [103]. Further, the extension the respondents seek involves much more than the correction of mere drafting errors. The respondents' submission invites the court impermissibly to add words that travel well beyond the statutory text: compare Taylor v The Owners - Strata Plan No 11564 [2014] HCA 9; 253 CLR 531 at [37]-[40]. The plain words of the provision, "making a product or using a process" and "make that product or use that process", define clearly and unambiguously the boundaries of what may be done lawfully by an infringer, and cannot be expanded as the respondents argue. To construe the provision in accordance with the respondents' submissions involves too great a departure from the statutory text to be a permissible construction. 548 In referring to the explanatory memorandum to the Bill that resulted in the Amendment Act 2006 to support their position, the respondents invited the Court to discern from that memorandum the purpose of the earlier version of s 119 applicable in these proceedings. Even if this analytical approach were open, the relevant explanatory memorandum would not support the respondents' position. This explanatory memorandum did not state that the purpose of s 119 had always been to provide an exemption with respect to the forms of exploitation set out in the proposed s 119(5). To the contrary, it noted the proposed Amendment Act 2006 sought to resolve issues that had arisen under the earlier form of the provision. 549 The evidence on which Hi-Lux and Compusign Australia relied to make out a defence under s 119 was relatively limited. As mentioned earlier, Mr Sozio gave evidence that Hi-Lux provided an expression of interest dated 18 April 2001 as part of a bid to provide variable speed limit signs for the Western Ring Road Project, although Hi-Lux had subsequently not tendered directly for the Project itself. Mr Sozio's evidence was not seriously challenged in this regard, and I accept his evidence. 550 There is some slight evidence that Mr He reviewed the technical specifications relating to the Western Ring Road Project and, together with another Compusign Australia employee, considered what would be required to supply the signs to meet the specification. Mr He deposed that Compusign Australia had provided quotations for a supply of signs for the Western Ring Road Project to certain other companies proposing to tender, including Transfield and Alstom. The only evidence of these quotations was an email, with the subject "Re: Melbourne Western Ring Road - Supply of" from an employee of Compusign Australia to Alstom, with standard prices for variable speed limit signs, and few other details. There were otherwise no quotations in evidence. In any event, for the reasons stated with respect to Hi-Lux, even if this evidence were accepted, it would not establish that Compusign Australia had undertaken definite steps to make an infringing product. 551 Mr He also deposed (and I accept) that in January 2002, a letter had been sent on behalf of Compusign Australia to VicRoads offering for Compusign Australia to develop an electronic variable speed limit sign and that, by March 2002, he had manufactured a prototype sign to demonstrate to customers the general capabilities of Compusign Australia to supply that sort of product. Mr Riquelme's evidence corroborated Mr He's evidence about the prototype. Mr Riquelme gave evidence that when he commenced at Compusign Australia in September 2002, Mr He showed him the prototype sign. Mr Riquelme said that he had demonstrated the prototype sign to customers in late 2002 or early 2003. Mr Riquelme also said that he had travelled to Sydney with Mr He in his "first few months at Compusign" to demonstrate a prototype for the Cross City tunnel project. 552 Further, there was evidence given by Mr Sozio that Hi-Lux had supplied and retrofitted variable speed limit signs, including signs in Yarra Glen and Yarra Junction and completed a job for BG & RG Williams Electrical. 553 There was also evidence that drawings for a variable speed limit sign with an illuminated annulus had been prepared in November 2001 for Hi-Lux by Mr Trebilcock of Futura Controls to facilitate Hi-Lux's tendering for the Western Ring Road Project. In addition, there was evidence that drawings for variable speed limit signs using LEDs with a partly flashing annulus had been prepared for Hi-Lux by Futura Controls in July 2002. (The admissibility of the evidence referred to in this paragraph is discussed below: see [0] and following.) 554 It is apparent that the current form of s 119(1) would now provide broader protection to infringers in the position of Hi-Lux and Compusign Australia, who were, or were taking definite steps to, sell or supply infringing products or processes before the priority date. The critical question is whether s 119 in its earlier form was engaged in the circumstances disclosed in the evidence to which I have just referred. 555 For the reasons stated, in the absence of evidence that either Hi-Lux or Compusign Australia was "making" an infringing product or "using" an infringing process before the priority date, neither can successfully rely on s 119(1)(a). Further, neither Hi-Lux nor Compusign Australia can rely on s 119(1)(b) because the evidence discloses that such steps that each had taken were not "definite" steps to make that product or use that process for the purpose of s 119(1)(b). Hi-Lux's expression of interest regarding the supply of variable speed limit signs for the Western Ring Road Project falls well short of taking definite steps to make that product, and the supply and retrofit of such signs or related products is irrelevant. The Futura Controls designs, assuming the evidence about them is admissible, falls far short of taking the "definite steps" required by the provision. 556 Moreover, for the following reasons, Compusign Australia's creation of a prototype sign would not meet the "definite steps" criterion in s 119(1)(b), notwithstanding that the prototype was demonstrated to potential customers. Although care must be taken in using the UK cases concerning s 64 of the Patents Act 1977 (UK) in deciding the application of its Australian counterpart, Helitune Ltd v Stewart Hughes Ltd [1991] FSR 171, to which Heerey J referred in Welcome Real-Time, is of some assistance at this point. It may be recalled that in Helitune the production of prototype RADS-AT trackers before the priority date was held not enough to show effective and serious preparations. Aldous J said, at 208: At the priority date of the patent, the defendant had not sold an active tracker. It had, however, produced a prototype of an active tracker using a laser with a view to its further development. The position had not been reached where the defendant had decided to sell active trackers, and by the priority date its efforts were concentrated on producing a passive tracker. I do not believe the defendant had reached the stage of making effective and serious preparations to sell an active tracker, and, therefore, section 64 does not give it a defence to the action. 557 The situation in Helitune can be contrasted with the circumstances established in Forticrete Ltd v Lafarge Roofing Ltd [2005] EWHC 3024 (Ch), where the defendant also sought to rely on s 64 of the Patents Act 1977 (UK) in the course of an application to amend its defence to a patent infringement claim. Kitchin J granted leave to do so on the basis that the defendant had shown an arguable case that it had taken "effective and serious preparations" for the purposes of s 64(b) in that before the priority date it had settled the design of the relevant product following a number of trials, and was making final preparations to go into full scale production: at [18]-[19]. 558 Although s 119 and its UK counterpart have much the same purpose (see Welcome Real-Time at [103]), they differ in statutory language, and it would be wrong to place too much weight on them. The contrast between the steps taken by the defendant in Helitune and those said to be taken by the defendant in Forticrete are illustrative, however, of a range of steps that may fall for consideration not only with respect to the "effective and serious preparations" issue in s 64(b) of the UK legislation but also with respect to the "definite steps" criterion in s 119(1)(b) of its Australian counterpart. Compusign Australia's prototype, much like the tracker in Helitune, had been created with a view to further development. This is plain enough from Mr Riquelme's evidence, which I accept, that Mr He had told him "modifications would be made in order to meet a customer's particular requirements". The evidence strongly indicates that, as at the priority date, the prototype had not reached a form of a final product. It certainly had not reached the stage where, as in Forticrete, Compusign Australia was about to make an infringing variable speed limit sign. On the basis of the evidence adduced at the hearing, Compusign Australia has not established that it had taken "definite steps" to make an infringing product before the priority date. 559 On the evidence neither Compusign Australia nor Hi-Lux have adduced evidence that would lead me to conclude that either had satisfied s 119(1)(b). Since neither has met one of the alternative requirements for which s 119(1) provides, their prior use defence under s 119 must fail. It is therefore unnecessary to consider the other issues that would arise under s 119(2) and (3) had they satisfied s 119(1) of the Patents Act.

Other issues 560 Before turning to issues concerning the validity of the Patent in suit, I note that Axent also urged the court to make findings relating to its claim under s 122(1A) of the Patents Act, for an additional amount in the assessment damages. Axent contended that such findings were appropriately made in advance of a hearing on the quantum of liability. 561 I do not propose to address these matters at this point. As indicated, they cannot arise, in my view, because of the conclusion I have reached on Axent's infringement case. In any event, it seems to me that, as the respondents submitted, the application of s 122(1A) should generally be determined at the quantum stage of a proceeding: see JR Consulting & Drafting Pty Ltd v Cummings [2016] FCAFC 20; 116 IPR 440 at [191], [193], following the successful applicant's election between damages and an account of profits: see Krueger Transport Equipment Pty Ltd v Glen Cameron Storage & Distribution Pty Ltd [2008] FCA 803; 78 IPR 262 at [139].

Invalidity of the patent 562 As already noted, in their cross-claims, the respondents challenged the validity of the Patent. I turn first to their novelty ground.

Lack of novelty 563 The respondents submitted, and Axent disputed, that the invention as claimed in the claims of the Patent was not novel because the invention as claimed was disclosed by the September 2001 specification and as part of the installation process for the Western Ring Road Project. 564 Section 18(1)(b)(i) of the Patents Act provided that an invention is a patentable invention if the invention, so far as claimed in any claim, when compared with the prior art base as it existed before the priority date, is novel. Lack of novelty is a ground for revocation by a court: see s 138(3)(b). It is unnecessary to refer in detail to the definition of "prior art base" in Sch 1: it suffices to say that it includes information in a document that is publicly available anywhere in Australia, or information that is made publicly available through doing an act anywhere in Australia. 565 Section 7(1) of the Patents Act provided that an invention is taken to be novel when compared with the prior art base unless it is not novel in light of any one of the following kinds of information, each which must be considered separately: (a) prior art information (other than that mentioned in paragraph (c)) made publicly available in a single document or through doing a single act; (b) prior art information (other than that mentioned in paragraph (c)) made publicly available in 2 or more related documents, or through doing 2 or more related acts, if the relationship between the documents or acts is such that a person skilled in the relevant art would treat them as a single source of information; (c) prior art information contained in a single specification of the kind mentioned in subparagraph (b)(ii) of the definition of prior art base in Schedule 1. 566 Information will have been made "publicly available" if it was made available to at least one member of the public who, in that capacity, was free, in law and equity, to make use of it: see Merck & Co Inc v Arrow Pharmaceuticals Ltd [2006] FCAFC 91; 154 FCR 31 at [98]-[103]. It is immaterial whether the invention has become known to many people or a few people: see Insta Image Pty Ltd v KD Kanopy Australasia Pty Ltd [2008] FCAFC 139; 239 FCR 117 at [124]. 567 A prior art document must disclose explicitly or implicitly all the essential features of an invention, as claimed, if it is to deprive the invention of novelty: see AstraZeneca FCAFC at [350]-[352] and Samsung Electronics Company Ltd v Apple Inc [2011] FCAFC 156; 217 FCR 238 at [127]. Having regard to the disclosure, the person skilled in the art must be able to perceive, understand and be able to apply the discovery without inventive ingenuity or further experimentation: see Hill v Evans (1862) 4 De GF & J 288; 1A IPR 1 at 6; and JMVB Enterprises Pty Ltd v Camoflag Pty Ltd [2005] FCA 1474; 67 IPR 68 at [55] (Crennan J). 568 Difficult questions can arise as to the nature of the disclosure that must be made by the prior art information to anticipate an invention of a later patentee. The discussion by Lord Westbury LC in Hill v Evans has frequently been mentioned in this connection. In that case, Lord Westbury said at 6-7: I apprehend that the principle is correctly thus expressed: the antecedent statement must be such that a person of ordinary knowledge of the subject would at once perceive, understand, and be able practically to apply the discovery without the necessity of making further experiments and gaining further information before the invention can be made useful. If something remains to be ascertained which is necessary for the useful application of the discovery, that affords sufficient room for another valid patent. ... … Again, it is not, in my opinion, true in these cases to say, that knowledge, and the means of obtaining knowledge, are the same. There is a great difference between them. To carry me to the place at which I wish to arrive is very different from merely putting me on the road that leads to it. … Upon principle, therefore, I conclude that the prior knowledge of an invention to avoid a patent must be knowledge equal to that required to be given by a specification, namely, such knowledge as will enable the public to perceive the very discovery, and to carry the invention into practical use. In Bristol-Myers Squibb Co v F H Faulding & Co Ltd [2000] FCA 316; 97 FCR 524 (Bristol-Myers) Black CJ and Lehane J said, in a very different context to the present case, at [67]: [A] prior publication, if it is to destroy novelty, must give a direction or make a recommendation or suggestion which will result, if the skilled reader follows it, in the claimed invention. A direction, recommendation or suggestion may often, of course, be implicit in what is described and commonly the only question may be whether the publication describes with sufficient clarity the claimed invention or, in the case of a combination, each integer of it. … See also General Tire at 486 and AstraZeneca FCAFC at [302]. 569 As I have already said, the respondents submitted that the invention claimed in the Patent was not novel because before the priority date (i.e., 4 October 2002) the invention as claimed was disclosed by the September 2001 specification (TCS 037-5-2001) and as part of the installation process for the Western Ring Road Project. They submitted that the September 2001 specification had been made publicly available before the priority date in three ways: first, when it was posted to a number of suppliers of road sign equipment, including Hi-Lux and Axent, as part of the tender process for the Western Ring Road Project; secondly, by its release by the VicRoads Traffic Control Systems Group, which made it available to suppliers upon request; and, thirdly, pursuant to Victoria's freedom of information laws. 570 The respondents further submitted that the September 2001 specification "describe[d] the requirements for electronic variable speed limit signs which have each of the features of claims 1 to 28 of the Patent, with the exception of claims 12 and 13 (which require the variation of part of the annulus to be in response to an external sensor)". In this connection, the respondents relied on Hi-Lux's position statement on invalidity, in which Hi-Lux had stated that the specification (TCS 037-5-2001) provided a clear disclosure of each of the integers of the claims, with particular reference to claim 1. The respondents also relied on Compusign's position statement on invalidity, in which Compusign also alleged that the September 2001 specification disclosed all the features of the claims of the Patent, as set out in Annexure 1 to that statement. Further, the respondents relied on the evidence of Mr Jan. The respondents contended that the disclosure in the September 2001 specification was clear and direct. 571 In closing submissions, Axent said that it "puts the [respondents] that [sic] proof in respect of [the alleged invalidating disclosures]" and "also relies on each of sections 24(1)(a), 24(1)(b) and 24(2)". Axent submitted that the September 2001 specification did not anticipate the invention as claimed. Axent contended in its position statement (at [8(b)]) that the specification was merely a "wish list" that provided insufficiently direct disclosure. Axent amplified this statement in its closing submissions, contending that when the September 2001 specification was published "there was no VicRoads product to which that specification related, [and] the act of publication did not disclose a VicRoads invention". Rather, the effect of that publication was the promulgation by VicRoads of a "wish-list". In effect, VicRoads was calling on others to produce an invention that matched the criteria set out by it, and a publication of this kind does not anticipate a patent. 572 Axent continued: In their closing submissions the cross claimants continue to fail to provide a "reverse infringement" analysis of the [September 2001 specification] against each of the claims of the Patent. Further, the [September 2001 specification] is for more than just the signage to which the Patent lays claim, such that analysis of the disclosures in that specification must be extremely careful to delineate between the features of any relevant signage referred to and the wider control system that is described. In addition, the [September 2001 specification] refers only to signs which are rectangular, whereas a number of the dependent claims in the Patent are for signs which are square. The [September 2001 specification] accordingly will not anticipate these claims. 573 Axent disputed that the September 2001 specification was made "publicly available" for the purposes of s 7(1) of the Patents Act. Axent submitted that: The onus of establishing publication is not discharged merely by inferential or even actual proof that a document was received: the [respondents] must establish that it was received without any relevant limitations as to its use. The suppliers to whom the tender documentation was sent are not members of the public as referred to in [JMVB Enterprises Pty Ltd v Camoflag Pty Ltd [2006] FCAFC 141; 154 FCR 348]. Rather, they are selected suppliers dealing confidentially with a government agency. The fact that such specifications may have been provided to such suppliers upon request at other times as well, including for type approval processes, is speculative at best and does not in any event establish publication of [the September 2001 specification] before the priority date or the requisite freedom of use that the notion of publication under the Act requires. Finally, in relation to being available pursuant to "freedom of information" laws provides only a right to obtain access, and is no proof of publication per se. (Footnotes omitted) 574 At the hearing counsel for Axent submitted in closing that: The evidence surrounding the publication of the 2001 VicRoads specification - this is the September version with the partly flashing annulus, the high water mark of that is that it may have been sent to other tenderers interested in the Western Ring Road project in October 2001. … There are a series of letters that came from the VicRoads subpoenaed documents that were sent to other manufacturers. All that's in evidence is the letters. The letters refer to these parties being sent tender documents. The attachments to the letters are not in evidence and it is not established through that correspondence that the specification has been made publicly available. When I say that, it's not established through that correspondence as having been sent without any restrictions as to its use. And this is in the context where they're sent in response to a tender. The tender documentation, ultimate contract documentation, makes it very clear that those sorts of documents are all confidential, so are sent and to be maintained under obligations of confidence. And the onus on my learned friend to establish publication of that specification in a non-confidential fashion or in an unrestricted fashion has simply not been met. 575 Axent also submitted that there was no use of the invention as claimed on the Western Ring Road before the priority date, and that such use could not be considered as part of the prior art base for the purpose of s 7(1). In this context, counsel for Axent noted in closing that, amongst other things, Mr Zammit's evidence was that the relevant software was not installed at VicRoads until late November and, in order to have the signs operate "in the field in the manner that would be required to be in anticipation, they needed to be connected to that software". 576 Regarding the alleged disclosure on the Western Ring Road, Axent also relied on s 24(1)(a), contending that: In relation to Axent's alleged conduct in making the signs visible on the Western Ring Road before the priority date (which is denied and not proved) such conduct was in any event for the purpose of reasonable trial and excluded under Regulation 2.2(2)(d) and 2.3(c). This is because, among other things, it was necessary so as to set up the signs appropriately for the ambient lighting, both in the daytime and night, to test the whole system, and because the Western Ring Road project was the first time that such signs would be able to be tested in situ. 577 Counsel for Axent reiterated this submission in closing address. She added that: Section 24(1)(b) will apply to both the Western Ring Road and the provision of the 2001 specification to Western Ring Road tenderers and on the evidence those letters were within 12 months of the - sorry, the patent application was within 12 months of the date of those letters, which is the relevant timing requirement under that section. And then I will come to section 24(2) which applies, again, to both disclosures but is unlimited in time. 578 Axent submitted that the September 2001 specification was excluded from being considered for the purposes of novelty because of s 24(1)(b) and/or s 24(2). Regarding s 24(1), Axent drew attention to the Patents Regulations, which set out the applicable prescribed circumstances and periods as at the relevant date, saying: In short, however, they require the following acts to be disregarded:- a. the working in public of the invention within the period of 12 months before the priority date of a claim for the invention for the purposes of reasonable trial if, because of the nature of the invention, it is reasonably necessary for the working to be in public (section 24(1)(a), Regulation 2.2(2)(d) and 2.3(c)); and b. any disclosures to which section 24(1)(b) applies where a patent application is made within 12 months from the day when the information referred to in that paragraph became publicly available (section 24(1)(b) and Regulation 2.3(2)). 579 With respect to the September 2001 specification, Axent contended that it had "disclosed its invention to VicRoads confidentially and never consented to VicRoads on-disclosing it"; and that "VicRoads' subjective understanding at the time, including whether or not it thought it was acting reasonably" was irrelevant. In closing at the hearing, Axent specifically referred to Mr Bean's evidence that he had not sought consent. 580 Axent contended that it had derived the information from the predecessor in title of the nominated person or patentee. Counsel for Axent submitted in closing on this point that: Mr Bean told Mr Petridis to write the various inclusions into the 2001 specification after Axent had disclosed the invention to VicRoads. Now, there's a point taken against us that there has been insufficient proof of predecessor and title. That's addressed at paragraph 128 of our written submissions. There are additional references to transcript and other things, other than Mr Fontaine's evidence that it was Symon Australia and - who was the predecessor to Axent … . So there was evidence given by Mr Zammit that it was Symon [Australia] initially and then Axent who was involved in the invention, that's at transcript 130 - 1.30 and the footnote 177. And then there are earlier emails as to the prototype's development with various corporate references, which are Symon Australia documents. But by the time we get to the expressions of interest for the Western Ring Road, the business has transferred to Axent. So there's a very clear trail of evidence that the predecessor to the invention, if I can put it that way, in terms of ownership, is Symon Australia and then coupled with Mr Fontaine's evidence that the business was transferred provides the relevant proof of the derivation. And as I've said already, the dates are within the prescribed period. The letters are dated 12 October 2001, sending out the specification and the provisional was filed on 4 October 2002. 581 Axent further submitted the disclosure was confidential. It submitted that its provisional application was made within 12 months from the date of the publication of the September 2001 specification shortly after 12 October 2001, because it had filed its provisional application on 4 October 2002. It followed, so Axent's argument ran, that s 24(1)(b) was engaged. 582 Axent also submitted that s 24(2) was engaged, on the basis that s 24(2) defines the information that is "quarantined from being part of the prior art base, not the disclosure per se". Axent submitted: In that circumstance the relevant enquiry is as to the nature of the information disclosed, and whether any allegedly invalidating subsequent disclosures derive from and are alike in content to the initial disclosure. If so, then they too are disregarded for the purpose of determining what is prior art information. Such an interpretation is more consistent with the purpose of the inclusion of the relevant section in the Act, and with the purpose of the Act as a whole. 583 Citing Re Application by Grant (2004) 62 IPR 143, Axent submitted that "a finding that such 'downstream disclosures' are not, as a matter of principle, prior art information has been made by the patent office in relation to s 24(1)". 584 In closing submissions, counsel for Axent submitted: In the same way here, if the Crown, having been - having been told information, that is under the policies of the Act to be quarantined - and this is information coming from and with the consent of the inventor. The inventor has no control over what the Crown does with it. The inventor should not be penalised for the Crown then choosing to disclose it willy-nilly. So if, and given that the Act has no restriction on the Crown on disclosing, that carve-out from the prior art base is most appropriately whatever you've told the Crown. It doesn't give rise to any offence or cause of action against the Crown if they do make that on-disclosure, all it does is it takes it out of consideration from that prior art base or that subset of information that you look at when you are considering whether the invention in the patent is novel or inventive. Now, there are no third party inventions or activities here which are said to be part of the prior art base. … [W]e say that, given that the overriding policy objective of the Patents Act is to encourage disclosures to government and, in circumstances where the effect of that disclosure could be invalidating, is provided for in a section enabling that not to occur, then that section should be interpreted - and without a confidentiality rider on it, so any disclosure to government is covered by this section. Then the clear import of that section is that that information, you pick up and you put to one side when you considering whether invention is novel or inventive. 585 Axent also contended that the policy issues to which the respondents referred were irrelevant to s 24(2): see below. Axent submitted that: To the extent that a unified policy approach can be discerned from [the respondents'] submissions that approach is misconceived, and would have the effect of rendering section 24(2) worthless, as any disclosures to the Crown could be on-disclosed by the Crown whenever it liked to whoever it liked, with such conduct voiding all patent rights, including avoiding any need for the Crown to seek to purchase or obtain any licence to use such rights. … 586 With respect to Axent's submissions about s 24, the respondents submitted in closing written submissions that "[t]he protection afforded by s 24(2) means that a person may disclose information to the Crown without having to address issues of confidentiality" (underlining in original). This was because "a disclosure to the Crown in and of itself will not constitute making the information publicly available". They contended that s 24(2) did not apply to the September 2001 specification because it was a disclosure made by, and not to, the Crown. 587 The respondents submitted that the language used in s 24(2) did not support Axent's construction, because s 24(2) referred to information "given … to" the Crown. The respondents contrasted this language with the language of s 24(1)(b), which referred to information "derived from" the patent applicant, referencing the source of such information. 588 The respondents further submitted: For many disclosures to the Crown, there may be no expectation that the Crown will then make the information publicly available. Conversely, there are other disclosures in respect of which it would be expected that the information would become publicly available - the filing of a complete application for a patent is an example. For intermediate cases, the circumstances surrounding the disclosure to the Crown may still be relevant to assessing whether the subsequent disclosure by the Crown was, or was not, 'without the consent' of the patent applicant. (Underlining original) 589 The respondents submitted that Axent's expansive interpretation of s 24(2) (so that the provision applied where the Crown made publicly available the information that had been disclosed to it alone) was "not supported by the language of s 24(2), and would undermine the balancing of interests struck by s 24(1)". The respondents submitted that the language of s 24(2) did not support the "reach-through effect that Axent contends for". 590 The respondents submitted that s 24 should be considered in context, noting that the provision "addresses information that would otherwise form part of the 'prior art base'". Citing Coretell Pty Ltd v Australian Mud Co Pty Ltd [2017] FCAFC 54; 250 FCR 136 at [181], they added that information only forms part of the prior art base if it is 'publicly available', and that confidential information is not of that kind. 591 The respondents argued that s 24 "involves a balancing of interests" in that the provision limited the public interest in being able to use information in the public domain freely, in order to protect a prospective patent applicant from the public disclosure of the applicant's invention in certain circumstances. Regarding s 24(1)(a), the respondents noted that these circumstances included: (a) in respect of showing or use at a recognised exhibition (s 24(1)(a), regs 2.2(2)(a) and 2.2(3)); (b) publication during a recognised exhibition (s 24(1)(a), regs 2.2(2)(b) and 2.2(3)); (c) a publication read before or published by a 'learned society' (s 24(1)(a), reg 2.2(2)(c)); (d) reasonable trials that are reasonably necessary to be conducted in public (s 24(1)(a), reg 2.2(2)(d)); and (e) where information was disclosed without the consent of the patent applicant, by someone who derived the information from the patent applicant (s 24(1)(b)). 592 The respondents also referred to the fact that, by the priority date, a general grace period had been introduced by the Patents Amendment Regulations 2002 (No 1) (Cth). This had effect from 1 April 2002, but only in respect of disclosures made on or from that date: see Patents Amendment Regulations 2002 (No 1) (Cth), reg 4(1). The respondents noted that a common feature of these exceptions was that they were limited in time. 593 The respondents continued by way of submission: It follows that the balance struck between the interests of the patent applicant and the general public is such that the patent applicant is relieved from the implications of certain disclosures of its invention, but the public can confidently rely on information being in the public domain once that information has been in the public domain for some minimum period of time (generally around 12 months). That applies even in the situation where there has been an unauthorised disclosure of the relevant information, and whether the patent applicant was aware of that disclosure or not - the interests of the public are still protected by the requirement that a patent application must be filed within 12 months of the disclosure: reg 2.3(2). (The public is provided with additional protection, by reason of the 'prior user defence' - see s 119(3).) 594 In closing submissions at the hearing, counsel for the respondents sought to state the respondents' position succinctly, as follows: [S]ection 24 … involves a balancing of interests. There's the interests of the patent applicant in having certain protection and there's different policy considerations. Your Honour may recall some of those regulations deal with things such as specific exhibitions that are approved, but now since 2002 we've also got a general protection for someone who may not realise for up to a year that they could have sought protection. That's as against the interests of the public in understanding that they should be able to, subject to patent protection … subject to having someone do a search of the patent register, they should be able to practise the prior art after a certain amount of time has elapsed. So if someone receives information in the public domain that doesn't appear to be confidential, the practical reality is that under the current regulations you would have some uncertainty for up to approximately a year in going forward and commercialising that, because there may be a patent application lurking. It does - it does need to be a complete specification that's now filed, that's the trigger, so you can't just start with a provisional and then get your further 12 months before you disclose. So there's that protection built in in that sense. But there's a balancing of interests. 595 The respondents argued that Axent's proposed construction of s 24(2) would not sit harmoniously with s 24(1). They noted that s 24(2) did not involve any time limitation. They submitted that, if the intended effect of s 24(2) was, as they said, to deem disclosures to the Crown to be confidential, then the public had some certainty about its position. In this event, so the respondents said: Should a disclosure to the Crown somehow be learned of, any compulsory disclosure of that information will not avail a person seeking to invalidate a patent. If, on the other hand, Axent's position were accepted, then, so the respondents submitted, "information that entered the public domain following its disclosure to the Crown could not be relied on by the public at any time" (underlining in original). This would, so the respondents submitted, create considerable uncertainty, since a member of the public would not necessarily be aware that the information had originated from a disclosure made to the Crown. As counsel for the respondents put it in closing oral submissions: Axent's position is actually far … wider - would have far greater reach because it could have done nothing until even now, today, and now filed a patent. Waited to see - waited 20 years, 30 years, 40 years to see how this particular technology developed and then filed a patent knowing that all of the public use of that invention during the intervening period was precluded because section 24, subsection (2) has got no time limit. And if the information came through that particular pathway, it's excluded from consideration as being part of the prior art. 596 Further, the respondents submitted that, on Axent's approach, s 24(2) would give greater protection where the disclosure to the Crown was intentional on the patent applicant's part, as opposed to where disclosure to the Crown was made without the patent applicant's authorisation. In written submissions, the respondents contended that, on Axent's construction: … information disclosed by the Crown would be excluded from the prior art base if the information had been knowingly disclosed to the Crown (see s 24(2)(a) …), but would not be excluded after expiry of the time limit applicable to s 24(1)(b) if the information had first been disclosed to the Crown without the patent applicant's consent. (Underlining original) 597 In closing submissions, the respondents clarified their position, explaining that in their submission s 24(2) applied only to disclosures made to the Crown. Other disclosure, including disclosures by the Crown, were governed by s 24(1), and specifically, here, s 24(1)(b). The respondents also argued that Axent's reliance on Re Application by Grant was misplaced. 598 The respondents accepted that they had the legal onus of establishing that a document or an act forms part of the prior art base. Regarding s 24(1)(b) of the Patents Act, the respondents submitted that Axent bore at least the evidentiary onus of establishing that s 24(1)(b) applied, relying in this connection on Coretell at [227] and Grove Hill Pty Ltd v Great Western Corporation Pty Ltd [2002] FCAFC 183; 55 IPR 257 at [221] applying Purkess v Crittenden [1965] HCA 34; 114 CLR 164. The respondents referred to but did not seek to rely on NSI Dental Pty Ltd v University of Melbourne [2006] FCA 1216; 69 IPR 542 at [125], where Tamberlin J apparently proceeded on the basis that the party seeking to rely on s 24 bore the onus of proof. 599 The respondents submitted that Axent had not adduced sufficient evidence to provide a basis for the operation of s 24(1)(b). In closing submissions at the hearing, counsel for the respondents said: So in relation to section 24 subsection (1)(b), the respondents say that Axent can't avail itself of that for four reasons. So the first reason being that the information about [the] partially flashing annulus was already known to VicRoads, the second reason being that the disclosure wasn't by the relevant person. The third reason being the disclosure was made by consent, the original disclosure, and the fourth being that the continuation of the disclosure by VicRoads - that is, beyond the date on which the tenders were received - was with the implied ongoing consent of Axent, or Mr Fontaine. 600 Regarding the first reason, the respondents submitted that Mr Jan's evidence showed that VicRoads already had knowledge of the use of a partially flashing annulus, both as a result of Mr Jan's own trialling of that feature while employed by VicRoads and as a result of a mechanical sign from 1992 with a partially flashing annulus. As their counsel put it at the hearing, VicRoads knew about a partially flashing annulus for three reasons. One, it knew about the metal plate sign with a partially flashing annulus, it wasn't a variable speed limit sign but it knew about that concept. That was in its product sheet and it was also on the gantry that Mr Jan gives evidence about. Further, there was evidence by Mr Jan that he undertook trialling of a partially flashing annulus while an employee of VicRoads. 601 Regarding the second reason, the respondents' counsel submitted at the hearing: [T]he evidence was that the disclosure was in 2000 - September 2000. … [M]y learned friend opened … this morning … on exactly that same basis and the submissions have always been that disclosure was in 2000. Axent did not exist in 2000. The respondents submitted that since Axent was not incorporated until 30 March 2001, it could not have been the "nominated person" or the "patentee" (being Axent itself) making the disclosure in 2000 (or whose consent was given to the disclosure) for the purposes of s 24(1)(b). It follows, so the respondents said, that disclosure was not made by the nominated person or the patentee, as s 24(1)(b) required. 602 Counsel for the respondents submitted: What Axent submits in its answering submissions is that the answer is to be found at Mr Fontaine's first affidavit, paragraphs 9 to 12. Now, this is where the issue of the evidentiary onus comes in, as well as … associated considerations of Blatch v Archer. The single sentence that is in there - the first sentence of paragraph 12 where Mr Fontaine simply says: I established Axent in March 2001 and transferred Symon Australia's business to it including transferring all employees and their entitlements. Now, if Axent wants to put forward a basis to rely on section 24, it needed to do a lot better than that. It needed to give evidence that was supportive of there being a relevant successor entitled. We don't know whether that would have been Mr Fontaine or Symon [Australia]. … [E]vidence wasn't given about his relevant role. Certainly if there's anything in writing, anything orally, anything along those - any details about what that underlying basis was, was not advanced in the evidence other than that single rolled up sentence, which in our submission does not … support and does not provide a basis for the requirement that the disclosing party be shown to have been a predecessor in title. I interpolate here that the principle in Blatch v Archer (1774) 1 Cowp 63; 98 ER 969 is that evidence is to be weighed according to the capacity of a party to adduce it. 603 The third reason was stated by counsel at the hearing as follows: The … information was not disclosed on a confidential basis. Therefore, the … relevant disclosure was not made without the consent of whoever the relevant person may be - Mr Fontaine or Symon [Australia]. But let's just -forgive me ..... Mr Fontaine or Axent. So if somehow Axent is the relevant successor, it did not disclose the information in circumstances that would have given rise to an obligation of confidentiality. So your Honour will recall that there was a bit of - quite a lot of cross-examination exploring of those - that issue and related issues including Mr Bean and Mr Fontaine critically. And what was clear from the evidence was that no one asserted that there was anything specific said on that occasion about confidentiality. The common law principle, therefore, is that you assess it objectively. I'm sure your Honour is familiar with Coco v Clark and Megarry J but I've got the citation to hand - it's (1968) 1 AIPR 587 at 591, but it's a reasonable person standing in the shoes of the relevant person. So it's an objective test from the facts as to whether an obligation of confidentiality should be implied. And it's set out at page 22 and 23 some of the relevant factual considerations here, but true it may be that there may well be various disclosures made by someone in the position of someone like Mr Fontaine to someone in the position of someone like Mr Bean as a representative of VicRoads that would be protected by confidentiality. There would be plenty of examples where that would be natural to imply that, so confidential pricing, tender information, a new technical solution, perhaps many examples of prototypes but here what was being disclosed was an idea of having a different means of informing motorists of the fact of a change of speed. How that was - so Axent wanted VicRoads to specify that, to include that in the specifications for signs to be delivered to it, including as things got closer to 2000 - or later in 2001, in the context of the … Western Ring Road project … . But Mr Fontaine acknowledged … he had a desire to have it included in - interposed in the specification but says he didn't press the point. Mr Bean didn't consider that he needed any permission from Mr Fontaine. He understood similarly that Mr Fontaine was happy for it to have been disclosed. That was Mr Fontaine's evidence as to his reaction when he received the tender pack and found that it had been specified. The nature of this particular information was not information that was intended to be kept confidential. Quite the opposite. And then the follow-on point … that relates to the period up until the disclosure, but then it is disclosed in circumstances where Mr Fontaine knew it was disclosed to others, knew it was in a specification of general application, made no complaint, unsurprisingly, because he was happy that it was disclosed… So there was implied consent to an ongoing disclosure. 604 In written submissions, the respondents submitted that the existence of consent should relevantly be inferred "on two alternative bases", namely: (a) the disclosure of the information by Mr Fontaine to Mr Bean was in circumstances where it was reasonable for VicRoads to understand that it could make the information publicly available by including it in a product specification; and (b) VicRoads continued to make the 2001 specification publicly available from October 2001 through until the priority date in circumstances where Mr Fontaine was aware of the inclusion of the information in the specification, and made no complaint about that fact. The respondents argued that the information was disclosed in circumstances in which it was reasonable for VicRoads to publicly disclose that information and that the circumstances were such that it was reasonable for VicRoads to continue to make the September 2001 specification publicly available 605 The respondents further contended that, as part of the sign installation process for the Western Ring Road Project, Axent, working with Mr Priest from VicRoads, demonstrated the features of the installed signs during September 2002. The respondents submitted that: Those signs were made in accordance with the requirements of [the September 2001 specification]. The demonstration process involved demonstrating the signs changing speed limits, and demonstrating a partial annulus flash that was visible to motorists using the Western Ring Road. This involved a demonstration by Axent itself, and s 24 does not apply to that disclosure. The disclosure did not involve any relevant trial of the invention itself, and the signs had already been subjected to a separate acceptance process in Axent's factory. As for the general 'grace period' exclusion, which applied to disclosures from 1 April 2002, this does not apply because the 12 month period is instead referable to the filing of a complete application, which did not occur until October 2003: reg 2.2(1A). 606 In closing submissions at the hearing, the respondents' counsel noted that this use on the Western Ring Road was a more difficult lack of novelty case because the evidentiary basis was less clear. The respondents' submission was, however, that Mr Priest's evidence should be accepted. Mr Smith acknowledged that this argument was advanced because of the s 24 argument "around the VicRoads" disclosure.

September 2001 specification: public availability 607 I turn first to the September 2001 specification. For the following reasons, subject to s 24, the information in this document was, in my view, capable of forming part of the prior art base, within the meaning of the definition of "prior art base" in Sch 1 of the Patents Act. This is because the information in the September 2001 specification was publicly available in Australia prior to 4 October 2002. 608 It may be accepted that the burden of proof in this regard lay on the respondents. As already noted, there were said to be three ways in which the September 2001 specification was made publicly available. The first was as part of the tender process for the Western Ring Road Project. Mr Fontaine's evidence was that the VicRoads tender documents sent to Axent around mid-October 2001 included the September 2001 specification. Mr Sozio also said that the tender documents received by Hi-Lux under cover of a letter dated 12 October 2001 included the September 2001 specification. On the basis of the evidence before me, I accept that, under cover of pro forma letters dated 12 October 2001, VicRoads sent the tender documents for the Western Ring Road Project to road sign suppliers who had submitted expressions of interest (such as Axent and Hi-Lux), and that these tender documents included the September 2001 specification. 609 It does not follow from this, however, that the recipients of the tender documents were free, in law and equity, to make use of all the information in them as they pleased. As Axent observed, apart from the 12 October 2001 covering letter to Hi-Lux and the specification itself, the respondents did not adduce any other evidence about the contents of the tender documents that VicRoads sent to the prospective tendering parties, or that might otherwise show that they were free to deal with the information they received without constraint. A portion of the contract between Axent and VicRoads for the supply of signs for the Western Ring Road Project was tendered into evidence. This portion of the contract provided no clear answer as to whether the recipients of the tender documents were under any constraint with respect to any of the information they received from VicRoads, including the September 2001 specification. The respondents adduced no other evidence that might have been relevant to this issue. In the absence of evidence, I am unable to determine to the requisite standard whether the recipients of the tender documents were free to make use of the information in them, including the September 2001 specification, as they pleased. 610 It is unnecessary to consider whether a right to obtain access to documents (other than exempt documents) under s 13(a) of the Freedom of Information Act 1982 (Vic) (FOI Act) would be sufficient to establish that the information in the specification was publicly available for the relevant purposes, because I am satisfied that the September 2001 specification was relevantly "publicly available" before the priority date for another reason. I note in passing, however, that any consideration of the availability of the documents under s 13(a) of the FOI Act would need to take account of the operation of Part IV of the FOI Act, pursuant to which some documents are exempt from disclosure under that Act. I also note that the respondents made no submissions about the operation of the FOI Act. Nor did they make submissions or present evidence to show that access under the FOI Act had been given to the Western Ring Road Project tender documents, or to documents of that kind, before the priority date. 611 For the following reasons, I accept the respondents' submission that the September 2001 specification was made publicly available before 4 October 2002 by the release of the specification by the VicRoads Traffic Control Systems Group to, for example, suppliers asking for it in order to seek type approval. Mr Bean, a long-serving VicRoads employee, gave evidence concerning the notation of VicRoads specification "TCS-037-7-2004", from which it may be inferred that the notation "TCS-037-5-2001" on the September 2001 specification showed that it was the thirty-seventh specification in a series of technical specifications released by the VicRoads Traffic Control Systems Group, where the '5' refers to the version number and the year refers to the year of first issue of that version. Mr Bean's evidence was that at the relevant time VicRoads would provide the "TCS" specifications to suppliers upon request, including by email. Mr Bean also said in evidence that the September 2001 specification was of general application extending beyond VicRoads' requirements for a variable speed limit sign for the Western Ring Road Project to VicRoads' requirements for such a sign at other locations and for other projects. Mr Fontaine gave evidence substantially to the same effect. Perusal of the September 2001 specification confirms that it was indeed of general application, and that it was not confined in application to the Western Ring Road Project. 612 Consistently with this, Mr Fontaine's evidence in cross-examination was that the September 2001 specification might form the basis of suppliers' applications for type approval for a variable speed limit sign. Mr Bean also said that a supplier might request a specification as part of the process of obtaining type approval for its product by demonstrating to VicRoads that it had developed a product that met a relevant VicRoads specification. Mr Fontaine and Mr Zammit both gave evidence that it was commercially advantageous for suppliers to have type approval, and that this required the supplier to demonstrate that their product met the relevant VicRoads specification. Mr Bean's evidence was that, to obtain a copy of the specification for the purpose of seeking type approval, suppliers could attend the VicRoads office or request that the relevant specification be emailed to them. I accept the evidence of Mr Fontaine, Mr Bean and Mr Zammit on these matters. 613 Being of general application, VicRoads continued to make the September 2001 specification publicly available as one set of technical specifications that VicRoads made available to its suppliers, whether for type approval or another purpose. The evidence showed that VicRoads made its "TCS" specifications available to anyone who sought a copy without restriction, and that suppliers to VicRoads would seek a copy of a specification such as the September 2001 specification as part of seeking type approval for their products. Since the specification was of general application to variable speed limit signs, and having type approval conferred a commercial advantage by placing the supplier in a better position to win future tenders for its product, it may be inferred that on the balance of probabilities at least one such supplier would have sought a copy of the September 2001 specification. It may be, however, that the mere fact that the specification was available to any supplier who requested it is sufficient for it to have been publicly disclosed, without the need for any such inference: see, e.g., Merck at [103]; Bank of Credit & Commerce International v Price Waterhouse (No 3) [1998] Ch 84 at 106 (Laddie J). 614 There was also nothing in the present context to indicate that a supplier who obtained a copy of the September 2001 specification from VicRoads' office or by email received the specification in circumstances such as to impose a duty of confidence on the supplier. On the contrary, Mr Bean's evidence suggested that providing "TCS" specifications such as this by email was equivalent to the current practice of making them available on the internet. Having regard to the evidence, I find that the September 2001 specification was publicly available in Australia prior to 4 October 2002. It is therefore capable of forming part of the prior art base unless it must be disregarded by reason of s 24.

Operation of s 24 615 Bodkin at p 182 states that: It has long been a feature of the Australian patents law legislation that certain disclosures of an invention before the relevant priority date will not invalidate a patent filed subsequently, either as a result of lack of novelty, or lack of inventive step. Compare s 100(3)(b) of the Patents Act 1952. At the relevant time, s 24 of the Patents Act, and regs 2.2 and 2.3 of the Patents Regulations, gave effect to this idea. Section 24 provides in effect that, in the circumstances it identifies, the court must disregard what would otherwise fall for consideration as prior art information for the purposes of determining novelty or inventive step. 616 At the relevant time, s 24 of the Patents Act provided: 24 Validity not affected by certain publication or use (1) For the purpose of deciding whether an invention is novel or involves an inventive step or an innovative step, the person making the decision must disregard: (a) any information made publicly available in the prescribed circumstances, by or with the consent of the nominated person or patentee, or the predecessor in title of the nominated person or patentee; and (b) any information made publicly available without the consent of the nominated person or patentee, through any publication or use of the invention by another person who derived the information from the nominated person or patentee or from the predecessor in title of the nominated person or patentee; but only if a patent application for the invention is made within the prescribed period. (2) For the purpose of deciding whether an invention is novel or involves an inventive step or an innovative step, the person making the decision must disregard: (a) any information given by, or with the consent of, the nominated person or the patentee, or his or her predecessor in title, to any of the following, but to no other person or organisation: (i) the Commonwealth or a State or Territory, or an authority of the Commonwealth or a State or Territory; (ii) a person authorised by the Commonwealth or a State or Territory to investigate the invention; and (b) anything done for the purpose of an investigation mentioned in subparagraph (a)(ii). 617 The Statute Law Revision Act 2010 (Cth) amended s 24(2)(a)(i) by substituting the words "Commonwealth of" for the words "Commonwealth or", noting that the "of" was a typographical error. Solely for ease of comprehension, I have set out s 24 above as corrected by this amending Act. 618 In construing the words of a statutory provision, such as s 24 of the Patents Act, the duty of a court is to give the words of the provision the meaning that the Parliament is taken to have intended them to have. In performing this duty, a court must have regard to the text and general purpose of the provision, considered in the context of the statute as a whole: see, for example, Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [78]. It has often been said that the task of construction must begin with a consideration of the statutory text: see, for example, Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; 239 CLR 27 at [47]. In Certain Lloyd's Underwriters v Cross [2012] HCA 56; 248 CLR 378 at [25], French CJ and Hayne J added: Determination of the purpose of a statute or of particular provisions in a statute may be based upon an express statement of purpose in the statute itself, inference from its text and structure and, where appropriate, reference to extrinsic materials. The purpose of a statute resides in its text and structure. Determination of a statutory purpose neither permits nor requires some search for what those who promoted or passed the legislation may have had in mind when it was enacted. It is important in this respect, as in others, to recognise that to speak of legislative "intention" is to use a metaphor. Use of that metaphor must not mislead. (Citations omitted) 619 Turning first to s 24(2), it seems to me that the respondents' submissions must be preferred. Subsection 24(2) in terms provides that in deciding whether an invention is novel or involves an inventive step, a decision-maker must disregard any information given by the patentee or a predecessor in title "to any of the following, but to no other person or organisation". The only entity identified in s 24(2) that is relevant in this case is "an authority of a State". This expression applies to VicRoads. It follows, and it was not in contest, that where information regarding the invention has been given by the patentee (or a predecessor in title) to VicRoads, a decision-maker is obliged to disregard that information for the purpose of deciding novelty or inventive step. There is, however, no basis in the statutory text to require a decision-maker to disregard information given by an authority of a State to third parties or the public. On the contrary the words "but to no other person or organisation" indicate that s 24(2) is intended to have a limited operation not extending beyond the entities identified in subparagraphs (i) and (ii) of s 24(2)(a). These words tell strongly against Axent's submission: they indicate that s 24(2) does not have the "reach-through effect" for which Axent contends. 620 Axent contended that a purpose of s 24(2) was to encourage disclosures to Commonwealth and State governments. Such a purpose would be served by either the respondents' or Axent's construction of s 24(2)(a)(i). In contrast, however, to Axent's construction, the respondents' construction also serves another apparent purpose of s 24, which is to circumscribe the occasions in which a decision-maker is prevented from having regard to information forming part of the prior art base for the purpose of deciding novelty by reference to s 7(1). The result is that where information is given to an authority of a State in the circumstances described in s 24(2), the decision-maker on novelty or inventive step must disregard it. If such an authority makes this information publicly available, then the decision-maker may have regard to it unless it has been made publicly available in a circumstance described in s 24(1). 621 As already stated, I have found that the September 2001 specification was made publicly available by VicRoads prior to 4 October 2002, and s 24(2) does not require the court to disregard it for the purpose of deciding whether the invention is novel or involves an inventive step. 622 Regarding the September 2001 specification, there is the further question as to whether s 24(1)(b) operates here to require the court to disregard the information in the specification. 623 As the parties' submissions disclose, there are a number of issues for determination before it can be said that s 24(1)(b) was engaged in this case. A central issue is whether the information was made publicly available without the consent of the nominated person or patentee, through the publication of the September 2001 specification by VicRoads. If the information was made publicly available with consent, then s 24(1)(b) would not be engaged. Both parties proceeded on the basis that the requisite consent was that of Mr Fontaine on his own behalf and/or Symon Australia and, after its incorporation, Axent (assuming Axent was in fact the relevant successor in title to the invention as claimed). For present purposes, whether it was one or the other or both is immaterial because Axent and the respondents proceeded on the basis that Mr Fontaine acted on his own and each company's behalf in this regard. 624 Axent submitted that consent must be positively given, citing Wood v Westaflex (Aust) Pty Ltd (1990) 20 IPR 387 at 399-400 (cited with approval by Besanko J in Aspirating IP Limited v Vision Systems Limited [2010] FCA 1061; 88 IPR 52 at [208]). This does not mean that consent must be expressly stated. Regarding s 158(1)(b) of the Patents Act 1952, King J, of the Supreme Court of Victoria, said in that case that the question posed was: …whether in light of Mr Wood's evidence and the other evidence in the case I should be satisfied that Mr Wood did not consent to Mr Mawhinney showing the Wood sample to his wife and his neighbour. Such consent must in my view be positive and could be inferred from words or conduct of Mr Wood on an earlier occasion. … There is before the court no evidence of words or conduct of Mr Wood from which such an inference can be drawn. The effect of words or conduct must however be assessed in the circumstances of such behaviour. The defendants' counsel have pointed out that when Mr Wood delivered the sample into the hands of Mr Williams he was under a mistaken impression that a patent application had been made in Australia, and that he would therefore not have been concerned about a risk to his Australian patent rights by reason of the publication of the sample in Australia. … The evidence, including that of Mr Williams, shows in my view that the sample was given to Mr Williams to show to his company and for no other reason. One cannot infer any positive consent to it being shown to anyone else. … My conclusion is that on the evidence which I accept I am satisfied that publication of the sample to Mrs Mawhinney and Mr Hamilton, if it took place, was carried out without the consent of the patentee. 625 There is no evidence that Mr Fontaine stated expressly that he consented to the information about the claimed invention being made publicly available through VicRoads' publication of the September 2001 specification. Whether the information was made publicly available without his consent therefore depends on whether his positive consent should be inferred from his words and actions in the circumstances attending them. It is not enough to say, as Axent does, that a finding of positive consent is not open because Axent's consent was not expressly sought. 626 The circumstances are as follows. In about September 2000, Mr Fontaine and Mr Cestnik (both of whom worked for Symon Australia and subsequently Axent) showed a prototype variable speed limit sign to Mr Bean and another VicRoads employee at what would then have been the premises of Symon Australia. Mr Fontaine told the VicRoads representatives that the sign could be programmed to warn the driver of a change in the speed limit by flashing some but not all of the rings of the annulus around the speed limit number. This feature was demonstrated to the VicRoads representatives either that day or subsequently. Mr Bean and his colleague said that they liked this solution, but that VicRoads would need to be satisfied that a speed sign with that proposed feature complied with the Road Rules. Mr Bean later told Mr Fontaine that VicRoads' lawyers had advised that it would be compliant. 627 In March 2001 Mr Bean, who was responsible for managing the tender process for the Western Ring Road Project, told Mr Fontaine that VicRoads would be advertising for expressions of interest to tender for signage for the Western Ring Road Project. VicRoads subsequently provided Mr Fontaine with the April 2001 specification, which, as already noted, did not refer to a partly flashing annulus flashing. Mr Bean started to think about using the partially flashing annulus as a possible conspicuity feature for the signs for the Western Ring Road "closer to seeking expressions of interest". In early April 2001, shortly after VicRoads had called for expressions of interest for the Western Ring Road Project, Mr Fontaine met with Mr Bean to demonstrate the further developed prototype variable speed limit product, Axent having been incorporated by then. He also delivered a prototype product to Mr Bean at the VicRoads office. 628 In September 2001, Mr Fontaine again met with Mr Bean and another VicRoads representative to view a demonstration of Axent's proposed variable speed limit sign with a partly flashing annulus feature. As stated earlier, in the context of the September 2001 meeting, Mr Fontaine was asked whether he was "seeking to have that product approved as an option for [the Western Ring Road] project"; and Mr Fontaine answered "I had a desire to have it included, but I didn't press the point". Mr Fontaine subsequently received the tender documents from VicRoads for the contract for the Western Ring Road Project, which included the September 2001 specification, containing the requirement that part of the inner diameter of the red annulus should be capable of flashing on and off. 629 There is no evidence that Mr Bean had asked Mr Fontaine whether he agreed to include the partly flashing annulus requirement in the September 2001 specification before Mr Bean decided to direct this inclusion. Mr Bean was clear, however, that Mr Fontaine had proposed the flashing annulus solution to VicRoads before the feature was in fact included in the specification. Mr Bean's evidence in cross-examination was that he believed he had acted reasonably in including the requirement, and that he could not see any reason why Axent would not want its prototype product to be included in the specification, including for use in the Western Ring Road Project. Mr Bean also gave evidence that Mr Fontaine was not unhappy about having the Axent variable speed limit product with a partially flashing annulus feature included in the September 2001 specification. At the same time, he acknowledged that "if one company can build a sign that can do this, then others could come along and say, 'I can do that too.'" 630 Axent argued that the disclosure to VicRoads of its variable speed limit sign was made in confidence. It seems to me, however, that this submission was overly broad. Whether and to what extent Mr Bean or any other VicRoads representative owed Axent a duty of confidentiality from its incorporation in March 2001 depended on all the circumstances of the case, there being no applicable written confidentiality agreement. 631 In Australian Medic-Care Company Ltd v Hamilton Pharmaceutical Pty Ltd [2009] FCA 1220; 261 ALR 501 at [636]-[637], Finn J referred to the two tests that have commonly been employed to determine whether the circumstances were such that persons to whom the information was made available, were subject to a duty of confidence, stating as follows: There are two tests that have been employed commonly enough in commercial settings to determine whether a duty of confidence arises by reason of the subject matter and the circumstances in which the subject matter has come into the hands of the person said to be subject to the duty. The first is the "reasonable person" test and derives from Megarry J's judgment in Coco [v A N Clark (Engineers) Ltd [1969] RPC 41] (at 48): If the circumstances are such that any reasonable person standing in the shoes of the recipient of the information would have realised that upon reasonable grounds the information was being given in confidence, this should suffice to impose on that person the equitable obligation of confidence: see Dean, [3.275]; see also Toulson and Phipps, 3-007 - 3-010. The alternative test - the "purpose" test - asks: Has confidential information been imparted for what was known, or ought reasonably to have been known, to be only for a particular purpose? If it has, its use must be limited to that purpose. This approach has commonly been used in cases in which confidential industrial information has been disclosed (usually under contract) to a manufacturer either by way of licence for a period or so as to manufacture a product for the confider: see Saltman Engineering, at 213; Nichrotherm Electrical Co Ltd v Percy [1956] RPC 272 at 280; Ackroyds (London) Ltd at 104; Torrington Manufacturing Co Ltd v Smith & Sons (England) Ltd [1966] RPC 285. Its use extends beyond that context: see Interfirm Comparison (Australia) at 117; and Gurry "Breach of Confidence" in Finn (ed) Essays in Equity, 118 (1985); Smith Kline & French, at 96. See also Coretell at [183]. 632 These principles were applied in Insta Image, where the Full Court held that disclosure at a motocross and jet-ski race that was open to the public had made information "publicly available", although the disclosure by the inventor to the owner of a metal fabricator and his employee had not so done, as their relationship was such as to impose an obligation of confidence (at [144], [156]). 633 Although Mr Fontaine deposed in his first affidavit that he had told Mr Bean that anything that he saw or was given in the way of a sample or product was for VicRoads' purposes only and was not to be disclosed outside VicRoads, including to any suppliers, in cross-examination he was unable to recollect the date or topic of any such conversation. I do not accept that Mr Fontaine specifically raised the issue of confidentiality with Mr Bean, as Mr Fontaine initially claimed. 634 I accept that VicRoads representatives would on occasion receive information from suppliers in circumstances that led them to understand that the information had been communicated in confidence. Mr Bean's evidence was that suppliers would approach him or his staff separately on a confidential basis, seeking information about whether VicRoads was interested in any of their proposed new initiatives. Mr Bean said that he worked closely with such suppliers, on the basis that whatever they told him about their new products or innovations would not be disclosed by VicRoads to others, particularly not to other suppliers. Mr Priest also understood that, when he visited suppliers' premises, he should not communicate what he saw there to other suppliers. A reasonable person standing in the shoes of Mr Bean or Mr Priest would realise on reasonable grounds that information about a supplier's new product was being given in confidence on the basis it would not be disclosed to competitors. For the same reason, Mr Fontaine's evidence that, in working with VicRoads "many documents, contracts, tenders were all provided on a confidentiality basis clearly marked on drawings" can also be readily accepted. Such information was likely to be inherently confidential. 635 It does not follow from this, however, that, in the circumstances described above, the information disclosed by Mr Fontaine to Mr Bean and others at VicRoads gave rise to a continuing duty of confidence. It may be that the information that Mr Fontaine first conveyed to Mr Bean would have attracted a duty of confidence. By the time, however, that Mr Bean and his colleague told Mr Fontaine at the September 2000 meeting that they thought the partially flashing annulus was a good solution but that VicRoads was unable to adopt it unless advised by its lawyers that the solution complied with the Road Rules, a reasonable person might well begin to doubt whether any duty of confidence would remain if Mr Fontaine were told that VicRoads believed it was compliant. This was because the next step for VicRoads' take-up of the new product would be to amend the existing specification for the supply and installation of electronic variable speed limit signs to permit or require the use of a sign with a partially flashing annulus, and in so doing make information about the product publicly available. As the respondents submitted, the evidence showed that "VicRoads had a suite of product specifications that confirmed to suppliers what VicRoads' requirements were, including for the purpose of gaining 'type approval'". 636 By at least March 2001 Mr Fontaine was aware that there was to be a major project involving the installation and supply of a large number of electronic variable speed limit signs on the Western Ring Road. As we have seen, in early April 2001, shortly after VicRoads had called for expressions of interest for the Project, Mr Fontaine met with Mr Bean to demonstrate Axent's prototype variable speed limit product and delivered a prototype product to Mr Bean at VicRoads' office. Axent submitted an expression of interest, but the April 2001 specification that VicRoads subsequently sent did not refer to a partly flashing annulus. 637 In September 2001, Mr Fontaine on Axent's behalf again demonstrated its variable speed limit sign with a partially flashing annulus feature to Mr Bean and another VicRoads representative. It may be inferred from the sequence of events that he did so with the intention of persuading VicRoads to amend the applicable specification so as to permit or require a variable speed limit sign having this feature in the upcoming tender. It was clear from Mr Fontaine's evidence that Axent had put significant effort into the development of its prototype product. It may reasonably be inferred from Mr Fontaine's evidence, taken with the circumstances as a whole, that Axent believed that it would secure a competitive advantage if VicRoads specified the partially-flashing annulus feature for future supplies of electronic variable speed limits signs, including for the upcoming Western Ring Road Project. Mr Fontaine effectively said as much. As stated earlier, Mr Fontaine said that at the September 2001 meeting he wanted to have Axent's product included as an option for the Western Ring Road Project, even if he "didn't press the point". 638 By this time, Mr Bean, who was an experienced VicRoads employee and had been working in VicRoads' ITS Branch since the mid-90s, did not consider that he would breach any duty of confidence if he were to instruct that the partially-flashing annulus feature be required in the applicable specification for electronic variable speed limit signs. I do not consider that a reasonable person standing in Mr Bean's shoes would have thought, upon reasonable grounds, that the information that had been given to him at the September 2001 meeting was given in confidence. On the contrary, having regard to Mr Fontaine's persistent efforts to demonstrate the advantages of Axent's sign with the partially flashing annulus to Mr Bean and the fact that Mr Bean had attended these demonstrations and witnessed the effort that Axent had put into the development of the sign, a reasonable person standing in Mr Bean's shoes would have thought, on reasonable grounds, that Axent wanted its sign with the partially flashing annulus to be required (or at the least, permitted) by the specification that was to be applicable to the Western Ring Road Project and to other projects. Unsurprisingly, Mr Bean's evidence was that he believed that he was acting reasonably in including the sign in the next version of the VicRoads specification for variable speed limit signs. In any event, I would infer that Mr Fontaine and Axent evidently wanted the invention to be required by the specification that was to be applicable to the Western Ring Road Project and subsequent projects involving variable speed limit signs. As already noted, Mr Bean understood that Mr Fontaine was not "unhappy" about the inclusion of a requirement for a partially-flashing annulus feature in the new version of the specification. Indeed, Mr Fontaine himself said that he "wasn't unhappy" about this (at the same time asserting, inconsistently it seems to me, that he believed the partially flashing annulus was confidential to Axent). 639 Having regard to the foregoing matters, I am satisfied that it may be inferred from Mr Fontaine's actions in the circumstances known to him at the time that Axent positively consented to the inclusion of the claimed invention in the September 2001 specification. Indeed this was what Mr Fontaine wanted, as Mr Bean in effect understood from Mr Fontaine's words and actions. 640 I am confirmed in this conclusion by the circumstance that when Mr Fontaine became aware on receiving the tender package for the Western Ring Road Project that the 2001 VicRoads specification included a requirement for the partly-flashing annulus feature, neither he nor anyone else at Axent complained to VicRoads about the inclusion, even though Mr Fontaine and Axent knew that identical packages would have been sent to the other tendering parties; that the new version of the specification was of general application applicable to other projects besides the Western Ring Road Project; and that the specification would be made available to others without restriction, including to other suppliers seeking type approval. In the circumstances outlined above, it seems to me that the absence of any complaint by Axent before the priority date confirms that Mr Fontaine and Axent wanted the claimed invention to be a requirement in what they knew would be a publicly available product specification and, as I have said, positively consented to its inclusion on the basis that information about their product would be made publicly available. There was no basis to import a continuing duty of confidence by the time Mr Bean determined that a partially-flashing annulus requirement should be included in the applicable specification. 641 Accordingly, I am of the opinion that s 24(1)(b) of the Patents Act was not engaged in this case because the relevant information was not made publicly available without consent, through the publication of the September 2001 specification by VicRoads. In light of this conclusion, it is unnecessary to address the remainder of the respondents' arguments on the inapplicability of s 24(1)(b). I observe, however, that I doubt that the respondents' second objection to the application of the provision would withstand analysis: even though not incorporated in September 2000, Axent was incorporated and in existence after March 2001. I shall discuss Mr Jan's evidence concerning what VicRoads already knew about a partially flashing annulus when I turn to the issue of inventive step.

Use of the sign on the Western Ring Road 642 In this event, it is also unnecessary to address fully the respondents' arguments concerning the use of the sign on the Western Ring Road, which, it may be recalled, the respondents described as peripheral and advanced to avoid the possible application of s 24. It suffices to say that on the evidence before the court, I am not satisfied that the respondents have established that the partially flashing annulus was disclosed during the testing phase for the Western Ring Road Project, as they alleged. 643 Axent installed B and C size signs. They were LED signs, and this was discernible by a person skilled in the art, as was clear from the evidence of Mr Jan and Mr Sozio. There was no real dispute that the variable speed limit signs supplied by Axent were subject to factory acceptance testing at Axent's premises before their installation. Mr Zammit, who was Axent's Project Manager/Production Manager during 2001 and 2002, said (and I accept) that each of Axent's signs was tested at Axent's factory during and after manufacture and, when installed along the Western Ring Road, each was covered and/or turned away from oncoming traffic. 644 During a subsequent commissioning phase, Mr Priest from VicRoads, and Mr Cestnik and Mr Zammit from Axent, completed other checks on each of the signs after their installation. I do not accept that all commissioning was undertaken at Axent's factory prior to the installation of the signs on the Western Ring Road, as Mr Fontaine apparently suggested. This is inconsistent with a body of other evidence, including that of Mr Priest, Mr Cestnik and Mr Zammit. It may be, however, that Mr Fontaine intended to say no more than had Mr Zammit (see [650] below), whose evidence I accept. 645 There was some dispute about when the on-site commissioning described by Mr Priest occurred. Mr Priest said that the commissioning of the variable speed limit signs on the Western Ring Road Project occurred between 26 August 2002 and 3 September 2002. Mr Zammit said that the VicRoads testing and commissioning process took much longer than this. Mr Cestnik said that the testing in which he was involved occurred on only one night. 646 The evidence shows that there were several stages in the commissioning, which involved various testing processes. For example, Mr Priest said that remote commissioning included checking that the signs communicated with VicRoads' traffic management centre, using the Axent Platform, and checking that the simulated communication faults (through the Axent Platform) were received by the traffic control centre, and that the Axent Platform communicated with the VicRoads Platform. It seems more probable than not that any testing of this kind would have taken some time and may well have occurred towards the end of the commissioning, bearing in mind that the system did not go live until early December 2002. Limited local testing, by contrast, would apparently not have taken a great deal of time. I am therefore inclined to the view that the seeming conflict in the evidence about testing duration was due to the fact that each of Mr Priest, Mr Cestnik and Mr Zammit was referring to a different stage or stages in the commissioning, involving different testing processes. 647 Mr Priest, who was a VicRoads Project Officer for the Western Ring Road Project, said in evidence that he was present for the on-site commissioning of the signs, which involved (in part, according to him) turning each sign on and adjusting its brightness to take account of the ambient light levels. Mr Cestnik, who was Axent's Production Manager at the time, agreed that the testing was to set the appropriate night-time lighting levels. It was not disputed that the signs were uncovered on the night that this testing occurred. It was also not in contest that, in this testing, Mr Priest and Mr Cestnik were located at the signs, while Mr Zammit was controlling the system remotely via a communications hut. Mr Zammit, who worked closely on the development and installation of the Axent system, also agreed that the night-time testing in which he was involved with Mr Cestnik and Mr Priest, involved adjusting the signs for brightness. Mr Zammit was clear that the purpose of the night-time testing was to set the appropriate brightness levels of the signs for their specific locations, which depended on the ambient lighting in each area. 648 Mr Priest also said in evidence that commissioning the signs involved checking the functionality of each sign by manipulating the controls locally and remotely, and that commissioning involved varying the speed on each sign incrementally, ensuring that the correct speed was displayed, and that the annulus of each sign flashed when the speed was reduced below 100 km/h, and varying the displayed speed on each group of signs incrementally, ensuring the group changed speed together and that the annulus of each sign flashed in unison when the speed limit was reduced below 100km/h. This evidence was contested by Axent's witnesses, Mr Cestnik and Mr Zammit, whose evidence I prefer to that of Mr Priest on this issue, as explained below. 649 Mr Cestnik and Mr Zammit said in evidence that the flashing of the annulus components of the signs was not tested. In cross-examination, Mr Priest accepted that it was possible that Mr Cestnik was correct in his recollection that VicRoads did not test the partly-flashing annulus feature as part of local testing in the commissioning process. Further, Mr Zammit gave cogent evidence to the contrary. 650 Although Mr Zammit was unable to see the sign faces themselves from the communications hut, he said he was "the only point of control for those signs at the time" and that he had reviewed the data that was going to the signs. Mr Zammit also said, and as already stated I accept, that the signs were turned towards the oncoming traffic at some point shortly before the system went live in December 2002, but at that stage were programmed only to display a speed of 100 km/h. This makes Mr Priest's account somewhat improbable. In so far as it is inconsistent with Mr Priest's evidence I would prefer the evidence of Mr Zammit, on the basis that he was clearly more knowledgeable than Mr Priest about relevant programming and software testing. Indeed, Mr Zammit said that, other than brightness at night, Axent's variable speed limit sign was not tested on site. Rather, Axent had designed a program that simulated all the signs as they were in the field, and the software for the traffic management system itself was developed and tested using a simulator program. 651 On the basis of the evidence to which I have referred, it is to my mind more probable than not that Mr Priest was mistaken about the night-time testing of the partially-flashing annulus feature on the signs. As already indicated, he admitted to this possibility. It was also evident from his evidence that his recollection of the course of events relating to the installation, commissioning and testing of the signs had faded over time and, in some instances, his recollection was confused (for example, as to the location of the traffic management centre at the relevant time). This is unsurprising having regard to the fact that he was attempting to recall details of events that had occurred over a decade before. In any event, as already stated, the respondents have failed to show that Mr Priest's evidence should be preferred to that of Mr Cestnik and Mr Zammit. Mr Zammit, in particular, impressed me as a witness with more detailed knowledge and better recollection of the commissioning and testing processes of Axent's signs than Mr Priest.

Disclosure of the claimed invention by the September 2001 specification 652 I accept that the information in the September 2001 specification relating to the requirement for a variable speed limit sign with a partially flashing annulus was "prior art information". I have already found that it was made publicly available by VicRoads at its office or on request by email. For the following reasons, I accept that the invention as claimed in some (but not all) of the claims of the specification of the Patent was not novel when compared with the prior art base as it existed before the priority date. This is because of the disclosure of the invention as claimed in the September 2001 specification. 653 The disclosure in the September 2001 specification was far from a wish-list, as Axent submitted. VicRoads representatives, particularly Mr Bean, had witnessed the development of Axent's variable speed limit sign with its partially flashing annulus. Mr Bean had actually seen the sign at a demonstration by Axent in September 2001 around the same time as the specification was amended to include the invention as claimed. Further, the idea of a wish-list was belied by Mr Bean's evidence that he knew that "if one company can build a sign that can do this, then others could come along and say, 'I can do that too'". 654 The respondents submitted that the September 2001 specification described the requirements for electronic variable speed limit signs which have each of the features of claims 1 to 28, with the exception of claims 12 and 13, and, in support of this, relied on a "novelty claim chart" in Compusign's and Hi-Lux's position statements on invalidity, and on Mr Jan's first affidavit. 655 Whether the September 2001 specification disclosed the essential features of each of the claims of the Patent depends on whether disclosure in the prior art document was "sufficient to make the claimed invention apparent to the skilled addressee": H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70; 177 FCR 151; 81 IPR 228 at [173] (Bennett J, with whom Middleton J agreed). The expert evidence of a skilled addressee will be most relevant to this determination: see, e.g., ICI Chemicals & Polymers Ltd v Lubrizol Corporation Inc [2000] FCA 1349; 106 FCR 214 at [47], [49] (Lee, Heerey and Lehane JJ); and Nicaro Holdings Pty Ltd v Martin Engineering Co (1990) 91 ALR 513; 161 IPR 545 at 542 (Gummow J). While a "novelty claim chart" is of use in setting out a party's position as a result of its own analysis, it cannot fill the evidentiary gaps in its case. 656 In his 8 September 2017 affidavit, Mr Jan addressed the disclosure of claims 1, 5, 7, 9, 10, 12-17, 20 and 24-27 by the September 2001 specification. Mr Jan deposed that claims 12 and 13 were not disclosed by that specification, and the respondents conceded as much. With respect to claims 1, 9, 10, 14, 15, 17, 20 and 27, Mr Jan's evidence was in substance that the September 2001 specification described the essential features of each of these claims, and I accept his evidence in this regard. 657 Axent specifically disputed that claims 5, 7, 24-26 (the sign dimension claims) were disclosed in the specification on the basis that the September 2001 specification "refers only to signs which are rectangular", whereas the sign dimension claims are "for signs which are square". Mr Jan's evidence was that the sizes specified in the sign dimension claims were "similar to" those specified in Australian Standard 1742.2-1999 "but with some limited variation". He added that: I expect that the additional width in the claim dimensions is to provide a more even border area for pixel displays - for a physical speed sign the red annulus is very close to the left and right edges of the sign, but for an electronic sign the red annulus would be more prominent if there is a black border adjacent to it. 658 It does not seem to me, however, that with this evidence or in any other way, the respondents have discharged the burden of proving that the sign dimension claims were anticipated by the September 2001 specification. In substance, the effect of this evidence was that the dimensions disclosed in the specification differed from those disclosed in the relevant claims possibly for the reason to which Mr Jan referred. The respondents did not attempt to meet Axent's submission that anticipation required that the specification disclosed square sign dimensions, as opposed to a rectangular sign: for example, they did not seek to argue that the rectangular shape or specific dimensions of the sign, were not essential integers of the relevant claims: compare Nicaro at 527-528. Nor am I able to discern in Mr Jan's evidence a sufficient basis upon which the court could draw that conclusion. It is impermissible for the court to add glosses from other parts of the specification to the words of the claim: Jupiters at [67(iv)]. Accordingly, anticipation and lack of novelty is not established with respect to the sign dimension claims. 659 Regarding claim 16, Mr Jan deposed that he "[could not] see an express reference to [time-based control] in the specification". He added, however, that: I understand that the simplest scenario in which a system of speed signs would be varied is a time-based system … Based on my experience with any variable signs, the most common form of control was an in-built time clock which was set for pre-determined changes (day-of-week and/or time-of-day). This would be the simplest implementation of a variable speed limit system, and I therefore understand that the 2001 Specification is addressed to this scenario as a minimum scope of operation. As noted above, there is no reference in the 2001 Specification to some alternative basis for varying the speed limit, such as by reference to wind speed or light levels. Of course, other reasons for varying the speed limit would also exist, including by reference to traffic conditions, a traffic accident, roadworks, or some public event. 660 In other words, the evidence of Mr Jan, as a skilled addressee, is that he understood that the September 2001 specification was addressed to an electronic variable speed limit sign with an in-built time clock. Mr Prasad's evidence was consistent with this. In cross-examination Mr Prasad said that, before the priority date, his understanding was that "the speed limit control signs weren't really controlled in any other way, except for time clocks". As will be seen, Mr Prasad was mistaken in so far as he understood that time clocks were the sole means of control, but his evidence is nonetheless consistent with Mr Jan's understanding that the specification related to a sign with a built-in time clock so as to fall within claim 16. Axent did not identify any evidence to the contrary. I am satisfied that the skilled addressee would regard the September 2001 specification as anticipating a changing sign system with the essential features of claim 16. 661 A number of dependent claims were not addressed in Mr Jan's affidavit or elsewhere. No argument was made that these dependent claims were anticipated on the basis their respective independent claims had been anticipated: compare, e.g., Doric Products Pty Ltd v Lockwood Security Products Pty Ltd [2001] FCA 1877; 53 IPR 270 at [128]-[129]. In closing oral submissions, the respondents' counsel noted that their submissions had dealt with anticipation by the September 2001 specification "reasonably briefly" as "there has never been any real argument that there's any particular integers missing or not disclosed", save for claims 12 and 13. I reject this submission. To the contrary, Axent had submitted that the respondents had "fail[ed] to provide a 'reverse infringement analysis' of the 2001 VicRoads Specification against each of the claims of the Patent". The fact that a reverse infringement analysis may have been attempted in the respondents' positions statements does not remove the need for the respondents to adduce adequate evidence. The onus lay on the respondents to establish disclosure by the September 2001 specification: see, e.g., Jupiters at [147]; and ICI Chemicals at [51]. They presented no evidence (and made no submissions) regarding the disclosure in the September 2001 specification of dependent claims 2-4, 6, 8 and 11, 18, 19, 21-23 and 28. I conclude that the respondents have not discharged their burden of proof as to the lack of novelty of these claims. I would not find claims 2-4, 6, 8 and 11, 18, 19, 21-23 and 28 were anticipated by the September 2001 specification. 662 For the reasons stated, the September 2001 specification anticipated claims 1, 9, 10, 14, 15, 16, 17, 20 and 27 and these claims were invalid for lack of novelty. I do not make this finding with respect to claims 2-4, 5, 6, 7, 8, 11, 12, 13, 18, 19, 21-26, and 28.

Some principles 663 The respondents submitted, and Axent disputed, that each of the claims of the Patent in suit lacked inventive step by reference to common general knowledge alone. The respondents also submitted, and Axent disputed, that the invention as claimed lacked inventive step because a skilled addressee would have been aware of the invention as claimed before the priority date in the light of the September 2001 specification, which formed part of the common general knowledge, and alternatively, was to be taken into account by virtue of s 7(3)(a) of the Patents Act. I return to the parties' submissions on the alleged lack of inventive step below. 664 Section 18(1)(b)(ii) of the Patents Act provides that an invention is patentable if the invention, when compared with the prior art base as it existed before the priority date, involves an inventive step. Lack of inventive step is also a ground for revocation: see s 138(3)(b). 665 Subsections 7(2) and (3) of that Act, as in force at the applicable time, relevantly provided: Inventive step (2) For the purposes of this Act, an invention is to be taken to involve an inventive step when compared with the prior art base unless the invention would have been obvious to a person skilled in the relevant art in the light of the common general knowledge as it existed in the patent area before the priority date of the relevant claim, whether that knowledge is considered separately or together with the information mentioned in subsection (3). (3) The information for the purposes of subsection (2) is: (a) any single piece of prior art information; or (b) a combination of any 2 or more pieces of prior art information; being information that the skilled person mentioned in subsection (2) could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood, regarded as relevant and, in the case of information mentioned in paragraph (b), combined as mentioned in that paragraph. The "patent area" was Australia. As already noted, the term "prior art information" was defined in Sch 1 to the Patents Act, by reference to the "prior art base". 666 Section 7(2) of the Patents Act requires the party challenging validity to establish that there was no inventive step. The onus is therefore on the respondents in this case. As French CJ said in AstraZeneca HCA at [18], s 7(2) defeats a claim for want of inventive step unless one of the alternative conditions set out in s 7(2), read with s 7(3), is met; and these conditions involve the following elements: 1 An hypothetical person skilled in the relevant art. 2. The person being, therefore, notionally possessed of the common general knowledge as it existed in the relevant area before the priority date of the impugned claim. 3. The invention being obvious to that person in the light of the common general knowledge. 4. Alternatively, that person being provided with prior art information made publicly available in a single document or through doing a single act, or made publicly available in two or more related documents or through doing two or more related acts if the relationship between them satisfied the requirement of s 7(3)(b). 5. That prior art information, as defined by s 7(3), being information that the person could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood and regarded as relevant to work in the relevant art in the patent area (the relevance requirement). "Ascertained", in this context, means "discovered or found out". "Understood" means that, having discovered the information, the person would have "comprehended it" or "appreciated its meaning or import". 6. The invention being obvious to the person in the light of the common general knowledge considered together with either of the classes of prior art information defined in s 7(3). (Citations omitted) See also Mylan Health Pty Ltd v Sun Pharma ANZ Pty Ltd [2019] FCA 28; 138 IPR 402 at [186]-[190]; appeal dismissed: Mylan Health Pty Ltd v Sun Pharma ANZ Pty Ltd [2020] FCAFC 116; 380 ALR 582. 667 As will be seen, the concept of common general knowledge is crucial, as the skilled addressee is taken to be armed with the common general knowledge for the purpose of an inquiry of the kind contemplated in s 7(2) of the Patents Act. Thus, the Full Court said in Mylan Health at [377]: The Act expressly recognises that information that forms part of common general knowledge is separate from s 7(3) prior art information. It is well established that common general knowledge constitutes part of the mental equipment of those concerned in the art. It is "the background knowledge and experience which is available to all in the trade in considering the making of new products, or the making of improvements in old" (Lockwood [Security Products Pty Ltd v Doric Products Pty Ltd (No 2) [2007] HCA 21; 235 CLR 173] at [55] citing Aickin J in Minnesota Mining and Manufacturing Co v Beiersdorf (Australia) Ltd (1980) 144 CLR 253 at 292). Of course, the party alleging obviousness must usually establish the state of common general knowledge by evidence. Information cannot be treated as part of common general knowledge unless there is some evidence, directly or by inference, of its general acceptance and assimilation by persons skilled in the art. 668 In order to be properly characterised as common general knowledge in the relevant field, there must be evidence that information had been assimilated into the consciousness of the skilled worker: JMVB at [87], citing Aktiebolaget Hässle v Alphapharm Pty Ltd [2002] HCA 59; 212 CLR 411 (AB Hässle) at [57]. Common general knowledge is not limited to knowledge that might be committed to memory and retained at the front of the skilled addressee's mind. It also includes material in the field that the skilled addressee knows exists and to which the addressee would refer as a matter of course: see Aktiebolaget Hässle v Alphapharm Pty Ltd [2000] FCA 1303; 51 IPR 375 at [73]; ICI Chemicals and Polymers Ltd v Lubrizol Corporation Inc [1999] FCA 345; 45 IPR 577 at [112] (Emmett J) cited with approved on appeal: [2000] FCA 1349; 106 FCR 214 at [57]; also Minnesota Mining & Manufacturing Company v Tyco Electronics Pty Ltd [2002] FCAFC 315; 56 IPR 248 at [101]. As Blanco White at [4-207] noted (in a passage referred to in Tyco Electronics at [100]): It is not sufficient to show that information was published in a document having wide circulation in the art concerned, unless that information is also shown to have been "generally accepted without question" (or at least, "generally regarded as a good basis for further action") by the bulk of those in the art, and this is unlikely unless the information was actually used. (Citations omitted) 669 In closing, counsel for Axent also specifically referred to Sandvik Intellectual Property AB v Quarry Mining & Construction Equipment Pty Ltd [2017] FCAFC 138; 348 ALR 156 in support of the proposition that aspects of common general knowledge, such as industry standards, may inhibit the development of solutions. It appears that this proposition did in fact contribute to the outcome in that case, although this was because the primary judge had placed significant weight on the evidence of a particular witness who had no experience in the relevant art and no knowledge of aspects of the common general knowledge of the skilled addressee. It was in this context that the Full Court made the comment at [184] (on which Axent's counsel relied in this case) that: It may be said that, if a person without experience in the relevant art and without knowledge of aspects of the common general knowledge can develop a solution to the problem within a short amount of time, then this provides strong support for a conclusion that the solution would be obvious to the notional person skilled in the art. The difficulty, however, is that in some instances, and in our view the present is such a case, there may be aspects of the common general knowledge that may act as inhibiters in developing the solution … For example … the fact that the industry standard involved (for health and safety reasons) the use of a locking mechanism (such that the drill rod was locked in the chuck) may well have inhibited the development of that solution. (Italics in original) 670 The context for this statement is critical. In effect the proposition to which Axent referred is an expression of the central question where lack of inventive step is claimed: that is, whether it would have been obvious to the ordinary skilled addressee before the priority date to take a particular step, it being irrelevant that it may have been obvious to someone else. This is confirmed by related authorities. 671 Reference to their Honours' reasons in Sandvik, at [163], indicates that the proposition that the common general knowledge can act as an inhibitor can be traced at least to Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No 2) [2007] HCA 21; 235 CLR 173 (Lockwood (No 2)) where the High Court, in the context of considering admissions in a specification, said, at [111]: The Full Court implied that it was obvious to conceive the reverse of a statement in the specification which noted the absence of a feature in a prior art product. But the question of whether the concept of adding integer (vi) to integers (i)-(v) (claim 1) or to the combination of integers (i)-(v), and (vii)-(x) (claim 13) is inventive will turn on what a person skilled in the relevant art, possessed with that person's knowledge, would have regarded, at the time, as technically possible in terms of mechanics, and also as practical. That is the sense in which an idea can involve an inventive insight about a known product. A court cannot substitute its own deduction or proposition for that objective touchstone, except in the rarest of circumstances, such as where an expressly admitted matter of common general knowledge is the precise matter in respect of which a monopoly is claimed. Even if an idea of combining integers, which individually may be considered mere design choices, is simple, its simplicity does not necessarily make it obvious. Older cases concerning simple mechanical combinations illustrate this point, as does Haberman v Jackel International Ltd. Common general knowledge has negative as well as positive aspects. Practical and technical issues can affect the means by which a concept may be implemented in respect of an already known vendible product, and scepticism can inhibit recognition of the utility of applying a concept or idea to a known set of integers. … (Footnotes omitted, emphasis added) 672 Their Honours in Sandvik, at [164] and [165], also noted that in this passage the High Court cited a number of earlier authorities, including Dyson Appliances Ltd v Hoover Ltd [2002] RPC 22. In this case, as the High Court noted, at [165], Sedley LJ referred to the propositions that obvious modifications are those which technically or practically would be obvious to the unimaginative skilled addressee in the art. Sedley LJ continued, at [87]-[88]: Accepting this unreservedly, it remains the case that the perceived limits of technical practicability are a matter of mindset, and that mindset is characteristically affected by awareness of need, of which commercial potential is both a function and an index. Just as it is highly improbable that the idea of the wheel would have occurred to anyone in a society which had no need to move loads, it is hard to believe that either the heretical idea of a heliocentric universe or the observations and calculations which eventually demonstrated its existence would have happened in a society to which chronology and marine navigation were unimportant. Historically there is always something which makes the inventive think the unthinkable and by the same token inhibits the unimaginative from doing so. If then the intellectual horizon of practical research and innovation is in part set by the economic milieu, commercial realities cannot necessarily be divorced from the kinds of practical outcome which might occur to the law's skilled addressee as potentially worthwhile. It is one thing to accept that this technologically skilled but wholly unimaginative person is a lawyer's construct - a ventriloquist's dummy, Mr Hobbs calls him - who thinks only of how things work or could be made to work. It is another to expel him altogether from the real world, where ideas do not occur to people in (so to speak) a vacuum. 673 His Lordship concluded, at [89]: The present case, on the deputy judge's findings, is a very good illustration. The vacuum-cleaner industry was functionally deaf and blind to any technology which did not involve a replaceable bag…The industrial perception of need was consequently, in the judge's happy coinage, bagridden. It is entirely in accordance with what we know about innovation that this commercial mindset will have played a part in setting the notional skilled addressee's mental horizon, making a true inventor of the individual who was able to lift his eyes above the horizon and see a bag-free machine. 674 It is also evident that the "prior art information" referred to in s 7(3) of the Patents Act is to be taken into account for the purposes of inventive step, but only if it is information the skilled addressee could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood and regarded as relevant to work in the art: AstraZeneca HCA at [68] (Kiefel J), citing Lockwood (No 2) at [132], [152]. In Commissioner of Patents v Emperor Sports Pty Ltd [2006] FCAFC 26; 149 FCR 386; 67 IPR 488 at [31] a Full Court of this Court explained: Section 7(3) does not assume an ascertainability by any and all skilled persons, of whatever description, of all publicly available prior art documents anywhere in the world. Nor does it assume that the skilled person has found the document in question, so that the only question is whether he or she has understood it and regarded it as relevant. Such a construction ignores the elements of expectation and reasonableness, as applied to the particular skilled person. 675 Once the common general knowledge and prior art information referred to in s 7(3) has been determined, the question is whether the invention was "obvious" in light of this information. In AB Hässle at [34], Gleeson CJ, Gaudron, Gummow and Hayne JJ cited General Tire at 497 for the proposition that "obvious" in the context of an inventive step inquiry means "very plain", although their Honours made it clear at [36] that this statement should not be accepted at face value. That is, their Honours went on to say (also at [36]) that "'obvious' does not stand by itself in the statute to specify a ground of revocation; the reader is required to 'have regard' to what was 'known or used' on or before a particular date, and to a particular geographical area". 676 With respect to obviousness, in AstraZeneca HCA at [15], French CJ helpfully observed: Relevant content was given to the term "obvious" by Aickin J in Wellcome Foundation Ltd [v VR Laboratories (Aust) Pty Ltd (1981) 148 CLR 262 at 286], posing as the test: "whether the hypothetical addressee faced with the same problem would have taken as a matter of routine whatever steps might have led from the prior art to the invention, whether they be the steps of the inventor or not." The idea of steps taken "as a matter of routine" did not, as was pointed out in AB Hässle, include "a course of action which was complex and detailed, as well as laborious, with a good deal of trial and error, with dead ends and the retracing of steps". The question posed in AB Hässle was whether, in relation to a particular patent, putative experiments, leading from the relevant prior art base to the invention as claimed, are part of the inventive step claimed or are "of a routine character" to be tried "as a matter of course". That way of approaching the matter was said to have an affinity with the question posed by Graham J in Olin Mathieson Chemical Corporation v Biorex Laboratories Ltd [[1970] RPC 157 at 187-188]. The question, stripped of references specific to the case before Graham J, can be framed as follows: "Would the notional research group at the relevant date, in all the circumstances, which include a knowledge of all the relevant prior art and of the facts of the nature and success of [the existing compound], directly be led as a matter of course to try [the claimed inventive step] in the expectation that it might well produce a useful alternative to or better drug than [the existing compound]?" That question does not import, as a criterion of obviousness, that the inventive step claimed would be perceived by the hypothetical addressee as "worth a try" or "obvious to try". As was said in AB Hässle, the adoption of a criterion of validity expressed in those terms begs the question presented by the statute. (Some citations omitted) 677 What has been described as the reformulated Cripps question is not the only test for obviousness. Thus, in Generic Health Pty Ltd v Bayer Pharma Aktiengesellschaft [2014] FCAFC 73; 222 FCR 336; 106 IPR 381 at [71] the Full Court said: We do not think that the plurality in [AB Hässle] were saying that the reformulated Cripps question was the test to be applied in every case. Rather, it is a formulation of the test which will be of assistance in cases, particularly those of a similar nature to [AB Hässle]. The plurality did not reject as an alternative expression of the test the question whether experiments were of a routine character to be tried as a matter of course (Wellcome Foundation Ltd v VR Laboratories (Aust) Pty Ltd (1981) 148 CLR 262, at 280-281, 286, per Aickin J). We do not think there is a divide here in terms of whether an expectation of success is relevant between a test which refers to routine steps to be tried as a matter of course and the reformulated Cripps question. It is difficult to think of a case where an expectation that an experiment might well succeed is not implicit in the characterisation of steps as routine and to be tried as a matter of course. On the other hand, we think a test formulated in terms of worthwhile to try was firmly rejected by the High Court in [AB Hässle] (see also Pfizer [Overseas Pharmaceuticals v Eli Lilly & Company (2005) 225 ALR 416] at 476, [287], per French and Lindgren JJ). The fact (if it be the fact) that the position in the United States may have shifted does not affect the binding nature of what the plurality said in [AB Hässle]. 678 The relationship between obviousness and inventive step was described as follows in Lockwood No 2 at [52]: [A]s a basic premise, obviousness and inventiveness are antitheses and the question is always "is the step taken over the prior art an 'obvious step' or 'an inventive step'"? An inventive step is often an issue "borne out by the evidence of the experts". There is no distinction between obviousness and a lack of inventive step. A "scintilla of invention" remains sufficient in Australian law to support the validity of a patent. In R D Werner [(1989) 25 FCR 565 at 574] Lockhart J stated that there must be "some difficulty overcome, some barrier crossed". This is consonant with older authorities in the United Kingdom which recognised that some inventiveness was required to distinguish patentable advances over the prior art from advances which "any fool" could devise. It also accords with the requirement in the United States that for an invention to be "non-obvious" it must be "beyond the skill of the calling". (Citations omitted) 679 Axent did not frame its response to the respondents' inventive step challenge primarily in terms of the invention as claimed being a "solution" to a "problem". Rather, in its response, Axent emphasised that only a "scintilla" of invention was required, and that it did not follow from the simplicity of the claimed invention that it was obvious. In this connection, Axent referred to Lockwood (No 2) at [111] (set out above), where reference was made to Haberman v Jackel International Ltd [1999] FSR 683. 680 In Haberman an infringement suit was bought in respect of a patent which disclosed a trainer cup for infants. The inventor had devised a spout with a self-closing slit valve which solved a leakage problem affecting other trainer cups on the market. In finding that the patent was not obvious, Laddie J said, at 706: Mrs Haberman [the inventor] has taken a very small and simple step but it appears to me to be a step which anyone of the many people in this trade could have taken at any time over at least the preceding ten years or more. In view of the obvious benefits which would flow from it, I have come to the conclusion that had it really been obvious to those in the art it would have been found by others earlier, and probably much earlier. It was there under their very noses. As it was it fell to a comparative outsider to see it. It is not obvious. See also Minnesota Mining at 293 (Aickin J); Yamazaki Mazak Corporation v Interact Machine Tools (NSW) Pty Ltd & Ors (1991) 22 IPR 79 at 95 (Gummow J); and Winner v Ammar Holdings Pty Ltd (1993) 41 FCR 205, at 212-213 (Davies J). 681 Axent relied in part on the commercial success of its product to support its response to the respondents' challenge. As the cases make plain, however, the significance of commercial success must be considered carefully. For example, in Haberman, the fact that Mrs Haberman's invention had been a commercial success was indeed treated as relevant to obviousness, but as Laddie J's reasons for judgment show, this was because the relevant evidence showed that it should be seen in this way. 682 In Haberman, at 699, Laddie J stated: [S]ome insight into the thinking of those in the art at the priority date can be provided by evidence of commercial success. To this end patentees sometimes prove schedules of sales to support their claims to inventiveness. In most cases this type of evidence is of little or no value because it does no more than show that a particular item or process which employes the patented development has sold well. The mere existence of large sales says nothing about what problems were being tackled by those in the art nor, without more, does it demonstrate that success in the market place has anything to do with the patented development nor whether it was or was not the obvious thing to do. After all, it is sometimes possible to make large profits by selling an obvious product well. But in some circumstances commercial success can throw light on the approach and thought processes which pervade the industry as a whole. The plaintiffs rely on commercial success here. See also Firebelt Pty Ltd v Brambles Australia Ltd [2002] HCA 21; 188 ALR 280; 54 IPR 449 at [50]-[51]. 683 In Haberman, at 699-700, Laddie J set out a useful a list of matters that, depending on the case, could assist in determining whether commercial success was relevant to obviousness. It suffices to observe here that this was not a short list and that, in contrast to the present case, most of the listed matters were addressed in the evidence in Haberman: see Haberman at 701. 684 I also observe that, more recently, Finkelstein J touched on the relevance of commercial success in Conor Medsystems Inc v University of British Columbia [2005] FCA 1661; 223 ALR 74 at [8], where he also noted that care should be taken with the matter of the commercial success in the context of obviousness.

Parties' submissions on inventive step 685 Before examining the evidence in this case, I set out briefly the parties' submissions on inventive step. 686 Axent submitted that the inventive concept disclosed by the Patent was for a new type of regulatory speed limit sign on roadways, designed to be able to change in response to a signal and to flash part only of the regulatory component of the sign - part of the red annulus - when a speed change is desired or required. It said that an important feature of this invention is that the regulatory sign itself warns of the change, doing away with the need for separate warning devices. 687 As we have seen, the parties accepted that the skilled addressee included a traffic engineer, such as Mr Prasad or Mr Jan. Axent submitted that the common general knowledge of the skilled addressee at the priority date (4 October 2002) included "the relevant Australian Standards and Road Rules in force at the priority date", in particular the "Australian Standard Manual of uniform traffic control devices for general use on roads other than freeways" (AS1742), "Australian Standard Road signs - Specifications" (AS1743), and Rule 21 of the Victorian Road Rules. 688 Axent submitted that the evidence showed that at the priority date speed signs were typically static. Axent continued: Any variable illuminated message signs that were in existence were not commonly variable as to speed displayed, but, rather, variable in the sense of whether they were on or off at a particular time. When not in use they typically remained blank, activating only when a reduced speed limit was in place e.g. before and after school in school zones. Some had flashing yellow lights associated with them, and some had the ability to display different speed limits on the display. The relevant standards and Road Rules of the time overwhelming[ly] contemplate and specify warning devices as separate items … 689 Axent submitted that as at the priority date the common general knowledge of the skilled addressee was that a regulatory speed sign was separate to a warning sign; a speed sign had to be present and functioning always for the sign to be regulatory; and for safety reasons, separate warning signs and/or devices were required when speed changes occurred, as evidenced by the AS1742 and AS1743, and Rule 21 of the Road Rules at that time. In closing submissions at the hearing, counsel for Axent specifically drew the court's attention to Mr Zammit's evidence that "flashing amber beacons were ubiquitous" in relation to all road sign products throughout the country at the relevant time. Counsel submitted that: [W]hen the cross-claimants … talk about other design choices they not only do with the benefit of hindsight, they also seek to do so taking out of consideration that which is in the general common knowledge, the feature that addresses that need or that issue. 690 Axent contended that none of the VicRoads specifications formed part of the common general knowledge, as there was no evidence that any manufacturer was aware of them other than in the context of supplies to VicRoads. There was also no evidence that they were known to traffic engineers or widely promulgated. Axent submitted that VicRoads was "but one of numerous end users for road signs, along with equivalent bodies in other states and a wide range of private roads consortia". Further, as with novelty, Axent submitted the September 2001 specification should be excluded from the consideration of inventive step by reason of s 24 of the Patents Act. 691 In this context, Axent submitted that devising a signage system that did not require separate warning signs was not "obvious". Rather, this was, so Axent contended, an "ingenious" or "out of the way" solution. Axent added that: The beauty and the deceptive simplicity of the invention lies in its use of the required regulatory red annulus to fulfil a dual function - to both operate as part of a regulatory speed sign but also to give a speed warning, thus doing away altogether with the need for and potential for distraction caused by any separate additional warning devices. 692 That is, so Axent submitted, a skilled but non-inventive traffic engineer looking forward from October 2002 would not have thought to vary any of the regulatory components of the sign in this way, and would not have done so as a matter of routine. The invention as claimed was designed, so Axent submitted, to be "simpler, clearer [and] easier". It was, accordingly, an advance on previous regulatory speed limit signage sufficient to satisfy inventive step. Axent further submitted that although the assessment of obviousness commonly involved a "problem and solution" approach, that assessment was not confined nor defined by that analysis. 693 Lastly in written submissions, Axent also argued that the prior art taught away from the invention as claimed, namely, that regulatory signage and warning devices should be separate items. As mentioned above, it also contended that the commercial success of the invention was evidence that it was not obvious. 694 The respondents submitted that electronic variable speed limit signs, flashing lights to attract the attention of motorists, and flashing lights to attract the attention of motorists to the fact of a change in speed for a variable speed sign, were all common general knowledge before the priority date. The respondents' primary argument was that each of the claims lacked inventive step by reference to common general knowledge alone. 695 As at the priority date, the respondents contended that there were a number of obvious design choices about what elements could be flashed, "subject to the artificial restraint of needing to comply with the legal requirements for a speed limit sign". The respondents submitted that the use of a partly flashing annulus was, therefore, "one of a number of obvious design options for a conspicuity feature to use to highlight the fact of a reduced speed limit", which did not involve any "technical contribution". The respondents submitted that there was no evidence to show that there was any particular advantage provided (or problem solved) by using a partly flashing annulus as the conspicuity feature. The respondents further submitted that all the other features of the claims of the invention, including the variation of speed by reference to various inputs, were relevantly obvious. 696 In the alternative, the respondents submitted that the September 2001 specification was part of the common general knowledge, in that: (1) the skilled addressee would have been aware of the VicRoads requirements for the supply of signs set out in it; and (2) either in possession of a copy of that specification, "or it would be a document that they would obtain from VicRoads to refer to as a matter of course". If the specification was not part of the common general knowledge, then, so the respondents argued, it was a document that came within s 7(3)(a) and, on this basis, could be taken into account for the purposes of the inventive step inquiry. The respondents contended that, to the extent there was any variation between the disclosure in the September 2001 specification and the subject matter of each claim, the difference was insufficient to give rise to an inventive step. 697 With respect to s 24, the respondents submitted that, for the reasons advanced with respect to lack of novelty, s 24 did not avail Axent.

Common general knowledge 698 As already indicated, with respect to inventive step, the hypothetical skilled addressee includes a person with a practical knowledge and interest in managing and controlling road safety and traffic flow, such as Mr Prasad or Mr Jan, or indeed Mr Bean. For some purposes, it can also include a person with a practical knowledge and interest in the signs and other equipment used as part of traffic management, including a person engaged in the manufacture of such equipment. 699 With respect to common general knowledge, the evidence established, first, that electronic variable speed limit signs were known to the skilled addressee working in the traffic management field before the priority date, although all parties agreed there were relatively few such signs in use as at the priority date. Mr Prasad said in a memorandum to Axent's solicitor dated 16 October 2017 (which was in evidence) that in 2002: [T]here were a variety of electronic signs that were available, however typically these would remain blank and only activate when the reduced speed limit was in place. These signs were typically black with a white illuminated number and red annulus. Some of these signs had flashing yellow lights, which would activate when the speed limit sign activated. There was also an ability for some variable signs to display different speed limits on the display. In cross-examination, however, Mr Prasad said that at that time he was only specifically aware of electronic signs located on trailers in which the speed limit was varied, but he was admittedly familiar with AS1742. AS1742.4-1999 specifically described variable speed limit signs: see [3.5] at [702], [706], [708] and [710] below. 700 Mr Jan said in his 8 September 2017 affidavit that variable speed limit signs started to be developed at VicRoads during the 1990s, and that VicRoads had prototypes on a gantry at Mulgrave, with a mock-up board on which different displays could be generated. In particular, he said that: … we had at least one variable speed limit sign which had the speed displayed using white fibre optics, and an annulus formed of two rings of red fibre optics. I remember that the inner ring could be flashed and that it could also flash both annulus rings. Mr Jan's evidence on this topic was not substantially challenged. It may be recalled that Mr Bean's evidence was that he had not seen such a variable speed limit sign at Mulgrave, a circumstance that Mr Jan said was entirely possible since the sign was "temporary in nature". Mr Jan's observation would also explain Mr Fontaine's evidence that he had not seen the sign. 701 Further, in his 11 October 2017 affidavit, Mr Bean gave evidence that around 2000 he was aware that the New South Wales Traffic Authority had variable speed limit signs with two flashing amber warning lights at the top of the display panel that flashed to warn drivers of a change in speed limit. 702 It is also worth bearing in mind that in cross-examination Mr Bean (as well as Mr Cestnik and Mr Fontaine) gave evidence that electronic variable speed limit signs had been in operation in the Burnley tunnel as part of CityLink since about 1999 or 2000. Indeed, Axent referred to the installation of these signs as part of its tender for the Western Ring Road Project. 703 There was other evidence that electronic variable speed limit signs were well known to the skilled addressee. As already noted, [3.5.2] of AS1742.4-1999 specifically addressed such signs. Further, VicRoads' April 2001 specification, which was of general application in Victoria, specifically addressed VicRoads' requirement for electronic variable speed limit signs (without, of course, referring to a flashing annulus feature). That requirement had been part of the specification for more than twelve months before the priority date. Indeed, before the priority date, Victoria's Road Safety (Road Rules) Regulations 1999 had included the required design for "a variable illuminated speed-limit sign": Sch 2, item 66, Diagram 50. 704 Secondly, with respect to common general knowledge, the evidence also showed that before the priority date the use of flashing lights to attract the attention of motorists was well known to the skilled addressee in the traffic management field. Mr Prasad gave numerous examples in his 3 November 2017 memorandum (also in evidence), including flashing lights at tram safety zones, flashing lights on ice/frost warning signs, flashing lights on signs warning of traffic signals ahead, and flashing lights on speed trailers with signs warning motorists to slow down. Mr Jan gave further examples, including pedestrian crossing lights, traffic signals defaulting to an amber flashing mode when out of operation, "no right turn" signs, "give way to pedestrians" signs, and flashing lights on tow-trucks and roadside works vehicles. Mr Bean also confirmed in evidence that flashing lights were used to attract motorists' attention. 705 Thirdly, with respect to common general knowledge, the evidence established that the use of flashing lights to attract motorists' attention specifically to the fact of a change in speed for an electronic variable speed sign was also generally known to those in the traffic management field before the priority date. There was the evidence from Mr Prasad to which I have already referred: see [699] (although in cross-examination, Mr Prasad said that before the priority date he was only aware of the use of flashing lights with single speed electronic speed limit signs (as to which, see below)). 706 Mr Jan's evidence was clear, however, that, as at the end of 1999 when he finished with VicRoads, there were some variable speed limit signs that had flashing orange lights in their corners to attract motorists' attention to a change in the speed limit. Mr Bean said in evidence that it was common practice before the priority date to include, with respect to variable speed limit signs, separate amber warning lights to alert a driver to a change in speed or conditions. Mr Zammit also gave evidence to like effect. 707 The known use of flashing lights to warn motorists of a change in the speed limit with respect to a variable speed limit sign is confirmed by [3.5.2] of AS1742.4-1999, bearing in mind Mr Prasad's evidence was that most traffic engineers would have been aware of this standard and its requirements as at the priority date. Indeed, it was common ground between the parties that AS1742 and AS1743 were central reference documents for traffic engineers and, as such, part of the common general knowledge before the priority date. It also seems that there was really no dispute that the use of flashing amber lights as a warning device was also part of the common general knowledge. 708 On the basis of this evidence, I accept that electronic variable speed limit signs formed part of the common general knowledge before the priority date. Axent submitted that the evidence at the priority date was that speed signs were typically static, relying principally on the evidence of Mr Prasad that he was not aware of electronic speed limit signs that would display different speeds at different times. The weight of evidence is to the contrary, however, having regard especially to the evidence of Mr Jan and Mr Bean, mentioned above, and to the contents of [3.5.2] of AS 1742.4-1999. 709 On the basis of the evidence to which I have referred, I accept that the use of flashing lights to attract motorists' attention to a particular road feature (whether on account of a need for caution or a change in speed limit or the like) was part of the general common knowledge before the priority date. Further, on the basis of the evidence to which I have referred, I also accept that the use of flashing lights specifically to attract the attention of motorists to the fact of a change in speed for a variable electronic speed sign formed part of the common general knowledge before the priority date. 710 Axent did not really dispute this, but emphasised that at the priority date the regulatory speed sign was always a separate form of signage to the warning signs. It also submitted that this was an "inhibitor" to the development of a new product. I do not accept, however, that, as Axent submitted, the use of flashing lights here was necessarily a separate form of signage. The conspicuity features to which Mr Jan referred were additional features within the corners of the signs. Mr Bean gave evidence to like effect in connection with the practice in New South Wales. AS1742.4-1999 at [3.5.2] confirms that warning conspicuity features in the form of amber flashing lights were to be part of the relevant sign. 711 The fact that the Patent was drafted on the basis that none of the matters I have found to be part of the common general knowledge were generally known does not detract from these conclusions.

Common general knowledge and the September 2001 specification 712 The parties were in dispute as to whether the September 2001 specification could be taken into account for the purposes of inventive step. For the reasons already set out in connection with novelty and s 24 of the Patents Act, above, neither ss 24(1)(b) nor 24(2) apply so as to prevent the consideration of the specification for the purpose of assessing inventive step. 713 Whether information has become so widely known and accepted as to become part of the common general knowledge must be shown by the evidence: Meat & Livestock Australia Limited v Cargill, Inc [2018] FCA 51; 129 IPR 278; 354 ALR 95 at [688]. The evidence did not establish that the September 2001 specification was part of the common general knowledge of the person skilled in the art before the priority date. There was no evidence that a person with a practical knowledge and interest in managing and controlling road safety and traffic flow would have assimilated the information into his or her consciousness in the way described in the authorities. Nor was there any evidence that such information would have entered the consciousness of any other person skilled in the art in this way. 714 Of course, common general knowledge extends to material in the field that the skilled person knows exists and to which such a person would refer as a matter of course. There is, however, no evidence that as at the priority date, 4 October 2002, there was any knowledge of the September 2001 specification beyond VicRoads and Axent, and a limited number of others who had received the VicRoads tender package for the Western Ring Road Project. As already stated at [613], it may be inferred that at least one supplier had requested a copy of the specification from the VicRoads office but there was no direct evidence as to precisely how many such requests had been made. There was no evidence that, as at 4 October 2002, information about the specification had become so widely known that the skilled person would know of it and refer to it as a matter of course. 715 Further, there was no evidence that the September 2001 specification was information that a skilled person within the meaning of s 7(2) could, before that date, "be reasonably expected to have ascertained, understood, and regarded as relevant" for the purposes of s 7(3)(a). There was no evidence, for example, that the skilled person would have undertaken to source copies of VicRoads' specifications, as a matter of course: compare NutraSweet Australia Pty Ltd v Ajinomoto Co., Inc. [2005] FCA 1524; 67 IPR 381; 224 ALR 200 at [44]-[46]. 716 For these reasons, I reject the respondents' submission that the September 2001 specification was part of the common general knowledge or that it can be combined with the common general knowledge pursuant to s 7(3) of the Patents Act.

Common general knowledge and the invention as claimed 717 The critical question is, therefore, whether each of the claims lacked inventive step by reference to common general knowledge alone. 718 Axent submitted that the claimed invention was not obvious "in large part" because the invention involved a signage system that did not include a separate warning device, but nevertheless complied with the relevant regulatory requirements, including for a regulatory speed sign to always show a number in a circle. Axent contended that the prior art taught that regulatory signage and warning devices should be separate items. Axent's submission was that, prior to the invention, regulatory speed limit signage was "considerably more complex" and that the "beauty and deceptive simplicity of the invention" was its use of the requisite regulatory red annulus to operate both as part of a regulatory speed sign and to warn of a change in the speed limit. It was Axent's contention, as we have seen, that the notional traffic engineer at the relevant date, with knowledge of the relevant prior art and the signage in use in Australia, would not have been directly led as a matter of course to try to design an improved regulatory speed sign in this way, in the expectation that it might well produce a useful alternative to existing signs or a better sign. 719 The respondents submitted, first, that, having regard to the fact that, as at the priority date, both an electronic variable speed limit sign and the use of flashing lights to attract motorists' attention to a speed limit reduction were part of the common general knowledge, the use of a partly flashing annulus was but one of a number of obvious design choices for a conspicuity feature to draw attention to a reduction in the speed limit. They submitted that there was no evidence that the invention of the Patent conferred any particular advantage over the prior art. 720 It may be accepted that, as Axent submitted and reference to the authorities (including Dyson Appliances, Lockwood (No 2) and Sandvik) confirms, in some cases, aspects of common general knowledge, such as industry standards, may inhibit the development of solutions. It is for this reason that where lack of inventive step is raised, the court is required to focus on the question whether it would have been obvious to the ordinary skilled worker before the priority date to take a particular step, it being irrelevant that it may have been obvious to someone else. 721 Further, it may be accepted that, subject to the need to comply with the legal requirements for a speed limit, there were a number of features of an electrical variable speed limit sign that might have been flashed as a conspicuity feature. The respondents submitted that other options besides the known use of flashing lights in the corners of the signs included flashing speed numerals, the annulus (or part thereof) or the speed numerals and annulus (or part of thereof). Axent's case was in part that the common general knowledge, including the relevant Australian Standards (see, for example, AS1742.4) limited the industry perception of need, much as it did in the vacuum cleaner industry discussed in Dyson Appliances where only "a true inventor … was able to lift his eyes above the horizon and see a bag-free machine". It was implicit in Axent's argument here that these options were not plain to the ordinary skilled worker before the priority date because that worker's horizon was limited by the common general knowledge so that the worker was focussed solely on using flashing amber lights to warn motorists of the need to slow down. 722 There are at least two difficulties with Axent's approach at this point. The first is that apart from the fact that relevant Australian Standards and the use of flashing amber lights as a warning device were part of the common general knowledge, there is little or no evidence that the ordinary skilled worker in the traffic management field was unable "to lift his eyes above the horizon" and see a different flashing conspicuity feature: cf Dyson Appliances at [89]. The second difficulty is that the evidence showed that the ordinary skilled worker was aware that a flashing annulus (whether in whole or in part) was among the options for a conspicuity feature to warn motorists of a reduction in the speed limit. Although this had not occurred to Mr Bean prior to Mr Fontaine's demonstration of a flashing annulus feature, there was clear evidence (see below) that the feature had already had been thought of by other such workers in the art before the priority date. 723 A VicRoads product sheet from 1992 (exhibited to Mr Jan's 8 September 2017 affidavit) advertised a fibre-optic speed sign with an illuminated annulus feature with a flashing sign legend panel. Mr Jan's evidence was to the effect that documents such as this were distributed outside VicRoads, including to suppliers, to encourage product development. 724 Mr Jan also gave evidence that during the 1990s the fibre optic option of a flashing annulus had been trialled on a prototype sign at the VicRoads facility in Mulgrave. I accept his evidence, which was supported by a photograph of what he identified as that prototype. As I explain further at [735], Mr Jan impressed me as a reliable witness. (As indicated, I return to Axent's challenge to Mr Jan's evidence below: see [809] and following.) 725 I interpolate here that Axent suggested that Mr Jan was not an "uninventive" worker, but this, so it seems to me, is to miss the point. The respondents did not contend that Mr Jan had proposed a flashing annulus feature. Rather, their evidence was that it had been readily evident to others before the priority date that the feature was among those that could be selected to warn motorists of a reduction in speed limit on a roadway. This seems clear from the 1992 product sheet, and from the fact that a fibre optic flashing annulus was being tested on the gantry in Mulgrave by VicRoads employees during the 1990s. 726 The respondents also referred in this context to drawings that Mr Sozio had acquired from a former colleague, Mr Trebilcock of Futura Controls, before his death in 2013. Mr Sozio's evidence, which I accept, was that Hi-Lux requested Mr Trebilcock to prepare drawings depicting a variable speed limit sign with a partially flashing annulus to facilitate its prospective tender for the Western Ring Road Project. The relevant index entry showed that these drawings were done around November 2001. Mr Sozio also gave evidence, which I accept, that in about July 2002 Hi-Lux requested Mr Trebilcock to prepare the drawings depicting a variable speed limit sign using LEDs with a partly flashing annulus to facilitate its provision of a sign of this kind about this time. Finally, Mr Sozio's evidence, the drawings and their accompanying index showed that, on the balance of probabilities, Mr Trebilcock at Futura Controls had done drawings for VicRoads in May 2000 depicting a partially flashing annulus feature. (For the reasons stated below, I would admit the relevant evidence and overrule Axent's objection to its admissibility: see [0] and following below.) 727 Even if the Futura Controls evidence ought not to be admitted and therefore considered in this context, the other evidence to which I have referred, especially of Mr Jan, showed that, on the balance of probabilities, before the priority date the ordinary skilled worker was aware that, besides the use of flashing lights in the corners of the signs, there were other options including a flashing or partially flashing annulus to draw a motorist's attention to the need to slow down. 728 In determining whether the invention as claimed was obvious, it is usual, as the authorities already mentioned show, to identify a problem that was overcome by the invention. Thus, for example, in Wellcome Foundation Ltd v VR Laboratories (Aust) Pty Ltd (1981) 48 CLR 262 at 286, Aickin J said that the question at issue was whether a person skilled in the art faced with the same problem would have taken whatever steps led from the prior art as a matter of routine: see also AB Hässle at [52]-[53]; and Generic Health at [71]. 729 Relying on Lockwood (No 2), Axent submitted in closing that the problem and solution approach may be unfair to an inventor of a simple solution. Indeed, counsel for Axent did not identify a problem solved by the invention as claimed, affirming that: There's no problem. … But that's not - you don't only invent things or try new combinations in order to overcome problems. You invent things in order to make things simpler, clearer, easier - all of those things. And that, in my submission, is what Axent has done, and that is what the patent claims. This is, however, to overstate the effect of Lockwood (No 2). 730 In Lockwood (No 2) at [64]-[65], the High Court said: Although the recognition of the need to identify an "inventive idea" justifying a monopoly is not new in Australia, the developments in the United Kingdom, which emphasise the need to identify the "inventive concept" in terms of "problem and solution", has raised the threshold of inventiveness. This has been exemplified by a number of relevant English cases since 1977. Such developments were considered and distinguished in [AB Hässle]. This Court rejected confining the question of obviousness to a "problem and solution" approach, particularly with a combination patent. This should not be misconstrued. The "problem and solution" approach may overcome the difficulties of an ex post facto analysis of an invention, which may be unhelpful in resolving the question of obviousness. However, it is worth repeating that the "problem and solution" approach may be particularly unfair to an inventor of a combination, or to an inventor of a simple solution, especially as a small amount of ingenuity can sustain a patent in Australia. Ingenuity may lie in an idea for overcoming a practical difficulty in circumstances where a difficulty with a product consisting of a known set of integers is common general knowledge. This is a narrow but critical point if, as here, the circumstances are that no skilled person in the art called to give evidence had thought of a general idea or general method of solving a known difficulty with respect to a known product, as at the priority date. (Citations omitted) 731 While I accept Axent's submission that one cannot under Australian law confine obviousness or lack of inventive step to a problem and solution approach, particularly with respect to combination patents, the High Court did not affirm that no problem need be identified. On the contrary, the Court apparently proceeded on the basis that, in the case of a combination patent, there was a "perceived difficulty" but the solution may appear deceptively similar. The need for some such difficulty is confirmed by the Court's earlier adoption of Lockhart J's statement in RD Werner & Co Inc v Bailey Aluminium Products Pty Ltd (1989) 25 FCR 565 at 574 that there must be some "difficulty overcome, some barrier crossed" by the invention as claimed for it to be said that there was an inventive step: see Lockwood (No 2) at [52]. This statement, as the Court went on to say, also at [52], was "consonant with older authorities in the United Kingdom which recognised that some inventiveness was required", (citation omitted). 732 The respondents submitted that there was no evidence that the claimed invention conferred any particular "advantage" over the prior art, but it does not seem to me helpful to refer to the presence or absence of an advantage in the present context. There is a class of patents - sometimes called selection patents - where the focus is on the advantage attaching to the invention as claimed: see, for example, Re IG Farbenindustrie AG's Patents (1930) 47 RPC 289 and E.I. Du Pont (Witsiepe's) Application [1982] FSR. 303, at 309. Leaving aside the place, if any, of patents for selection inventions in Australian law (as to which, see Apotex Pty Ltd v Sanofi-Aventis [2008] FCA 1191 at [75]-[81] and Eli Lilly and Company Limited v Apotex Pty Ltd [2013] FCA 214 at [375]-[387]), it is clear that the Patent in suit is not a "selection patent" (see, for example, E.I. Du Pont at 309) and no party submitted that it was. I see no other basis on which an invention conferring an "advantage" over the prior art (as opposed to overcoming a difficulty or crossing a barrier) would be relevant to inventive step. 733 It is clear, however, from the evidence to which I am about to refer that the invention as claimed did not overcome a difficulty or cross a barrier, as Lockhart J put it in the phrase approved by the High Court in Lockwood (No 2). Further, as will be seen, it is not correct to say, as Axent does, that the respondents placed no evidence before the court on the issue of obviousness. 734 I begin first with Mr Jan's evidence that there was minimal difference in terms of complexity or efficacy between the use of a partially flashing annulus feature and the use of flashing yellow lights. In his 8 March 2018 affidavit, he said: As for complexity, any difference between the two alternatives is in my view minimal. A means for flashing the relevant display component will need to be incorporated for either design choice, and the only relevant difference is that the yellow flashing light components can be omitted from the sign. This is a relatively minor part of the overall sign. 735 With respect to the effectiveness of each approach, Mr Jan's evidence was that the greater efficacy of a partially flashing annulus feature compared with the use of yellow flashing lights was at best speculative. Thus, in his 8 March 2018 affidavit, he said: Yellow flashing lights had generally been used to warn motorists of danger or a need to slow down … The use of flashing yellow lights may therefore be more effective in attracting a motorist's attention, and in simultaneously communicating that there is either a danger ahead or a need to slow down, or both. On the other hand, flashing the internal annulus rings may be less distracting for a motorist, and may focus their attention more effectively on the speed numerals within the annulus rings. While it is possible to theorise as to which design choice is more effective for a majority of motorists, a proper assessment would require a trial to gauge motorists' actual responses and perceptions. Such an assessment would involve different lighting conditions, and motorists of different ages, with different levels of eyesight and different levels of driving experience. 736 I observe at this point that Mr Jan impressed me as a knowledgeable witness, with a sound recollection of relevant matters at the time he was working with VicRoads, which was before the priority date. He also impressed as a thoughtful witness, who gave balanced evidence, including indicating the limits of his memory when that was appropriate. 737 Mr Bean conceded in cross-examination that the flashing yellow lights feature may have been more effective in warning motorists of a speed limit change because motorists were more familiar with this feature as a warning device at the relevant time. (As already indicated, I would not attach much weight to Mr Bean's evidence that he did not know of anyone who had thought of "a flashing annulus solution" before, and that it seemed to him at the time "a simple and clean solution, but not an obvious one". There was, as already noted, clear evidence that that the skilled worker was aware of a flashing annulus feature well before the priority date.). 738 I have not overlooked Mr Prasad's evidence. Contrary to Mr Jan, Mr Prasad initially expressed a view that a flashing annulus solution was "ingenious". Thus, in a report of 3 November 2017 (which was in evidence), he said: I believe that the ability to flash the annulus and have the change in the sign sufficiently conspicuous to approaching motorists would not have been an obvious thing to do. The idea is simple, however it is also ingenious as it enables the removal of all external signs/devices and allows the sign to be used in isolation. 739 Mr Prasad significantly modified this position, however, in his subsequent evidence. In his later report of 11 April 2018, he said: "[a]s a single sign, there may be little difference between the two options", although he did go on to say that: [T]he flashing annulus provides a more legible and practical option as a conspicuity device as it removes the flashing yellow element from the sign. … When fitted in a freeway gantry for example, the provision of 4 flashing yellow lights on each sign has the potential to be distracting to approaching motorists. 740 Mr Prasad impressed me as an honest witness, who was nonetheless inclined to argue the case for Axent, as it seems to me the tautology in the first sentence of the above passage and his statement about the gantry indicates. I note, moreover, that Mr Prasad accepted in cross-examination that his statement in the last sentence in the above passage was not based on any study, and that the lights would in fact be placed apart on any such gantry. Furthermore, as the respondents observed, the opinion he expressed in the last sentence was based on an error in that he said that four flashing lights were needed for each sign on the gantry to comply with the relevant Australian Standard, whereas in fact this standard (AS1742.4) only required "either single flashing or twin alternating flashing yellow lights". 741 Mr Prasad acknowledged in his 11 April 2018 report that extensive human factors testing would be required to determine which feature was the more effective. Although he claimed that "anecdotally" a partly flashing annulus was "the preferred option, as it appears to be a commonly used sign", he accepted in cross-examination that this feature was only more commonly used because VicRoads required the feature in its specification and that he did not know why VicRoads had specified this as opposed to other conspicuity options. 742 Having regard to the above discussion, where there is conflict between the evidence of Mr Jan and Mr Prasad, I would prefer the evidence of Mr Jan (noting what I have said about Axent's admissibility submissions below). 743 I bear steadily in mind that the legal burden of proof lay on the respondents to establish to the requisite degree that the invention as claimed in the Patent in suit involved an inventive step: see s 7(2) of the Patents Act; and AstraZeneca HCA at [18]. I accept that in such a case as this, should the evidence before the court fail to satisfy it to the requisite standard that the invention lacks inventive step, the invalidity challenge on this ground must fail. This is not so in the present case, however, where I am satisfied that on the balance of probabilities the invention as claimed in the Patent in suit lacks inventive step. 744 I interpolate here that, in this context, Axent relied on Beach J's statement in Meat & Livestock Australia Limited v Cargill at [11] that "where there are conflicting sets of expert opinions on an issue such as a lack of inventive step presented bona fide by witnesses of accepted expertise, then unless one set of views can be rejected on proper grounds, the legal burden on the opponent to establish to the requisite degree the relevant ground of opposition will not be discharged". His Honour was, of course, concerned with an appeal from a delegate in an opposition application. It does not seem to me that this case is directly relevant to the approach to be taken to expert evidence regarding inventive step in the context of a revocation proceeding in this court. In any event, for the reasons already stated, where the evidence of Mr Prasad is in conflict with the evidence of Mr Jan, I would accept the evidence of Mr Jan, noting what I have said about Mr Jan's evidence below. 745 I would also add at this point that I would place little, if any, weight on the asserted commercial success of Axent's variable speed limit sign, particularly in a regulated market. As already stated, this is a factor that must in any event be treated with caution in the context of obviousness. There was very limited relevant evidence and certainly nothing comparable to the evidence to which Laddie J referred in Haberman. Rather, this case is in this respect similar to Firebelt, where the High Court said, at [51], that the "evidence [of commercial success] relied upon is exiguous" and therefore not significant to the determination of whether there was an inventive step. 746 The evidence to which I have referred satisfies me that, on the balance of probabilities, no problem was overcome or barrier crossed by the adoption of a partially flashing annulus as the conspicuity feature to draw a motorist's attention to the need to reduce speed. The use of flashing lights in the corners of the signs was efficacious as a means of communicating information to a motorist. The evidence showed that the invention as claimed in claim 2 was no more effective as a means of communication at the priority date than the use of flashing amber lights. There was no evidence that the use of the flashing annulus feature involved cost savings, as Axent at one point suggested. There was also no evidence that the inclusion of this feature overcame some perceived technical difficulty. Furthermore, the earlier evidence to which I have referred in finding that before the priority date the ordinary skilled worker was aware that there were other options including a flashing annulus to draw a motorist's attention to the need to slow down also indicates that a person skilled in the art would have taken the steps leading from the prior art to the claimed invention as a matter of routine. 747 I also note that in his 16 October 2017 report, Mr Prasad stated that in his opinion "a sign with the ability to change the speed and annulus on an external sensor such as wind, light, pre-programmed time or control centre" had two benefits: (1) immediate changes to the signs without the need for intervention; and (2) integration in managed roads programs where significant safety and time saving benefits can be achieved by managing speeds and traffic flow along roads. It is, as the respondents noted, difficult to discern what Mr Prasad intended here, and I attach little weight to this evidence, also bearing in mind his own evidence that he was not involved in the design of electronic variable speed limit signs before the priority date and that he had only a limited understanding of how instructions to change speed limits could be communicated at that time. Indeed, this latter matter is borne out by his evidence that while he knew that road signs were remotely controlled, he was not aware that this in fact occurred within the electronic variable speed limit signs. 748 In any event, Mr Jan gave evidence that before the priority date it was common for a variable sign to be controlled by an in-built time clock and, further, at this time electronic signs, including variable speed limit signs, were also controlled from a central control centre. As to the last-mentioned matter, Mr Fontaine gave evidence to much the same effect. Mr Jan's evidence was, moreover, that before the priority date the West Gate Bridge included wind speed sensors that were used to control the variable speed limit signs. While those signs were electronically-controlled "tri-signs", the principle in relation to the control of electronic variable speed limit signs was relevantly the same. Mr Jan's evidence in this respect was consistent with that of Mr Bean. The additional matters to which Mr Prasad referred in his 16 October 2017 report were therefore obvious before the priority date. 749 Lastly, the evidence was clear that, apart from the flashing annulus feature, the other features of the claims of the specification of the Patent in suit were obvious as at the priority date. Axent did not argue to the contrary. 750 For the foregoing reasons, I find that each of the claims lacks inventive step by reference to the common general knowledge alone.

Lack of entitlement 751 In view of my conclusion about lack of inventive step it is strictly speaking unnecessary to consider the respondents' lack of entitlement claim. For completeness, however, I shall briefly consider this ground and the best method ground. 752 At the applicable time, s 138 of the Patents Act relevantly provided: 138 Revocation of patents in other circumstances (1) Subject to subsection (1A), the Minister or any other person may apply to a prescribed court for an order revoking a patent. … (3) After hearing the application, the court may, by order, revoke the patent, either wholly or so far as it relates to a claim, on one or more of the following grounds, but on no other ground: (a) that the patentee is not entitled to the patent; (b) that the invention is not a patentable invention; … (4) A court must not make an order under subsection (3) on the ground that the patentee is not entitled to the patent unless the court is satisfied that, in all the circumstances, it is just and equitable to do so. 753 It was for the respondents (being the parties alleging lack of entitlement) to show that the patentee (Axent) was not entitled to the Patent: see JMVB Enterprises Pty Ltd v Camoflag Pty Ltd [2006] FCAFC 141; 154 FCR 348 at [57]; also Reckitt Benckiser Healthcare (UK) Ltd v Glaxosmithkline Australia Pty Ltd (No 5) [2015] FCA 486; 112 IPR 273 (Glaxosmithkline (No 5)) at [207]-[208].

Section 138(3)(a) - "the patentee is not entitled to the patent" 754 In University of British Columbia v Conor Medsystems, Inc [2006] FCAFC 154; 155 FCR 391 at [20]-[23], Emmett J, with whom Stone J agreed (at [54]), held that s 138(3) was to be construed with regard to certain statutory prerequisites for the grant of a patent, relevantly, s 15(1). Section 15(1) relevantly provides: (1) Subject to this Act, a patent for an invention may only be granted to a person who: (a) is the inventor; or (b) would, on the grant of a patent for the invention, be entitled to have the patent assigned to the person; or (c) derives title to the invention from the inventor or a person mentioned in paragraph (b); or … 755 As s 15(1) indicates, a patent may only be granted to the inventor or someone claiming through the inventor. Relevantly for the present case, one of two inventors each responsible for a part of the invention cannot claim a patent over the total invention. This is because such a patent would confer upon him or her the benefit of that part of the invention for which he or she was not responsible: see Stack v Davies Shephard Pty Ltd [2001] FCA 501; 108 FCR 422 at [21]. 756 Various indicators of joint inventorship derived from United Kingdom and United States authorities were set out by the Full Court in Polwood Pty Ltd v Foxworth Pty Ltd [2008] FCAFC 9; 165 FCR 527, at [33]-[35], as follows: The entitlement to the grant of a patent as the inventor is not determined by quantitative contribution. The role of joint inventors does not have to have been equal; it is qualitative rather than quantitative. It may involve joint contribution or independent contributions. The issue is whether the contribution was to the invention. What constitutes the invention can be determined from the particular patent specification which includes the claims. … One criterion for inventorship may be to determine whether the person's contribution had a material effect on the final invention. It may be that an invention is made as part of a collaborative effort. In those circumstances, it would ordinarily follow that the collaborators are joint inventors of the product of the collaboration. In the present case, the subject of the patent application was not part of a continuing collaboration recognised as such by the parties. To ascertain the inventor for the purposes of entitlement to the grant of the patent it is therefore necessary to determine the contributions to the invention described in the patent application. The claims may assist in that determination, bearing in mind that the claims may be to less than the totality of the invention. It may also be appropriate to investigate the contributions to the inventive steps giving rise to the invention. (Italics in original) The above has been accepted as reflecting the proper approach to joint inventorship in Australian patent law: see University of Western Australia v Gray [2009] FCAFC 116; 179 FCR 346; 82 IPR 206 at [247]-[248]; Vehicle Monitoring Systems Pty Ltd v Sarb Management Group Pty Ltd [2020] FCA 408; 150 IPR 216 at [239]. 757 The Full Court in Kafataris v Davis [2016] FCAFC 134; 120 IPR 206 at [62] described the "two-part inquiry" in determining inventorship in the following terms: It is common ground arising from cases such as University of Western Australia v Gray (2009) 179 FCR 346[; 259 ALR 224; 82 IPR 206; [2009] FCAFC 116] … (at [221] and [237]) and Lee v Commissioner of Patents [2011] AATA 818 at [17], that determining inventorship involves a two part inquiry. The starting point is to analyse the inventive concept of the patent applications. The next step is to consider whether … the alleged co-inventor [] made contributions that had a material effect on the inventive concept.

Section 138(4) - Court must be satisfied revocation is "just and equitable" 758 Section 138(4) was enacted by the Raising the Bar Act and applies to revocation orders sought "in Court" on or after 15 April 2013: see Item 133(14) of Pt 2 of Sch 6; AstraZeneca FCAFC at [182]-[184]. The Raising the Bar Act also inserted s 22A into the Patents Act, which is to the effect that a patent is not invalid merely because the patent, or a share in the patent, was granted to a person who was, or was not, entitled to it. Prior to the enactment of s 138(4), if lack of entitlement had been established, a grant of a patent to such a person was liable to be set aside at the suit of any person against whom the patentee sought to enforce it: see Davies Shephard at [21]. 759 With respect to s 138(4), the explanatory memorandum to the Bill which enacted the Raising the Bar Act stated: This amendment is intended to provide that the default remedy for a defect in entitlement is not revocation of the patent. If the correctly entitled persons are available and willing to be recorded as inventors and have acted in good faith, the intention is that the patent would not be revoked. In such an instance a declaration of who is correctly entitled to the patent and an order for the rectification of the Register under section 192 would be more appropriate. However, there may be some instances where revocation is appropriate in all the circumstances. For instance, if none of the persons to whom the patent was granted are correctly entitled to the patent, revocation may be appropriate. Similarly, if the correctly entitled persons have not acted in good faith or have been grossly negligent in permitting the patent to be granted to incorrectly entitled persons, revocation may be appropriate. However, it is intended that revocation is the exception, rather than the rule. Rares J considered what was meant by "just or equitable" in s 138(4) with respect to the circumstances of that case in GlaxosmithKline (No 5): see at [232]-[236].

Parties' submissions on lack of entitlement 760 The respondents' primary submission was that Axent was not entitled to the Patent because each claim of the Patent (other than claims 12 and 13) was wholly derived from VicRoads, through provision to Axent of the September 2001 specification. Shortly prior to the commencement of the hearing, the respondents further submitted that lack of entitlement may, in the alternative, arise because of joint inventorship; that is to say that VicRoads and Axent were co-inventors of any invention and, accordingly, Axent was not entitled to the Patent. 761 In closing submissions, the respondents submitted that even if Mr Fontaine had the idea for the partially flashing annulus, the invention was in the combination itself, and that "[i]t was VicRoads that specified the additional features forming part of the combination as claimed in at least each of claims 3 to 11, 14 to 16, and 21 to 28, which relevantly formed part of the combination as claimed". The respondents also disputed that Mr Fontaine was entirely responsible for the partly flashing annulus idea: they submitted that Mr Fontaine made a "suggestion" in conversation with Mr Bean, and that Mr Bean was left to take the idea back to VicRoads to consider whether the option would comply with regulatory requirements. VicRoads' input was, so the respondents, argued, "critical to the decision [] to adopt it". Accordingly, and as Axent had not procured any relevant assignments of interest from VicRoads, the respondents submitted it was just and equitable for the Patent to be revoked. 762 Axent submitted that the respondents' entitlement challenge failed, first, because VicRoads was not made a party to the proceeding and under s 139, no finding as to entitlement can be made in their absence. Axent further submitted that the respondents' submissions as to lack of entitlement were based in large part on the fact that the claims of the Patent and the VicRoads September 2001 specification were similarly worded and that this was an insufficient foundation for an entitlement challenge. Axent also submitted that VicRoads had no role in the making of the relevant signage; and that its role was limited to asking Mr Bean whether the product that Mr Fontaine had invented was legally compliant. This was, so Axent submitted, "wholly insufficient" to make Mr Bean (semble: or VicRoads) a co-inventor. Axent also sought to distinguish this case from Polwood on the basis that both the inventive concept and prototype were wholly Mr Fontaine's creation. Axent also submitted that the Court should not exercise its discretion under s 138(4). 763 Before turning to consider the parties' respective submissions, I note that Axent, having unsuccessfully opposed the respondents' inclusion of a co-inventorship argument (although confined to the same evidence as the respondents' primary submission) at a pre-trial case management hearing shortly before the principal hearing, renewed its submission in closing that, in effect, the respondents should not be permitted to raise their co-inventorship argument. In view of my conclusion on this issue, it is unnecessary to consider this matter further.

Lack of entitlement: consideration 764 I reject Axent's submission that the respondents were unable to pursue their lack of entitlement claim without joining VicRoads as a party to the proceeding under s 139(1) of the Patents Act. The purpose of s 139(1), as indicated in the authorities that have considered it, is to ensure that an exclusive licensee or a person claiming a contractual right to do some of the things comprised in the rights to exploit a patent, as a person "claiming an interest in the patent" for the purpose of s 139(1), is joined by the applicant for revocation as a respondent: see, e.g., Emory University v Biochem Pharma Inc [1998] FCA 915; 42 IPR 35 at 44-45; and Actavis Pty Ltd v Orion Corporation [2016] FCAFC 121 at [252]. When s 139(1) refers to "any person claiming an interest in the patent", it refers to a person who claims an interest in the patent from the patentee as an exclusive licensee or similar. This is clearly not claimed to be the case here. 765 The respondents' submissions proceeded on the basis that VicRoads was an (or the) inventor, as the September 2001 specification was devised by VicRoads' staff. It is relevant to note at this point that an employer is not always entitled to rights in inventions made by their employees: see, e.g., University of Western Australia v Gray at [152]-[157]. Leaving this difficulty aside, the evidence did not establish that VicRoads was the sole inventor. The partially flashing annulus was Mr Fontaine's idea. Not only did he propose it, he developed the prototype incorporating it. I accept his evidence in this regard, as well as the corroborative evidence of Mr Cestnik and Mr Bean. This evidence forecloses the conclusion that VicRoads was the sole inventor. 766 The evidence was also insufficient to establish that VicRoads was a joint inventor. Mr Bean's approval of Mr Fontaine's idea, with his confirmation of its regulatory status, was far from an act of joint inventorship. Mr Bean himself gave no evidence to the effect that he considered his actions to be those of an inventor; indeed the gravamen of his evidence was to the contrary. I infer from Mr Bean's evidence that he did not consider himself an inventor. I also observe that there was no direct evidence that Mr Fontaine had taken the claims of the Patent from the September 2001 specification. Rather, there were only the respondents' observations regarding the similarity of the language used in the specification and the Patent, from which the court was asked to infer co-inventorship. The sequence of events in this case may explain any linguistic similarity, but does not provide a cogent basis for inferring co-inventorship. In the circumstances of this case, I would not infer co-inventorship on this basis alone, especially having regard to the direct evidence of Mr Fontaine, Mr Cestnik and Mr Bean, which is to the contrary. 767 For the reasons stated, the respondents fell well short of establishing that Axent was not entitled to the Patent. Even if I had reached a different conclusion, the respondents made no submissions as to the basis on which revocation would be "just and equitable".

Failure to disclose best method 768 The best method requirement has a long history in patent law, having been a ground of appeal under general law before it was specified by legislative provision: see, e.g., Rescare at 133-135; Les Laboratoires Servier v Apotex Pty Ltd [2016] FCAFC 27; 247 FCR 61; 117 IPR 415 at [88] and Sandvik at [104] and [124]. At the applicable time, s 138(3)(f) of the Patents Act further provided that a patent might be revoked on the ground that "the specification does not comply with subsection 40(2) or (3)". At the applicable time, s 40(2)(a) required that "[a] complete specification … describe the invention fully, including the best method known to the applicant of performing the invention". 769 I interpolate here that s 40(2) was subsequently amended, most relevantly, by the Raising the Bar Act, which amended s 40(2)(a) so as to require: disclosure in a manner which is "clear enough and complete enough for the invention to be performed"; and s 40(2)(aa) so as to require: disclosure of "the best method known to the applicant of performing the invention". According to the explanatory memorandum, "the existing requirement for a complete specification to include the best method known to the applicant of performing the invention remains unchanged" under the Act as amended. Accordingly, cases considering "best method" under s 40(2)(aa) may also be relevant to construing the best method requirement under the applicable law: compare Dometic Australia Pty Ltd v Houghton Leisure Products Pty Ltd [2018] FCA 1573; 135 IPR 403 at [200]. 770 The best method requirement requires the patentee to disclose information not already known to the skilled addressee by way of the common general knowledge that is required to perform the invention in the best manner known to the patent applicant as at the date the complete specification is filed: Generic Partners at [186]; Pfizer Overseas Pharmaceuticals v Eli Lilly & Co [2005] FCAFC 224; 225 ALR 416; 68 IPR 1 at [379]. The purpose of the best method requirement is to ensure that the patentee is not given the benefit of a monopoly without the public being given the corollary benefit of the best method for performing the invention: see, for example, Servier at [64]. 771 As the best method requirement pertains to disclosure of "the invention", the starting point is to identify the invention, as described by the specification as a whole: Sandvik at [117]; Servier at [124]. The best method of carrying out an invention does not have to be claimed or identified as such, but it does have to be described: Sandvik at [127]. The disclosure should relieve the skilled addressee of having to make choices as to the achievement of the invention: Servier at [124], [134]. 772 In Firebelt Pty Ltd v Brambles Australia Ltd [2000] FCA 1689; 51 IPR 531, the Full Court said at [53]: The requirement of s 40(2) of the Act is that the patentee is required to give the best information in his power as to how to carry out the invention. That requirement is ordinarily satisfied by including in the specification a detailed description of one or more preferred embodiments of the invention offered, with reference to drawings of specific mechanisms or structures or examples of specific process conditions or chemical formulations, depending on the field of the invention and the nature of the instruction to be conveyed. It is necessary to have regard to what is the invention claimed in the petty patent. (Italics in original) See also Sandvik at [115]; Servier at [104]. 773 Difficulties can arise in ascertaining those features which are ancillary to the invention. Such Difficulties can arise in ascertaining those features which are ancillary to the invention. Such ancillary features do not form part of the "invention" for the purposes of the best method requirement. For example, in Sandvik the Full Court was called on to consider an argument that Sandvik had failed to disclose the best method for a water seal, Sandvik having said that the "sealing member" was not part of the invention. As to this, the Full Court said, at [124]-[125]: [W]e consider that the primary judge was correct to conclude that Sandvik had failed to describe the best method known to it of performing the invention. The invention described in the specification has been set out … . The best method of performing that invention (or carrying it into effect) known to Sandvik was to use a sealing member with upper and lower sections … rather than a purely horizontal sealing member. The specification purported to describe the best method of performing the invention by describing two preferred embodiments. But these descriptions did not include the best embodiment known to Sandvik; in particular, the drawing of the "preferred" drive chuck (actually, an adaptor) did not depict the best sealing member known to the inventors. … We do not accept Sandvik's submission that it was unnecessary to describe the sealing member because the water seal was not part of the claimed invention. First, as discussed above, for present purposes it is necessary to identify the invention described in the specification as a whole, as distinct from the invention as claimed in the claims. Secondly, accepting that the water seal is not itself part of the invention described in the specification, the use of an effective water seal is nevertheless necessary and important to perform the invention (or carry it into effect). This is made clear by the evidence of Mr Weaver to the effect that, in the development of Sandvik's extension drilling system which became the subject of the Patent, designing an effective water seal was a real issue which needed to be overcome. Thirdly, in circumstances where the specification purported to address the best method requirement by providing a detailed description of two preferred embodiments, it was incumbent on Sandvik to describe the best embodiment known to it. 774 As the above passage indicates, once the scope of the invention is determined, whether there has been adequate disclosure of the best method is a question of fact. The Full Court made this clear in Generic Partners, when it said, at [187] and [192]: Whether there has been a failure to make the required disclosure is essentially a question of fact. Every case will depend on its own facts including the nature of the invention, and the significance of what is and what is not disclosed. And like many other questions that arise in relation to the interpretation of a patent specification and the scope of its disclosure, the question whether there has been sufficient disclosure of the best method should be addressed in a practical and common sense manner. It is also necessary to have regard to the public policy justification that supports the best method requirement. … Whether or not it will be open to the patent applicant to not disclose relevant information on the basis that it is available to the skilled addressee by routine experimentation will depend on the importance of the information in question, the practicality of disclosing it, and the extent of the burden imposed on the skilled addressee who is left to rely upon routine experimentation. That question is, as we have already mentioned, to be addressed in a practical and common sense manner.

Parties' submissions 775 The respondents submitted that Axent had failed to disclose the best information known to it as to how to perform the invention as at the date it filed the complete specification in October 2003 and, accordingly, the Patent should be revoked under s 138(3)(f). The respondents relied on Mr Fontaine's evidence that there had been a range of hardware, firmware and control software work undertaken as part of the Western Ring Road Project. They characterised this work as being to "effectively implement the concept of a partly flashing annulus into a functional sign". They submitted that none of this work had been disclosed in the Patent, and sought to illustrate this submission by reference to two "examples", namely, Axent's failure to disclose the white LEDs and the type of controller it selected. Both selections, so the respondents submitted, were significant to the invention, the first by enabling "useful visibility" and the second, by making the sign more compact. 776 Axent disputed that these features were required to be disclosed on the basis the invention was "that the signs have a partly flashing annulus". Axent maintained that the use of LED lights was already known; and, in any event, that there was sufficient disclosure as to the preferred luminance and chromaticity of the signs. In closing submissions, counsel for Axent submitted that: [T]here was no suggestion that a person skilled in the art couldn't make a sign with a partly flashing annulus, using the common general knowledge, and that is what the cross-claimants need to prove to establish this ground. They haven't done so. Their evidence in fact is that Mr He was well on the way and could do so. Not sure whether he would have used an SY98012B, or the particular white LEDs that Axent used, but it doesn't matter. The invention, the inventive concept is producing these different frames. Mr Bean's evidence at transcript 151.43, he assumed that if one company could build a sign, then the others could too, and that's absolutely right on the common general knowledge. It's not suggested that others didn't know how to build a sign with parts flashing. There's no evidence to that effect. … [T]here's no evidence and it will be for the cross-claimants to prove that you couldn't make such a sign using the common general knowledge at the time. It's also relevant in that context talking about all traffic lights were LED by 1999. That's Mr Bean's evidence at paragraph 11 in court book 1018, but I don't - making - in other words, making a flashing LED sign however you wanted to set it out, was part of the common general knowledge. There's no need for Axent to disclose the LED types or the controller types because the invention is that the signs have this feature. It's not how that's achieved and the patent itself specifically contemplates that it could be achieved by a fibre optic sign or an LED sign.

Failure to disclose best method: consideration 777 In the present case, the invention was the use of a flashing annulus within a regulatory electronic speed limit sign to communicate a reduction in the speed limit to a motorist on a roadway. The specification of the patent included a detailed description of a preferred embodiment of the invention, illustrated by reference to two drawings. In this way, the patentee would ordinarily satisfy the best method requirement. Neither white LED lights nor a specific controller were part of the invention, and the evidence was that the use of LEDs and fibre optics in road signs was part of the common general knowledge of the skilled worker at the time. There was also evidence that a control means, whether by time-clock or a control centre, was also known to the skilled worker at the time. To the extent that luminosity and chromaticity were important for the invention, the specification in fact made detailed disclosures by reference to both LEDs and fibre optic display matrix: see pp 9-10. 778 The critical difficulty for the respondents with respect to their submission that Axent failed to disclose the best method is that this is essentially a factual question, with respect to which they bore the onus of proof. Bearing the above matters in mind and having regard to all the relevant evidence, the respondents have simply not adduced sufficient evidence to show to the requisite standard that the skilled addressee would be unable through routine experimentation and without undue effort to determine the appropriate LEDs and controller for an electronic speed limit sign with a partially flashing annulus. There was no evidence to show that, with respect to any other feature, the patentee failed to disclose the best method. 779 The respondents focussed on a relatively limited part of Mr Fontaine's evidence, but Mr Fontaine's evidence must be assessed in light of all the evidence in the case. As already indicated, this did not support the proposition that the skilled addressee would have any particular difficulty with respect to either a controller or LEDs, or in working the invention in any other respect. Further, Mr Fontaine's evidence merely identified the benefits of these features, but this is not the same as showing that these features were significant to the performance of the invention. As indicated earlier, it also seemed to me that Mr Fontaine was on occasion given to overstatement in the evidence he gave. In any event, the evidence did not establish that the specification did not disclose the invention in a clear enough and complete enough manner for the invention to be performed by a skilled person without undue difficulty. 780 The respondents sought revocation on the basis of lack of best method, but they have failed to discharge their burden of proof in this regard. Accordingly, I reject their submission that the court should revoke the Patent on this basis.

Evidentiary issues 781 Axent objected to the admissibility of SVS-19 to Mr Sozio's 8 March 2018 affidavit and to SVS-20 and SVS-23 to Mr Sozio's 28 March 2018 affidavit. These were the Futura Controls documents. Axent also objected to ZQH-3, ZQH-5-ZQH-10, ZQH-12 and ZQH-13 to Mr He's 28 March 2018 affidavit. Axent submitted that little weight should be given to Mr Jan's evidence. 782 The respondents argued for the admissibility of the Futura Controls documents and the challenged exhibits to Mr He's 28 March 2018 affidavit, and submitted that Axent's attack on Mr Jan's evidence was misplaced. 783 Further, notwithstanding Axent's previous interlocutory discovery applications and the decisions concerning them and a lengthy period of pre-trial preparation, Axent challenged the respondents' conduct of the proceedings, including their compliance with orders for discovery. For this purpose, Axent, sought to have admitted into evidence a list of annexures to the 3 November 2017 affidavit of Axent's solicitor, Mr Charles Leonidas, and the documents in that list. The respondents submitted that this material should not be admitted. As well, Axent sought to have the 30 April 2018 affidavit of Mr Leonidas, with its annexures, admitted into evidence. 784 I note at this point that, in its admissibility submissions, Axent sought to meet the respondents' objection to the admissibility of the respondents' instructions to their customers. This was referred to by the parties as the "section 117 evidence". For the reasons already stated, it is unnecessary to consider s 117 of the Patents Act and the evidence that was said to be relevant to it. I also note here that, in Axent's admissibility submissions in reply, the court was informed that the parties agreed that the document marked as "MFI-1" at the hearing should be admitted into evidence and given an exhibit reference (which shall be "A22") to assist in understanding Mr Taranto's evidence.

Futura Controls documents 785 As already stated, Axent objected, on hearsay grounds, to the admission into evidence of SVS-19, SVS-20 and SVS-23. This objection was addressed in part in a ruling made at the hearing: see Axent Holdings Pty Ltd v Compusign Australia Pty Ltd (No 5) [2018] FCA 675 (Axent (No 5)). As there stated at [5]: SVS-19 is a design drawing identified as FUT.278 and part of the summary index to the designs apparently provided by Mr Trebilcock to Mr Sozio with the drawings. SVS-20 is a design drawing, FUT.312, and what appears to be the entirety of the summary index provided by Mr Trebilcock to Mr Sozio. I would add here that SVS-23 is a design drawing identified as FUT.321. 786 Axent's objection is evidently not sustainable in at least two regards. First, Mr Sozio gave evidence at the hearing that he had seen the series of drawings identified as FUT.312 (SVS-20) and was familiar with them. His evidence was that he knew them to have been prepared for Hi-Lux for its tender for the Western Ring Road Project. The date in the accompanying "Summary of CAD Drawings - Indexed and reviewed in February 2002" (discussed below) indicates that the drawings were prepared on 15 November 2001, which is consistent with Mr Sozio's evidence as to their purpose. The respondents relied on Mr Sozio's non-hearsay evidence in relation to the drawings marked FUT.312 (SVS-20) to prove that Hi-Lux had drawings prepared for it to facilitate its tendering for that Project. I accept that, as the respondents submitted, this evidence was not hearsay evidence, and Axent's objection is not sustained with respect to it. The documents in SVS-20 are admissible for the purpose the respondents identified. 787 Secondly, Mr Sozio also gave evidence that he recognised the drawing identified as FUT.321, and dated 23 July 2002 (SVS-23). His evidence was that he recognised the drawing as a drawing prepared for Hi-Lux to facilitate its provision of variable speed limit signs using LEDs with a partly flashing annulus about this time. The respondents' purpose in tendering the drawing (SVS-23) was to establish that Hi-Lux had drawings prepared for this purpose at this time. Mr Sozio's evidence in this regard was not hearsay evidence, and Axent's objection is not sustained in this respect. 788 I turn now to the other aspects of the evidence to which Axent objected. Reference to the transcript of the hearing and Axent (No 5) shows that the focus of the parties' submissions was on ss 63 and 67 of the Evidence Act. In their written submissions, Axent again continued to focus on whether the court should exercise its power under s 67(4) of the Evidence Act to admit the documents in dispute under s 63 despite the respondents' failure to give the notice required by s 67. For the reasons I am about to state, it seems to me that this focus was misconceived. 789 In addition to addressing ss 63 and 67, the respondents referred to s 69(1) of the Evidence Act, which also provides for an exception to the hearsay rule. I am of the view that this provision was applicable with respect to the Futura Controls documents. Section 69 provided: (1) This section applies to a document that: (a) either: (i) is or forms part of the records belonging to or kept by a person, body or organisation in the course of, or for the purposes of, a business; or (ii) at any time was or formed part of such a record; and (b) contains a previous representation made or recorded in the document in the course of, or for the purposes of, the business. (2) The hearsay rule does not apply to the document (so far as it contains the representation) if the representation was made: (a) by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact; or (b) on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact.' … (5) For the purposes of this section, a person is taken to have had personal knowledge of a fact if the person's knowledge of the fact was or might reasonably be supposed to have been based on what the person saw, heard or otherwise perceived (other than a previous representation made by a person about the fact). In cl 1 of Pt 2 of the Dictionary, "business" is defined, for the purposes of the Evidence Act, to include "a profession, calling, occupation, trade or undertaking", and as including a business "that is not engaged in or carried out for profit". 790 I referred to Mr Sozio's affidavit evidence in Axent (No 5). In particular at [3]-[4], I said: In his affidavit filed on 8 September 2017, Mr Sozio deposed that he has located computer-aided drawings amongst Hi-Lux's records and that these drawings were given to him by Mr Robin Trebilcock. Mr Sozio further deposed that Mr Trebilcock and Mr Sozio worked together at AWA until Mr Trebilcock left AWA to start a business called Futura Controls. The drawings in question in this ruling bear the name of Futura Controls. In his first affidavit, Mr Sozio further deposed that Futura Controls did the designs for all fibre optic signs that Hi-Lux manufactured from about 1991 until Mr Trebilcock sold the business about 2008. Mr Sozio also deposed that Mr Trebilcock gave him the "CAD designs for Hi-Lux to use." In his second affidavit filed on 8 March 2018, Mr Sozio deposed that Mr Trebilcock died in 2013. 791 Mr Sozio gave evidence at the hearing that he had direct dealings on behalf of Hi-Lux with Mr Trebilcock for Futura Controls, and that while at Futura Controls Mr Trebilcock did drawings for Hi-Lux. Mr Sozio's evidence was that, apart from Mr Trebilcock as the principal and proprietor of Futura Controls, the only other person who worked at Futura Controls at the relevant time was Mrs Beth Trebilcock, who performed secretarial work, took orders and did the invoicing. Aside from this, Mr Sozio said that there was only one other person who worked for Futura Controls, being a person who had assisted Mr Trebilcock "as they got busier" before the business ceased in 2008. 792 I accept Mr Sozio's evidence that he received the computer aided drawings (CADs) (SVS-19, SVS-20, SVS-23) from Mr Robin Trebilcock, whom Mr Sozio knew to be the proprietor of Futura Controls and the maker of its drawings, and that Mr Trebilcock gave Mr Sozio the drawings in 2008 following Mr Trebilcock's retirement and before his death in 2013. I also accept Mr Sozio's evidence that, at or about the same time, Mr Trebilcock provided Mr Sozio with the index of drawings, Summary of CAD Drawings (SVS-20). 793 On the basis of Mr Sozio's evidence, I find that Mr Trebilcock was the sole proprietor of Futura Controls, and that he was also the author of the drawings done for Futura Controls. I find that either Mr Trebilcock or his wife made the Summary of CAD Drawings. On the basis of Mr Sozio's evidence, I find that the drawings and the Summary of CAD Drawings were records belonging to and kept by Futura Controls in the course of, and for the purposes of, a business within the meaning of s 69(1)(a)(i) or had "formed part of such a record" within the meaning of s 69(1)(a)(ii) before being given to Mr Sozio by Mr Trebilcock. Further, each of these documents contains a previous representation made and recorded in the document in the course of, or for the purposes of, the business within the meaning of s 69(1)(b). 794 I accept that, as the sole proprietor of the business of Futura Controls and author of the drawings, Mr Trebilcock made representations in the drawings about what they depicted and, sometimes, for whom they were prepared. I find that he was, at the relevant time, a person who had, or might reasonably be supposed to have had personal knowledge of these asserted facts, for the purposes of s 69(2)(a) of the Evidence Act. 795 I also accept that, as the sole proprietor of the business of Futura Controls and the maker of the Summary of CAD Drawings, Mr Trebilcock made representations in that document about the date on which particular drawings were created. I find that he was, at the relevant time, a person who had, or might reasonably be supposed to have had personal knowledge of these asserted facts, for the purposes of s 69(2)(a) of the Evidence Act. Alternatively, as the provider of secretarial assistance to her husband (in a business conducted by him) I accept that Mrs Trebilcock made representations in the document on the basis of information supplied by Mr Trebilcock, being a person who had, or might reasonably be supposed to have had personal knowledge of the asserted fact. It follows from this that I am satisfied that the requirements of s 69(2) of the Evidence Act were met, and that the Futura Controls documents (SVS-19, SVS-20 and SVS-23) were admissible as business records. This is so even though the documents were not produced by an officer of Futura Controls but by Mr Sozio for Hi-Lux: compare Tubby Trout Pty Ltd v Sailbay Pty Ltd (1992) 42 FCR 595 at 599-600 and Trade Practices Commission v TNT Management Pty Ltd (1984) 56 ALR 647 at 649. 796 As Heerey J said in Guest v Federal Commissioner of Taxation [2007] FCA 193; 65 ATR 815 at [25]: The terms of s 69(2)(a) do not suggest that it is an essential precondition of admissibility that the "person" in question be identified. The ordinary meaning of the language is that it is sufficient that the person who made the representation, whoever he or she is, had or might reasonably be supposed to have had, personal knowledge of the asserted fact. The policy behind the provision is clear enough. Routine business records, made before any legal proceeding arises or is contemplated (cf the exception in s 69(3)), have an inherent likelihood of reliability which outweighs the common law's aversion to hearsay evidence where the maker of a statement cannot be tested by cross-examination. The utility of s 69 would be greatly diminished if it were necessary to locate among large organisations, perhaps over a long period of time, persons who made representations, often in circumstances where the practical needs of the organisation did not require any identification at the time the representations were made. This passage was cited recently by Steward J (with whom Greenwood and Logan JJ agreed) in Commissioner of Taxation v Cassaniti [2018] FCAFC 212; 266 FCR 385 at [66]. It is consistent with this, so it seems to me, that a business record can be adduced in evidence as an exception to the hearsay rule even if the business no longer exists and the evidence is not adduced either by the maker of the document or a representative of that business, provided the court is satisfied that the representation was made "by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact". There may, of course, be circumstances in which the fact that the business no longer exists or the evidence is not be adduced either by its maker or a representative of the business has the result that s 69(2)(a) cannot be satisfied. This is not, however, the case here. 797 It is in this circumstance unnecessary to consider the application of s 63 of the Evidence Act, which provides another exception to the hearsay rule in certain cases where the maker of a previous representation is not available to testify about asserted facts. Since, however, the parties focussed on this provision, I would address it briefly. For present purposes it may be accepted that Mr Trebilcock is a person who has made a previous representation and who is "not available to give evidence about an asserted fact" for the purposes of s 63(1): see the Dictionary to the Evidence Act, Part 2, cl 4. In such circumstances, the hearsay rule does not apply to "a document so far as it contains the representation": s 63(2)(b). 798 Axent's objection to the admissibility of the evidence under s 63 relied on the fact that the respondents had not given the notice required by s 67. Section 67(1) of the Evidence Act provides that the exception to the hearsay rule found in s 63(2) does not apply to evidence adduced by a party, unless that party has given "reasonable notice in writing to each other party of the party's intention to adduce the evidence". Section 67(2) provides that a notice under s 67(1) is to be given in accordance with any regulations or rules of court made for the purposes of s 67. Section 67(3) provides that the notice must state the particular provisions of Div 2 of Pt 3.2 of the Act on which the party intends to rely in arguing that the hearsay rule does not apply to the evidence. 799 In the present case, a notice would have been required to identify s 63(2)(b) as the provision on which the respondents intended to rely. The respondents also needed to comply with r 30.29 of the Federal Court Rules 2011 (Cth) (FCR) and regulation 5 of the Evidence Regulations 1995 (Cth). Regulation 5 required a notice to state certain matters, including the substance of the hearsay evidence intended to be adduced and particulars of the representation made. Furthermore, r 30.29 provided that notice of the intention to adduce evidence of a previous representation must be in accordance with Form 62, and may have attached to it an affidavit that sets out evidence of the previous representation. Rule 1.34 provided, however, that compliance with the FCR may be dispensed with. 800 It was not in dispute that no notice had been given in accordance with s 67(1). If notice is not given as required by s 67(1), nonetheless under s 67(4) the court may, on application, direct that s 63(2)(b) apply "despite the party's failure to give notice". Before making a direction under s 67(4) it is necessary to have regard to each of the matters listed in s 192(2)(a)-(e). It does not appear to me that any of those matters militate significantly against the making of such a direction. Furthermore, in connection with the first of the Futura Controls drawings to which Mr Sozio referred in his 8 March 2018 affidavit, Mr Sozio specifically said in that affidavit that Mr Trebilcock had died in 2013. Axent did not dispute the respondents' statement that it was therefore on notice about the fact that the maker of the documents was not available to give evidence at least six weeks prior to the hearing at which the evidence was tendered. In all the circumstances it does not appear to me that Axent suffered any prejudice from the failure to provide formal notice. If it were necessary to do so, I would make a direction under s 67(4) that s 63(2)(b) applies to the Futura Control documents.

ZQH-3, ZQH-5-ZQH-10; ZQH-12 and ZQH-13 801 As already indicated, Axent objected to the admission into evidence of ZQH-3, ZQH-5-ZQH-10; ZQH-12 and ZQH-13 to Mr He's 28 March 2018 affidavit. 802 The document, which was annexure ZQH-3, was a copy of email correspondence between Compusign and Alstom in relation to the Western Ring Road Project. There was evidence, which was not in contest, that Alstom was the recipient of a tender pack for the Western Ring Road Project. Mr He's evidence was, and I accept, that Mr Logan Thurairatnam was an employee of Compusign at the relevant time. The respondents submitted, and I accept, that ZQH-3 was admissible as a business record under s 69 of the Evidence Act. 803 I accept that ZQH-3 was a record belonging to and kept by Compusign in the course of, or for the purposes of, a business within the meaning of s 69(1)(a) of the Evidence Act and contains a previous representation made and recorded in the document in the course of, or for the purposes of, the business of Compusign within the meaning of s 69(1)(b). At the relevant time, Mr Thurairatnam and Mr Ken Chan, for Alstom, was each a person who might reasonably be supposed to have had personal knowledge of the matters that they communicated in their emails, and of the fact of those communications, for the purposes of s 69(2)(a) of the Evidence Act. 804 The respondents submitted, and I accept, that annexures ZQH-5 to ZQH-10 were tendered for a non-hearsay purpose. That is to say, they were the subject of Mr He's direct evidence that they were drawings of the matters he described in evidence and created by him using a software package in January 2002. Although it was put to Mr He that the dates could have been manually changed, it was not put to him that they were in fact changed, or that his evidence as to their date of creation was incorrect. 805 The respondents submitted that ZQH-6 and ZQH-8 were tendered for the purpose of showing the date "01/2002". This was relevant, in their submission, because Mr He gave evidence that he had a practice of recording the date of the creation of the drawing into the design of the relevant PCB. I accept this submission. I would also accept that, as the respondents submitted, these drawings were admissible as business records under s 69 of the Evidence Act. 806 Mr He's evidence was that ZQH-12 was a screen shot from a computer program that he had created. I accept the respondents' submission that this is not hearsay evidence. 807 Mr He identified ZQH-13 as a copy of an invoice dated 27 February 2002 and a delivery note dated 4 March 2002, and his evidence was that he was familiar with the events to which it related and the documents in ZQH-13. The documents constituting ZQH-13 were admissible as business records under s 69 of the Evidence Act. 808 For the foregoing reasons, I reject Axent's objections to ZQH-3, ZQH-5-ZQH-10; ZQH-12 and ZQH-13. I would not exclude this evidence in exercise of the discretion conferred by s 135 of the Evidence Act, as Axent submitted should be done. It was not shown that the probative value of the evidence was substantially outweighed by the danger that the evidence might be unfairly prejudicial to Axent, misleading or confusing, or result in undue waste of time.

Mr Jan's evidence 809 The court ruled on the objections that Axent pressed with respect to Mr Jan's affidavit evidence at the hearing, with the consequence that at the close of the hearing there remained only the question of the weight to be accorded his evidence. While this question invariably arises at the close of any contested hearing with respect to the evidence adduced by the parties, with respect to Mr Jan's affidavit evidence, a relevant factor was some non-compliance with r 23.13 of the FCR: see Axent (No 4) at [13]. Of course, as I there noted at [11] the possible deficiencies did not mean that Mr Jan's evidence was inadmissible, and ultimately the parties accepted that the relevant defects went only to weight: see, e.g., Rush v Nationwide News Pty Limited (No 5) [2018] FCA 1622 at [36]-[41] and the authorities there cited. The same is true of any non-compliance with the Court's Practice Note concerning expert evidence (GPN-EXPT) and the Harmonised Expert Witness Code of Conduct. 810 During the hearing the parties agreed upon a list of email communications with Mr Jan and the respondents' legal representatives, which also indicated the date of the communication and the subject of it. The documents recording the communications were not, however, tendered and they were not put to Mr Jan in cross-examination. In this circumstance, I accept that, as the respondents submitted, they are not in evidence and that the list has no evident purpose beyond its status as an agreed list of communications, with an unarticulated relevance. 811 I would reject Axent's submission that Mr Jan was not an independent and impartial expert witness, whose evidence should be given little weight. I have already said that Mr Jan impressed me as a knowledgeable witness, with a sound recollection of relevant matters at the time he was working with VicRoads, which was before the priority date. A very great deal of his evidence was his direct evidence about what he had seen, heard or otherwise perceived or known prior to his retirement from VicRoads. Such evidence was unaffected by any failure to comply with r 23.13 of the FCR, GPN-EXPT, or the Code of Conduct. 812 In their submissions on admissibility, the respondents identified the passages in Mr Jan's 8 September 2017 affidavit (at [75]-[77]) and [78]-[98]) and in his 8 March 2018 affidavit (at [4]-[26]), in which he gave evidence in the nature of an opinion. In these passages and on other occasions in which Mr Jan gave an opinion, his stated opinion was evidently based on his specialised knowledge and experience of traffic signals and traffic management devices; the issues he addressed were clearly identified; and indeed so were his reasons for his opinion. Mr Jan confirmed on oath that he had read, understood, and complied with the obligations of an expert witness in relation to such matters, and it was not put to him in cross-examination that he had conducted himself inconsistently with these obligations. Mr Jan's evidence was (and I accept) that he had written his affidavits without interference from the respondents' lawyers. Furthermore, as I have already stated, Mr Jan impressed me as a thoughtful witness, who gave clear and balanced evidence. Aside from evidence previously ruled inadmissible, his evidence should be admitted, including any evidence in the nature of expert opinion evidence admissible as such under s 79 of the Evidence Act.

Annexures to Mr Leonidas' 3 November 2017 affidavit and accompanying list 813 During the hearing Axent sought to have the annexures to Mr Leonidas' 3 November 2017 affidavit and a list of the annexures admitted into evidence, and determination of this issue was left until after the hearing. Axent submitted that: The correspondence in the attached list goes to the following issues: a. the respondents' misrepresentation of the position in relation to the instructions given to its expert Mr Jan, including the content of the instructions he received and how he received them; and b. the respondents' ongoing non-compliance with the orders made by the Court as to discovery in September 2017, and its attempts to conceal rather than reveal the features of the relevant signage. 814 The respondents submitted that there was nothing to indicate that the correspondence was relevant to an assessment of Mr Jan's evidence or to an asserted failure to comply with discovery orders. The respondents further submitted that to the extent that Axent contended that the documents were relevant to the issue of flagrancy, since Axent had not made an election as to damages, the issue had not arisen. 815 I accept the respondents' submissions. The annexures consist of 90 pages of emails between the parties. Within these emails, the parties discussed the progress of the discovery process; proposals for further timetabling dates and orders; issues surrounding confidentiality; and advice regarding documents sought and provided. The list that Axent sought to include with the tender referred to 11 items of correspondence. Axent did not explain in what way these documents were relevant as it claimed, and I cannot discern their relevance. Various discovery-related issues were raised and resolved during the various interlocutory hearings prior to the trial. At most, this material indicated a contentious but unremarkable discovery process. Accordingly, the annexures to Mr Leonidas' 3 November 2017 affidavit and the accompanying list are not to be admitted into evidence.

Mr Leonidas' 30 April 2018 affidavit 816 Axent pressed for the admission of Mr Leonidas' 30 April 2018 affidavit in the event that the court rejected its objections to ZQH-3, ZQH-5-ZQH-10; ZQH-12 and ZQH-13 to Mr He's 28 March 2018 affidavit. Axent submitted that Mr Leonidas' 30 April 2018 affidavit was "important in setting the context for that evidence". It added that: This is because the affidavit sets out the attempts by Axent to obtain and to access the electronic files from which the exhibits to Mr He's affidavit were taken, and provides, to the extent that the information is available, the relevant printouts from the electronic files which show either the creation date of the original file (for example in the case of the photographs which are ZQH-11, annexure CL-24 … shows the date on which the electronic file records those photographs as having been saved) or the absence of such a creation date (see for example CL-25 and CL-26). It is relevant to: a. The weight to be given to Mr He's evidence (if admitted); and b. Axent's application for an adjournment of Mr He's cross-examination unless and until it had the opportunity to forensically examine the underlying electronic filed. 817 The respondents made no specific submission in opposition to the admission of Mr Leonidas' 30 April 2018 affidavit. I would admit this affidavit and its annexures. For the most part, the affidavit and its annexures can be considered relevant to the assessment of Mr He's evidence and, in particular, the significance of the above-mentioned annexures to his affidavit.

Disposition 818 For the reasons stated above, Axent did not make out its case on infringement. If am wrong about this in any respect, it will be seen that, for the reasons stated, Compusign succeeded (at least provisionally) in its innocent infringement defence. All respondents succeeded on the lapsed patent defence and failed on their other defences. 819 Also for the reasons stated, the respondents/cross-claimants succeeded in establishing that the Patent was invalid for lack of inventive step and that claims 1, 9, 10, 14, 15, 16, 17, 20 and 27 were invalid for want of novelty. The Patent should, accordingly, be revoked pursuant to s 138(3)(b). The respondents failed in establishing their other invalidity grounds. I certify that the preceding eight hundred and nineteen (819) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Kenny.