[1994] FCA 1168; (1994) 51 FCR 260

Patents - Petty Patent - Computer Program - Word Processing of Chinese Language Characters - Whether Manner of Manufacture - Novelty - Fair Basing - Infringement - Anticipation by Alleged Infringement.

Patents Act 1990, ss. 18, 40.

National Research Development Corporation v Commissioner of Patents [1959] HCA 67; (1959) 102 CLR 252.

Coopers Animal Health Australia Limited v Western Stock Distributors Pty Limited (1987) 15 FCR382

Tate v Haskins [1935] HCA 40; (1935) 53 CLR 594.

International Business Machines Corporation v Commissioner of Patents (1991) 33 FCR218.

Counsel and Solicitors Mr D.K. Catterns QC and Mrs D.A. Mullins

for the Respondents: instructed by Bennett and Philp

1. Orders that the declaration and orders 1 and 2 made 24 December

1993 on the revocation application be set aside.

2. Declares that, without prejudice to the effect of any order which

may be made upon an amendment application made pursuant to order 3

hereof, Petty Patent No. 616, 154 is and always has been invalid.

3. Orders that the appellants have liberty to make to a Judge of the

Court, within 21 days of the making of these orders, such

application under s. 105 of the Patents Act 1990 to amend Petty

Patent No. 616154, as they may be advised, and that the parties

have liberty to apply to a Judge of the Court for further orders

to give effect to the Reasons for Judgment delivered today and to

any Reasons for Judgment upon any such amendment application.

5. Orders that the appellants pay the costs of the respondents of the

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules

SPENDER, GUMMOW AND HEEREY JJ The Chinese language is a symbolic or ideographic language. On the other hand, English is an alphabetic language, in the writing of which a set of letters is used to represent the sounds of the language. Chinese uses many thousands of ideographic characters. Some 6,000 characters are listed in a commonly used Chinese-English dictionary; a vocabulary of about 3,000 characters will account for about 95% of those in everyday use. Alone or in combination the characters symbolise a particular concept or thing. Characters are composed of strokes written in a particular order. Each character comprises a particular number of strokes.

2. Technical advances, first the typewriter and then the computer, were readily adapted to the representation and then the storage and printing of English and other alphabetic languages. The adaption of the Chinese language has been more difficult. Broadly, the present case is concerned with the use of computer technology, for example in word processors, for the storage and retrieval of Chinese characters.

3. This is an appeal from orders made by a Judge of this Court (Cooper J) in a suit concerning Australian Petty Patent Number 616,154 ("the Petty Patent"). His Honour's judgment is reported[1993] FCA 653; , (1993) 27 IPR 577. The Petty Patent has as the title of the invention, "Symbol Definition Apparatus". The second appellant (Mr Thomas) is a director of the first appellant ("CCOM"). The third respondent (Mr Yates) is a director of the first respondent ("Jiejing") and the second respondent ("Paravet"). The fourth respondent (Dr Chappell) is also a director of Jiejing. Mr Thomas, Mr Yates and Dr Chappell all gave evidence at the trial.

4. The substance of the case for the appellants at the trial was that the respondents had infringed the claim of the Petty Patent by supplying, including by sale to third persons, products styled "Jiejing Documents Processor" and "Jiejing Character Word Processor" ("the Jiejing products"). These comprise computer programs with written instructions for use of the programs in combination with IBM, or IBM compatible, computers.

5. The primary Judge ordered, on a cross claim by the present respondents, that the Petty Patent be revoked. It followed that the appellants, the applicants below, failed in their claim of infringement. Moreover, his Honour held that even if the Petty Patent had been valid it would not have been infringed by the conduct of which the complaint was made.

6. On the appeal, the appellants challenged these adverse conclusions as to validity and infringement.

7. The ground upon which the primary Judge held the Petty Patent invalid was that it did not claim a manner of manufacture within the meaning of s. 6 of the Statute of Monopolies of 1623. However, his Honour also held that the true priority date of the claim of the Petty Patent was 22 July 1991, not, as alleged, 5 September 1988. The evidence shows that the acts of alleged infringement commenced on 8 December 1989, that is to say well before the priority date found by the primary Judge.

8. It would follow that the claim lacked novelty as the consequence of anticipation by the alleged infringement: Merrell Dow Pharmaceuticals Inc v N.H. Norton and Co Ltd (1994) RPC 1 at 13, per Aldous J. No holding to that effect was made by the primary Judge. However, on the hearing of the appeal we granted leave to amend the particulars of alleged invalidity so as to assert anticipation by the sale in Australia of the respondents' products before the priority date. We also granted leave to add as a further ground prior publication by reason of the publication on 2 April 1990 of an application by the appellants or their privies under the Patent Cooperation Treaty ("the P.C.T."). It will be necessary to refer later in these reasons to the nature of that publication.

9. The primary Judge dealt with certain publications relied upon as paper anticipations. His Honour held that none of these destroyed novelty. By their notice of contention the respondents assert that in respect of two of these items of prior art they should have succeeded at the trial in establishing anticipation. The two publications are United States Patent Number 4,379,288, which was published in Australia on 11 May 1983 ("the Leung patent"), and an article entitled "The Processing of Information in Chinese" published in Vol. 10 of the Australian Journal of Chinese Affairs p. 119, July 1983 ("the Lo/Barnea article").

10. The primary Judge dismissed the attack on validity based on the further grounds of false suggestion, and failure to describe the best method of performing the invention. Other grounds, including obviousness and ambiguity, had been abandoned at the trial.

11. The Petty Patent was sealed on 26 August 1991. The term of a petty patent is 12 months beginning on the date of the sealing thereof; Patents Act 1990 ("the 1990 Act"), para. 68(a). The term of the Petty Patent has expired. Section 69 provides for an extension of the term. Upon the present appeal, counsel described the question of extension as being "in abeyance" pending the outcome of the appeal; cf. Re Yamazaki Mazak Corporation [1992] APO 6; (1992) AIPC 90-879.

12. Section 63 of the 1990 Act provides that a patent may be granted to two or more nominated persons jointly. In the present case the patentees are Mr R.H. Thomas, (the second appellant), and Mr A. Garnham. The first appellant is an exclusive licensee (a term defined in Schedule 1 to the 1990 Act) and as such had the standing to institute proceedings for infringement (sub-s. 120(2)). That provision also stipulates that in such a case a patentee must be joined as a defendant unless joined as a plaintiff. However, a patentee joined as a defendant is not liable for costs unless that patentee has entered an appearance and taken part in the proceeding (sub-s. 120(3)).

13. As we have indicated, in the present case the applicants at first instance were CCOM and Mr Thomas. Mr Garnham was a director and shareholder of CCOM. He was joined only as a defendant. Nevertheless, the primary Judge made certain costs orders against him and in favour of the other respondents. This was on the footing that Mr Garnham had provided substantial funds to advance the litigation by the applicants, had given directions in the conduct of the litigation, and stood to gain financially if the applicants succeeded in it. Mr Garnham has not appealed from those orders.

14. In addition to the dispute as to infringement and validity of the Petty Patent, the trial also included allegations of copyright infringement. The present fourth respondent, Dr Chappell, by cross claim against the appellants alleged infringement of certain literary works. The primary Judge dismissed this claim on the footing that there had been no copying by the appellants. There is no appeal on copyright issues.

15. The present appeal raises a number of matters of patent law, some of which are attended by considerable detail. However, two matters stand out. The first concerns the concept of "manner of manufacture" as expounded by the High Court in National Research Development Corporation v Commissioner of Patents [1959] HCA 67; (1959) 102 CLR 252 ("the NRDC Case"). Of the Jacobean phrase, it has been said that since the NRDC Case it has been treated as calling for a decision as to what properly falls within the scope of the patent system, rather than as providing an occasion for investigating the meaning of "manufacture"; Cornish, "Intellectual Property; Patents, Copyright, Trade Marks and Allied Rights", 1st ed, 1981, p. 166. The learned author continues (167-8) by pointing out that two main ideas recur when distinguishing the categories of subject matter which may not be patentable. One is that techniques which relate to living organisms (including humans) may call for special treatment; it was this subject which divided the Full Federal Court in Anaesthetic Supplies Pty Ltd v Rescare Limited (Lockhart, Sheppard and Wilcox JJ, 5/5/94 unrep.). The other recurrent theme is that "intellectual conceptions become patentable only to the extent that they have been embodied in technical applications". The present appeal concerns this second aspect.

16. The second matter concerns the interrelation, particularly as regards fair basing and anticipation, between the petty patent and standard patent systems under the 1990 Act and the Patents Act 1952 ("the 1952 Act"). The present case, unusually, included detailed evidence by the appellants' patent attorney (Mr. J.K. Pizzey) which dealt with the genesis of the Petty Patent in circumstances commencing with an application for a standard patent dated 5 September 1988.

17. It is convenient to turn to this chain of events, as an understanding of it will be necessary to appreciate the submissions made on the issue of fair basing. It was accepted that the effect of s. 157A of the 1952 Act and s. 116 of the 1990 Act is that in interpreting the specification for the Petty Patent the Court may refer to the specification without amendment.

18. In August 1988 Mr Pizzey received instructions from the second appellant (Mr Thomas) and Mr Helmut Stohr to prepare a provisional specification for an invention with respect to the storing in and retrieval from a computer of Chinese characters to perform word processing. The instructions indicated that the invention could be applied to other languages. The provisional specification was drafted in wide terms to encompass the essential features of the invention but not so as to limit it to Chinese language processing. Messrs Thomas and Stohr were eager to have their application made so that the invention could be disclosed and exploited commercially. An application for a standard patent, together with a provisional specification ("the Provisional Specification") were filed and dated 5 September 1988. In February 1989, Mr Pizzey's firm again was consulted by Messrs Thomas and Stohr. They said that a disagreement had arisen between them and those who had been engaged to prepare computer software for the commercial exploitation of the invention. Mr Pizzey recommended that the applicants divide a petty patent application from the Provisional Specification. This advice was given because a grant of a petty patent might be obtained more quickly than would be the case with the pending standard patent application. Accordingly, a petty patent application and specification were prepared and filed 10 February 1989. This step was taken pursuant to s. 51 of the 1952 Act. To put it shortly, that section authorised an applicant for a standard patent to apply for a petty patent in respect of an invention or inventions disclosed in the provisional specification.

19. Mr Pizzey's evidence was that the petty patent specification lodged on 10 February 1989 was drafted in narrow terms "so as not to preclude the possibility of obtaining broad protection sought by the Standard Patent Application lodged 5 September 1988". The claim was limited to the application of the invention to the assembly of text in Chinese language characters. Upon this application, petty patent No. 583008 ("the first petty patent") was sealed on 13 June 1989. Thereafter, in September 1989, Mr Pizzey's firm received instructions from Messrs Thomas and Stohr to lodge a Patent Co-operation Treaty ("P.C.T.") application based on and claiming priority from the Provisional Specification lodged on 5 September 1988. The specification for the P.C.T. application utilises the Provisional Specification as the basis for the claims defining the invention. Section 58F of the 1952 Act provided that where, as in a case such as the present, an application for a standard patent had been lodged and not later than 12 months thereafter an international application had been filed, the priority date of the claims therein was the date of lodgement of the first application; however, the claims in the international application had to be "fairly based on matter disclosed" in the specification which had accompanied the first application. Here, the P.C.T. application was lodged just within time, on 5 September 1989. It was published on 2 April 1990.

20. In the meantime, there had been several important developments. The first supply of the Jiejing products took place on 8 December 1989 to Brisbane Grammar School, for use in the Asian Language Department. Hence the importance to the appellants of avoiding invalidity for anticipation by maintaining 5 September 1988 as the priority date of the claim of the petty patent in suit. To do so, it is necessary for the appellants to overcome the holding of the primary Judge that the claim of the Petty Patent is not fairly based on matter disclosed in the Provisional Specification. The publication of the P.C.T. application on 2 April 1990 also would destroy novelty unless the fair basing submission succeeds. That is to say, if the true priority date is later than 2 April 1990, novelty will have been lost because, as counsel for the appellants described it, the invention "will have been self prior published".

21. The second development concerned the first petty patent. This had been sealed on 13 June 1989. The grant was for a period of 12 months from that date. Section 68A of the 1952 Act so provided. An extension of term might be granted in accordance with the procedures set out in s. 68B. In particular, within 11 months after the sealing of a petty patent a person might inform the Commissioner of facts which that person asserted to establish one or more of a number of grounds of invalidity under sub-s. 100(1) of the 1952 Act. In due course the task of the Commissioner would be to determine whether the extension should be granted. The Commissioner would be obliged to grant the extension if not satisfied of the existence of any of those grounds. Within time, on or after 15 December 1989, Mr Yates and Dr Chappell informed the Commissioner of facts which they asserted established the invalidity of the first petty patent on a number of grounds in sub-s. 100(1).

22. The question of an extension of the first petty patent went to a hearing before a Delegate of the Commissioner on 7 September 1990. The decision was given on 6 February 1991 and is reported: Thomas v Chappell (1991) AIPC 90-798. The Delegate refused to extend the term of the first petty patent. He held that the claim was not directed to a "mere" idea or discovery, and that a practical application of the idea had been described and claimed. However, the Delegate went on to find that the claim was anticipated by 2 British specifications numbers 2,066,534, (published 8 July 1981), and 2,118,749, (published 2 November 1983). In each case, the inventors were Messrs Barnea and Lo. It will be recalled that these gentlemen are also the authors of the Lo/Barnea article unsuccessfully relied upon at the trial as anticipating the claim of the Petty Patent.

23. Following the decision of the Delegate, Mr Pizzey discussed with his clients the prospect of an appeal. Rather than appeal it was decided to proceed with the division of a further petty patent application and to maintain a priority based on the original standard patent application filed on 5 September 1988. In his affidavit dealing with the preparation of the further petty patent application, Mr Pizzey says (para 48):

"It was decided to alter the Specification in support of the

further Petty Patent -

(a) to clarify to the skilled addressee the prior art and

its differences to the claimed invention,

(b) introduce a more concise consistatory (sic) statement

into the specification in the same terms as the claim,

(c) expand on the description so that it was clear that

the reference to strokes and identifying means was a

reference to stroke-type categories as is clear to a

skilled addressee from the specification and diagrams

comprising the;

(i) Provisional Specification,

(ii) First Petty Patent Specification, and

(iii) P.C.T. International Specification."

24. The further petty patent application was dated 19 March 1991. It was accompanied by a specification. The applicants were Mr Thomas and Mr Stohr. The application was shown therein as having been made by virtue of s. 51 of the 1952 Act.

25. However, on 30 April 1991 the 1990 Act came into force. The effect of ss. 234 and 235 of the 1990 Act was that the new legislation applied to the application as if it had been made under a corresponding provision of the 1990 Act.

26. In a letter dated 19 March 1991 in support of the application then made, Mr Pizzey's firm drew the attention of the examiner to the first petty patent and to the decision of the Delegate dated 6 February 1991. After referring to the 2 British patents, the writer stated that the present specification had been "reworded to more clearly describe and claim the invention".

27. The first report of the examiner, dated 1 May 1991, referred to the two Barnea and Lo British specifications and stated that each citation published the invention now claimed. Further correspondence followed, leading to a hearing on 13 June 1991. The decision of the Hearing Officer issued 28 June 1991. The applicants were given a further opportunity to lodge a statement of proposed amendments, principally to meet what the Hearing Officer had described as three concerns on his part. The second of these was that the specification referred to each stroke as falling into one of 8 stroke-type categories. The amendments removed that limitation. This, as will appear, was a significant step for this litigation.

28. With the statement of amendments dated 22 July 1991 the specification reached its final state. On 11 July 1991, Mr Pizzey's firm forwarded an application for transfer of an interest in the application from Mr Stohr to Mr Garnham. The Petty Patent issued in the name of Mr Thomas and Mr Garnham on 26 August 1991. The proceeding in this Court was commenced shortly thereafter.

29. Before proceeding to consider objections to the validity of the claim of the Petty Patent, it is necessary to determine from the specification what exactly is the invention it describes and for which a monopoly is claimed: Welch Perrin and Co. Pty Limited v Worrel [1961] HCA 91; (1961) 106 CLR 588 at 609. It is not legitimate to construe the claim with reference to the alleged infringement: Ransburg Company v Aerostyle Limited (1968) RPC 287 at 297, per Lord Upjohn. Whilst it is the task of the claim to define the scope of the monopoly, it is legitimate to incorporate as part of the claim passages from the body of the specification by way of a "dictionary": Raleigh Cycle Company Limited v H. Miller and Company Limited (1948) 65 RPC 141 at 146; see also, by way of example, Populin v H. B. Nominees Pty Limited [1982] FCA 45; (1982) 59 FLR 37 at 43-4, where the claimed apparatus had "a planting unit having a relatively small bin (as hereinbefore defined) ... ".

30. The specification for the Petty Patent commences with several definitions. There is a dispute between the parties as to which part of the text comprises the definitions and which is merely general descriptive matter. In the passage set out below, the portions which are underlined are those which, on the submission of the respondents, contain the definitions:

"Chinese characters are formed from unique combinations of

Chinese character strokes. A Chinese character stroke is a

brush stroke of traditional Chinese calligraphy formed as a

single unbroken line between the point where the brush

touches the paper and the point where the brush is lifted

from the paper. The word "stroke" as used hereafter in this

specification, means a chinese character stroke as defined

above, unless another meaning is indicated as for example

when discussing certain prior art documents wherein the word

"stroke" does not necessarily mean a Chinese character

stroke as defined above.

Each character stroke may be considered to fall into one of

a limited number of character stroke-type categories or

families of character strokes that have common

characteristics. The expression "character stroke-type

category" as used hereinafter in this specification, means a

category of Chinese character strokes as defined above.

Each of these categories of character stroke types is

characterized by the size and/or direction of the character

strokes in the category.

In the book "Reading and Writing Chinese" written by

Professor McNaughton (1979, Charles E. Tuttle, Japan) eight

of these character stroke-type categories are described in

four pairs of character stroke-type categories. However, a

greater or lesser number of character strokes-types can be

categorised depending on the definition chosen for each

category.

A distinguished (sic) feature in each category is the

direction in which each character stroke is commenced, or

the directions in which each character stroke is commenced

and then continued after a change in direction.

Fifty character strokes may be used to form the most complex

characters, although most characters can be defined with

between six and twenty-one character strokes. Each

character has a particular character stroke count number

associated with it, although the official character stroke

count number can vary from the actual character stroke count

number in a small number of cases."

(Emphasis supplied)

31. As noted, the respondents submit that the definitional material comprises the passages underlined. The appellants submit that it also includes the material printed in italics. The primary Judge proceeded on the latter basis, as is apparent from the report, 27 IPR at 605.

32. In the specification for the Petty Patent as lodged and before amendment after the decision of the Hearing Officer on 28 June 1991, the comparable passage read:

"The word stroke means a brush stroke of traditional Chinese

calligraphy formed as a single unbroken line between the

point where the brush touches the paper and the point where

the brush is lifted from the paper.

Each stroke may be considered to fall into one of eight

stroke-type categories. Each stroke type is characterized

by its size and direction, and over fifty strokes may be

used to form the most complex characters, although most

characters can be defined with between six and twenty-one

strokes. Each character has a particular stroke count

number associated with it, although the official stroke

count number can vary from the actual stroke count number in

a small number of cases."

(Emphasis supplied).

It is apparent that in the later form of the specification, the eight character stroke-type categories are not treated as exhaustive; a greater or lesser number of categories may be used. The Jiejing products use 10 stroke-type categories. Thus, had the claim not been widened there would have been no infringement, whatever the fate of the other issues on which infringement was fought. But, as will become apparent, by broadening the claim there was opened up a debate as to fair basing.

33. The specification for the Petty Patent continues by explaining that whilst character strokes which form a character are added in a particular order, that order cannot be determined from the completed character. Further, characters include a group of 214 basic character components called "radicals". These are used with additional character strokes to form characters with meanings or sounds related to that of the radical contained in the character.

34. The adoption of mechanised writing of Chinese has been slow. A typical Chinese typesetting machine has 1,200 keys, compared with approximately 100 for an alphanumeric typesetter. Thus the Chinese typesetting machine is more costly and difficult to use. Moreover, it has not been possible to typeset many of the rarer characters.

35. The discussion in the specification of the Petty Patent of the problem to be overcome continues as follows:

"A further problem confronting users and students of the

Chinese language is the difficulty of finding the exact

shape and meaning of a character using a dictionary. The

primary access mode for a Chinese dictionary is by reference

to the official number of character strokes for that

character. Thus as a prerequisite the user must know the

character stroke count for the particular character. A user

must then search the section of the dictionary devoted to

characters with that official character stroke count number,

using the logical radical contained within the character to

further sub-divide the search category.

Word processing using Chinese characters presents a similar

problem, as hitherto it has been very inconvenient to define

the desired characters for input to the word processor using

a keyboard. Some Chinese word processors utilise digitizing

pads for their inputs, and the operators must draw the

characters by compiling character strokes one at a time on

the pad. Digitizing pads are expensive and require

considerable digital processing for relating the scanned

image on the digitizing pad to the character which was

intended."

36. In its final form, the specification goes on to consider, and distinguish, the proposals in the two Lo and Barnea British specifications. These are said to contain certain disadvantages and impracticalities. It will be recalled that in the Patents Office they had been held to anticipate the first petty patent. The specification then states:

"The present invention aims to alleviate the above

disadvantages and to provide computer processing apparatus

for assembling text in Chinese language characters which

will be reliable and efficient in use. Other objects and

advantages in this invention will hereinafter become

apparent."

37. There follows the consistory clause, then a detailed description of the preferred embodiment. It will be necessary to refer later in these reasons to certain portions of the description of the preferred embodiment.

38. Finally, there is the claim. This is as follows:

"Computer processing apparatus for assembling text in

Chinese language characters, said computer processing

apparatus including:-

a memory including character stroke data storage means

which stores data relevant to Chinese character

stroke-type categories, Chinese characters and the

order in which character strokes of respective Chinese

characters are written and complementary graphic data

storage means from which data relevant to the graphic

representations of each said Chinese character may be

retrieved;

display means for displaying Chinese language

characters retrieved from said graphic data storage

means;

a keyboard having a plurality of input entry keys

including character stroke-type category entry keys

designated by indicating means indicative of

respective ones of said Chinese character stroke-type

categories and selection means for selecting one of a

plurality of characters displayed by said display

means;

and wherein said character stroke data storage means

are searched by entering through said input entry keys

search criteria including the entered Chinese

character stroke-type categories and the order in

which the character stroke-type categories are entered

through said input entry keys, whereby upon entry of

said search criteria the graphic representation of the

or each Chinese character which meet said search

criteria are retrieved from the corresponding graphic

data storage means and displayed by said display

means; and

said selection means being operable to select one of

said retrieved graphic representations of Chinese

characters whereby text in Chinese language characters

may be assembled."

The dispute as to infringement turned largely upon the passages of the claim which we have emphasised.

39. The phrases which have been italicised, namely "character stroke" and "Chinese character stroke-type categories", as they appear in the claim are to be read with the definitions in the body of the specification. To that extent both sides are at one.

40. We do not accept the further submissions for the respondents that the definitional material is confined to that set out in the passage from the body which we have underlined, that all of the additional italicised material is provided by way of further elaboration, and that none of it identifies the essential qualities of that which is defined. In our view, the first of the italicised sentences is definitional; it uses the term "characterized" which is apt to give definitional content to "category" and it is the last of a three sentence paragraph. The term "as defined above" in the penultimate sentence of the paragraph draws in to the second definition the first definition, that of "Chinese character stroke".

41. It follows that the passage in lines 3-5 of the claim should be understood as if it read:

"A memory including means for storage of data of character

strokes, being brush strokes of traditional Chinese

calligraphy formed as a single unbroken line between the

point where the brush touches the paper and the point where

the brush is lifted from the paper, which stores data

relevant to categories of Chinese character stroke-types,

being families of the said character strokes which have

common characteristics, each category being characterised by

the size and/or direction of the character strokes in the

category ..."

42. The primary Judge accepted evidence that to the skilled addressee, the term "search" as used in the claim would be understood as a systematic examination of information in a data base with the aim of identifying items which satisfied particular pre-set criteria. Accordingly, his Honour held (27 IPR at 618), and we agree:

"I am satisfied that a skilled addressee would understand

the word "search" in the claim to mean a systematic

examination of information in the database stored in the

character stroke data storage means which stored data

relevant to Chinese character stroke-type categories,

Chinese characters, and, the order in which character

strokes of respective Chinese characters are written and a

like examination of the database stored in the corresponding

graphic data storage means from which data relevant to

graphic representations of each Chinese character could be

retrieved."

43. What is claimed thus involves use of input entry keys designated so as to indicate the respective Chinese character stroke categories chosen, and the entry through those keys of search criteria. Those criteria include Chinese character stroke categories entered in a particular order. Upon entry of those search criteria there are retrieved from the graphic data storage means and displayed by the display means, that or each Chinese character which meets the search criteria.

44. Hence, as Counsel for the respondents put it, what is claimed is a search of the data base by stroke category and by order, so that retrieval and display of Chinese characters are dependent upon satisfaction of search criteria of character stroke-type categories and the order in which those categories are entered through the input entry keys.

"As the claim requires the retrieval and display of all

Chinese characters which satisfy the search criteria upon

depression of the input entry key or keys and as a skilled

addressee would know that there may be thousands of

characters satisfying the search criteria, the skilled

addressee would understand that the search criteria would

have to be increased and the character stroke data means

searched until a point was reached where all the available

conforming characters were capable of being displayed within

the limits of the display means or the search was limited by

the addition of additional search criteria other than

Chinese character stroke-type categories and the order in

which character stroke-type characters are entered through

the input entry, such additional criteria itself being

entered through input entry keys. When the conforming

Chinese characters are displayed on the screen in

consequence of a search conducted of the character stroke

data storage means using search criteria including character

stroke categories and the order in which the character

stroke-type categories are entered through the said entry

input keys, there must be a means to select one of the

retrieved graphic representations of Chinese characters

whereby the text in Chinese language can be assembled."

In our view, his Honour was correct in construing the claim in this way. There was no challenge on the ground of inutility. The allegations of lack of clarity and ambiguity, contrary to the requirements of sub-s. 40(3) of the 1990 Act, were abandoned at the trial.

46. If it had been appropriate to refer to the body of the specification in construing claim 1, so as to define or clarify the meaning of terms which were otherwise ambiguous, this would have provided further support for the construction placed upon the claim by the primary Judge. In describing the preferred embodiment, it is said that the character information stored in the character storage unit includes an index using the numerical codes 1 to 8. These are allocated to the various character stroke-type categories or families along with character stroke order data, such as storage sequence of the character stroke numbers within the character information, together with the character stroke count number for that character. When the search mode of the keyboard is initiated, the processing unit flags all characters in the character storage unit. The pressing of one of the character stroke-type category entry keys will initiate a search of the character storage unit which will "unflag" (i.e. discard) all characters which do not begin with a character stroke in that character stroke-type category. When a second operation of one of the character stroke-type category entry keys is made a search is initiated of all remaining flagged characters. Characters not beginning with character strokes contained in the two character stroke-type categories and entered in the same order as they were entered are unflagged. The process may continue until only one character remains flagged.

47. The specification states "this character may then be displayed on the visual display unit ... for acceptance or rejection by the operator." A description of the embodiment continues with further matter which is not claimed. This is:

"Alternatively, the processing unit ... may be programmed to

display all flagged characters when only a small

pre-determined number such as four or eight remain. The

operator may then select the correct character by pressing

the appropriate one of the keys in the function key groups

..."

48. The primary Judge observed that the Petty Patent and the Jiejing program both sought to solve the same problem but came up with different solutions. Both used stroke-type categorisation input, in the order that strokes of that type ordinarily are written. However, the evidence indicated that it was inevitable that any efficient system of word processing in Chinese characters would involve the use of stroke categories in stroke order.

49. The primary Judge accepted the evidence of the third respondent, Mr Yates. This was that the Jiejing program does not involve systematic examination of the data base. Rather, it is based on pre-calculated tables of the frequency of use of Chinese characters, commencing with a stroke falling within one of ten stroke-type categories, or a combination of two or more strokes falling within two or more stroke-type categories in the order in which the character is written.

50. When the first stroke-type key is pressed, the program goes directly to the character addresses for all characters which commence with that stroke-type. The program then automatically selects and displays the predetermined five characters with the highest frequency of use. No "searching" is involved. If any character is uniquely determined by the first stroke it is selected first, irrespective of frequency. The processing of subsequent stroke keys leads to the display of the five most frequently occurring characters previously identified which have strokes in that order.

51. The claim in the Petty Patent does not claim as an essential feature the individual identification and display of unique characters. The primary Judge said (27 IPR at 624-5):

"Unique characters are displayed along with all other

characters which satisfy the search criteria. The fact that

they are unique is merely coincidental to the fact that no

further strokes are required to complete them. The (Petty

Patent) makes no attempt by means of a search to identify

and separately display any unique character. The

identification of a unique character in the (Petty Patent)

is left to the user of the computer identifying the unique

character from all of the characters displayed and using the

selection means to choose that character if it is the

desired character. That is, the search means does not

operate to find and isolate any unique character and tell

the user of the apparatus that it is a unique character;

the Jiejing program does so."

"The Jiejing program operates by reference to a "look up" or

"go to" table containing the addresses of each Chinese

character in the database represented by a particular

coding. The Jiejing program assigns a value to each

stroke-type category key and calculates the starting address and

ending address within the look up table for Chinese

characters which commence with the stroke falling within the

stroke-type category assigned to a particular key. Knowing

the start address and end address, all characters between

the two points are valid. Within the set of available

characters, each character is given an address represented

by a particular coding. The particular coding is determined

by the frequency of use of the character. It is an

algorithm which enables the program on the depression of the

first key to move directly to the character addresses.

Thereafter it is the selection of the five highest frequency

of use characters which takes the program to the addresses

of the five relevant Chinese characters which are then

retrieved and displayed on the screen. When a second stroke

is entered representing a second stroke-type category, the

program goes to the first character address of the character

which commences with stroke-type categories in the order

represented by those two key presses. This address is also

found from the character location table. Thereafter the

program selects the character addresses of the five

characters having the highest frequency of character use and

those characters are retrieved from the character database

and displayed on the screen."

52. His Honour accepted evidence that the computation of the relevant location table is performed prior to the first entry being made by the operator. When the program was loaded it automatically searched the data bases and constructed the "look up" or "go to" table which was valid for the first two key stroke-type category entries. The tables were constructed and entered into the program prior to the program being sold. The look up table does not form part of what is described in the claim of the Petty Patent as "the character stroke data storage means". It is not a data base which is systematically examined to identify all characters whose first and subsequent strokes fall within the category of stroke-types in the order entered by key input, so that all characters which satisfy the criteria are retrieved and displayed. It follows that there is a lack of an essential integer of the claim and the result is that there was no infringement.

53. Upon the appeal, Counsel for the respondents urged a further ground upon which it was said another essential integer was lacking. The claim requires the retrieval and display of the graphic representation of the one or each Chinese character which meets the search criteria. On the other hand, it follows from what has been said above that the respondents' program does not do this. Rather, it displays only the 5 most frequently used characters, or any unique characters which possess the strokes in the order so far entered.

54. In our view the primary Judge reached the correct conclusion that there was no infringement of the claim of the Petty Patent. This is because there were lacking the integers to which we have referred to above.

55. The appellants challenged the findings by the primary Judge as to the manner in which the Jiejing program operated. This appeared to involve a challenge to his Honour's acceptance of the evidence of Mr Yates. No ground was made out to justify such an attack. It plainly was open to accept Mr Yates, who gave evidence and was cross-examined in some detail. The Paravet help system was described by Mr Yates as the genesis of the Jiejing program. Mr Yates agreed that in a non-technical discussion with the second appellant, Mr Thomas, he had used the expression "flagging and unflagging" as a description of the working of the Paravet system. But, in his cross examination upon the characteristics of the Jiejing program Mr Yates was emphatic that no flagging occurs. His cross examination included the following:

"Well, does it not approach the characters from a stroke

type category through other stroke type categories until a

character is thrown up with a weighting? - The other stroke

type categories are completely immaterial at that point of

time. That is, all we have done is entered one stroke type

category. The computer knows where the first one of those

characters starts. It knows where the last one starts. It

knows that all characters in that area of memory of the

index are valid; that is, it knows already that they all

start with that character. It then checks each of those

locations for a value and then - that is a frequency value -

and selects the five highest value characters; then orders

those with the highest frequency character in the centre,

and with the reducing frequency on the left and right side.

So the one in the centre is the highest frequency, and so

on, with the two outside ones being the lowest frequency.

You could describe that as flagging all available

characters, could you not? - No flagging occurs."

"Once one key is depressed, all characters not commencing

with a stroke within the category of that key are excluded

from the operations of the Jiejing program from the point of

view of selection? - Well, excluded in the sense that

they're not included, yes.

Yes. They are not flagged? - No, no flagging involved.

Flagging is a process akin to what you would see when the

parking officer marks the tyres of the cars in the street.

That is, a mark applied or referenced to each particular

item. There is no - no such thing happens in this program.

Or no equivalent."

The appellants sought to support their arguments by reference to certain passages in a Jiejing manual for users. This is not a technical programming document.

56. In his evidence Mr Yates used the expression "unique character" to describe a character whose strokes matched all of the key strokes which had been entered at that particular time, no further strokes being required to complete that character. It was submitted for the appellants that because the Jiejing program would identify unique characters with a low stroke count, that is to say characters where one or two stroke type categories "inputted" by the entry keys would uniquely define the character and display it, there was an infringement of the Petty Patent. If so, it would follow that the presence of additional features would not save it from infringement: Martin Engineering Co v Nicaro Holdings Pty Limited (1991) AIPC 90-799 at 37,582-3 per Burchett J.

57. However, an argument to that effect was rejected by the primary Judge. He held that a unique character will not be displayed unless it falls within the 5 highest frequency of use characters which have first or second strokes in the stroke type categories which constitute the unique character; therefore, there was retrieval and display by frequency of use. In his cross-examination Mr Yates spoke of short simple characters with only a short sequence of strokes, with one, two or three strokes in most cases. He went on:

"The majority of them were only less than four strokes, and

those particular characters were all unique but of very low

frequency. So they're an odd set of characters, but that

situation has to be covered in case someone may want to

retrieve one of these characters, even though they're not

commonly used."

The evidence disclosed what might be described as an artificially high weighting for these unique characters but the same system, still based on frequency, applied. Mr Yates said that even if there is only one character available the first operation would still be to look at frequency.

58. The challenge to the holding that there was no infringement fails.

59. The ascertainment of the correct priority date of the claim of the Petty Patent involves a dispute as to fair basing. As we have indicated, some of the issues as to novelty in turn depend upon the true priority date.

60. It is accepted that, pursuant to reg. 3.12 of the Patents Regulations made under the 1990 Act, the earliest available priority date of the claim in the Petty Patent is the date of making the application for the standard patent on 5 September 1988. This is so if the claim is "fairly based on matter disclosed" in the Provisional Specification of that date. The primary Judge held that the claim was not fairly based upon matter so disclosed. That holding is challenged by the appellants and, for their part, the respondents put forward an additional ground as demonstrating a lack of fair basing. In order to appreciate the precise issues that arise and the authorities to which we were referred, it is appropriate to consider briefly what is involved in "fair basing" as it has developed in Australia.

61. The term "fairly based" was introduced into Australian patent law by ss. 40 and 45 of the 1952 Act. It was used to describe the relationship between the claims defining the invention and the matter described in the complete specification (sub-s. 40 (2)), and as a criterion for fixing the priority date of a claim of a complete specification fairly based on matter disclosed in the preceding provisional specification (sub-ss. 45 (2) and (3)). Other uses of the term in the 1952 Act, as amended, (for example, with international applications) are detailed in Rehm Pty Limited v Websters Security Systems (International) Pty Limited (1988) 81 ALR 79 at 94. Sub-s. 159(1) of the 1952 Act made it clear that disconformity on the ground that the invention claimed was wider than that of the specification was not of itself a ground of objection to grant or of invalidity; see Coopers Animal Health Australia Limited v Western Stock Distributors Pty Limited [1987] FCA 355; (1987) 15 FCR 382 at 388, per Fox J. This serves to emphasise the width and significance of the ground now covered by what in 1952 was the new concept of "fair basing".

62. As we have indicated, the phrase "fairly based" is carried over into the 1990 Act. In particular, claims must be fairly based on matter described in the specification (sub-s. 40 (3)), and the priority date of a claim may be determined as the date of making the "relevant application" in which the matter was first disclosed, if the claim is fairly based on that matter (reg. 3.12).

63. The term "fair basing" had been introduced into British patent law by ss. 4, 5 and 6 of the Patents Act 1949 (U.K.), and served the same functions as it was to serve in the 1952 Act. However, "fair basing" has disappeared from British patent law: Asahi Kasei Kogyo KK's Application (1991) RPC 485 at 510 (C.A.), 536-7, 546-7 (H.L.). Instead, sub-s. 14 (5) of the Patents Act 1977 (U.K.) ("the 1977 Act"), requires that claims "be supported by the description" of the invention in the specification. Further, para. 5(2)(a), which deals with priority dates, looks to the earliest relevant application which disclosed matter supporting the invention to which the application in suit relates. Subsection 130(7) states that these provisions were designed to give effect to the European Patent Convention of 1973.

64. The term "fair basing" was introduced in Britain and Australia after the growth of a body of case law dealing with two related but distinct propositions. The first was that a claim should not be wider than warranted by the disclosure made in the body of the specification. The second was that the complete specification should conform to the provisional specification. These requirements had their source in the history of English patent law: Tate v Haskins [1935] HCA 40; (1935) 53 CLR 594 at 606.

65. At the time of the introduction of the 1949 legislation in Britain, the authoritative opinion was expressed that the introduction of "fair basing" was not designed further to restrict the rights of patentees or applicants for patents, and that the meaning of "fair basing" was to be understood in the light of the earlier case law: "Terrell and Shelley on the Law of Patents", 9th ed., 1951, p.62. To understand that law, it is necessary to consider the evolution and function of claims, and the introduction of and relationship between provisional and complete specifications. Assistance to that end is provided by the joint judgment of Rich, Dixon, Evatt and McTiernan JJ in Tate v Haskins supra and the judgment of Lord Moulton, when a member of the Court of Appeal, in British United Shoe Machinery Company Limited v A. Fussell and Sons Limited (1908) 25 RPC 631 at 649-651; see also the article by Sir Arthur Dean, "The Claiming Clauses of Patent Specifications" (1948-50) 4 Res Judicatae 144.

66. From these authorities the following propositions may be drawn:

1. After the Statute of 1623, grants were expressed in vague and

general terms with but a brief description of the invention.

Matters changed early in the eighteenth century. Thereafter

letters patents were granted subject to a proviso which obliged

the inventor "by an instrument in writing under his hand and seal

particularly to describe and ascertain the nature of the said

invention, and in what manner the same is to be performed, and to

cause the same to be enrolled within six calendar months"; if the

proviso was not met within 6 months the patent lapsed. This

proviso was the origin of the modern specification.

2. It became apparent that the proviso served two distinct functions.

The first was the delimitation of the invention so as to define

the monopoly. The second was the disclosure of the manner in

which the invention was to be performed. The first protected the

interest of the grantee, the second that of the public. The

consideration for the monopoly was the free use by the public of

the invention at the end of the term, with adequate directions as

to how to perform it. The consequence was described by Lord

Moulton (supra at 650) as follows:

"Hence inventors, in their own protection, took to

introducing into their Specifications language

intended to distinguish between that which was there

for the practical information of the public, and that

which was there for the delimitation of the invention.

Correct delimitation was of the greatest possible

importance to the inventor, because if his Patent

covered something which was old the Patent was wholly

bad. At the same time there was the danger of

confining himself to a mere outline which gave

delimitation, but did not tell the public the best way

within those limits of performing his invention. The

one duty required him to state his invention in its

most general form, and the other duty required him to

state it at its best and therefore in a very special

form. Out of that has arisen the practice, which

originally was perfectly optional, of having a

separate part of the Specification primarily designed

for delimitation. That is what we call the Claim."

3. There might be disconformity between the claim and the disclosure,

so that, for example, the patentee was asserting a wider monopoly

than that to which he was entitled by the consideration of the

disclosure with full directions for working the invention.

Disconformity was a ground for repealing the patent by action upon

the prerogative writ of scire facias.

4. Provisional specifications were introduced in Britain by s. 6 of

The Patent Law Amendment Act 1852 (U.K.) ("the 1852 Act"). If a

Law Officer was satisfied that the provisional specification

described the nature of the invention then for 6 months the

invention would obtain the same protection as a patent would give

it, provided that in the meantime the complete specification was

filed (s. 9). The object was to enable the patentee to perfect

the invention by experiments, not going beyond the nature of the

invention but conveying additional information as to the manner in

which the invention was to be performed. This is to be borne in

mind in construing the modern requirement of fair basing. To this

new scheme the old rule was adapted so that the provisional

specification occupied the position of the description contained

in the grant. The result was that the patent was void if the

complete specification contained another and different invention

from that disclosed in the provisional.

5. Claims were by no means universal, nor were they tightly drawn.

It did not become obligatory to include claims to define the

invention until the Patents, Designs and Trade Marks Act 1883

(U.K.) ("the 1883 Act"). Subsection 5 (5) thereof provided that a

complete specification "must end with a distinct statement of the

invention claimed." Previously, if no claim was inserted the

patentee had been taken to claim everything that was described in

the specification: Terrell "The Law and Practice Relating to

Letters Patent for Inventions" 1st ed., 1884, p. 85. However, the

requirement in sub-s. 5(3) of a provisional specification was

merely that it described the nature of the invention, and, as we

shall see, this has been carried into the modern legislation.

Further, sub-s. 9(1) of the 1883 Act required consideration, upon

examination, of whether the invention as described in the complete

specification was "substantially the same" as that described in

the provisional specification. Now, of course, sub-s. 40 (3) of

the 1990 Act requires, for fair basing, not a comparison between

two specifications but between the claim and the matter disclosed

in the specification.

6. Subsection 26(3) of the 1883 Act provided that every ground on

which a patent might have been repealed by scire facias was

available by way of defence to an infringement action and was a

ground of revocation. This became the position in Australia; s. 86

of Patents Act 1903 ("the 1903 Act") was to the same effect as

sub-s. 26(3) of the 1883 Act. In Britain this meant that

disconformity, in either of the senses discussed above, remained

available as a ground for revocation or as a defence of

invalidity.

7. However, in Australia the High Court held in Tate v Haskins supra

that s. 86 had to be read subject to other provisions of the 1903

Act. The result was that disconformity between the complete and

provisional specifications was not a ground for holding a patent

invalid; unless there was an amendment after acceptance,

disconformity was a matter closed by acceptance. Section 40 of

the 1903 Act was in substance the same as sub-s. 9(1) of the 1883

Act. The concept in these provisions of substantial identity

between the invention described in the complete specification and

that described in the provisional specification was found also in

sub-s. 6 (3) of the Patents and Designs Act 1907 (U.K.). Hence the

suggestion in 1951 that the later requirement that claims be

"fairly based" on matter described in the provisional

specification be given a similar meaning: "Terrell and Shelley on

the Law of Patents", 9th ed., supra.

8. The other application of the principles as to disconformity

concerned the relationship between the claims and the body of the

complete specification. This aspect of disconformity had not been

put on an express statutory footing. The leading authority was

the decision of the House of Lords in The Mullard Radio Valve Co.

Limited v Philco Radio and Television Corporation of Great Britain

Limited (1936) 53 RPC 323. It was held that the claim in

question was "too wide" because it claimed more than the invention

disclosed and described in the body of the complete specification.

The decision was applied to the 1903 Act by Dixon J in Palmer v

Dunlop Perdriau Rubber Co. Limited [1937] HCA 43; (1937) 59 CLR 30 at 76-7, as

authority that a claim will be invalid if it seeks an area of

protection wider than that warranted by the invention. A defect

of this nature was one which would have attracted the writ of

scire facias, the jurisdiction in respect of which was preserved

by the 1903 Act. The basis of the attack on validity was

explained in Mullard as follows by Lord Macmillan (at 347):

"But a claim may be for an article which is new, which

is useful and which has subject-matter, yet it may be

too wide a claim because it extends beyond the

subject-matter of the invention. The consideration

which the patentee gives to the public by disclosing

his inventive idea entitles him in return to

protection for an article which embodies his inventive

idea but not for an article which, while capable of

being used to carry his inventive idea into effect, is

described in terms which cover things quite unrelated

to his inventive idea, and which do not embody it at

all."

67. This passage, dealing as it did with the pre 1949 British law was relied upon by Gibbs J in F. Hoffman-La Roche and Co. v Commissioner of Patents (1971) 45 ALJR 115 at 119 and in Montecatini Edison S.p.A. v Eastman Kodak Company (1971) 45 ALJR 593 at 597, and by Stephen and Mason JJ in Olin Corporation v Super Cartridge Co. Pty Ltd [1977] HCA 23; (1977) 51 ALJR 525 at 537. In those cases the High Court was dealing with "fair basing" as introduced by the 1952 Act. Of course, in Mullard the House of Lords had been concerned to find a rationale for disconformity between the body and claims in a complete specification, in the absence of express statutory provision. The rationale was found in the concept of the disclosure as the consideration for the monopoly delimited by the claim. But, in applying Mullard to what since 1952 are express statutory provisions, some caution is needed lest the history swamp the new text. Hence the observation by Barwick CJ in Olin (at 527), which emphasises the importance of that text:

"The question whether the claim is fairly based is not to be

resolved, in my opinion, by considering whether a monopoly

in the product would be an undue reward for the disclosure.

Rather, the question is a narrow one, namely whether the

claim to the product being new, useful, and inventive, that

is to say, the claim as expressed, travels beyond the matter

disclosed in the specification."

68. Another tendency has been to analyse "fair basing" in terms of particular "tests", a process to which lawyers often are attracted when presented with a broadly expressed statutory norm. In the Matter of the Mond Nickel Company Ltd's Application for a Patent (1956) RPC 189 at 194, contains what has proved to be an all too significant passage. It was spoken by Lloyd-Jacob J in the course of dealing with the question whether claims of a complete specification were "fairly based" on a provisional specification. His Lordship said:

"It seems to me that there is a three-fold investigation

which is called for. Firstly, one has to enquire whether

the alleged invention as claimed can be said to have been

broadly described in the provisional specification, and only

if an affirmative answer is given to that question does one

proceed to the second question, which is: Is there anything

in the provisional specification which is inconsistent with

the alleged invention as claimed? If it is found, upon

examination, that the invention as characterised in the

claim includes something which is inconsistent with that

which is described in the provisional specification, as at

present advised I should think that it would be right to

conclude that that claim could not have been fairly based

upon the disclosure; but, assuming that those two burdens

are satisfactorily surmounted, there is, I think, a third

matter for enquiry: Does the claim include as a

characteristic of the invention a feature as to which the

provisional specification is wholly silent?"

69. The use of the term "inconsistent" is somewhat unfortunate. First, whilst it may have a clear meaning to an English lawyer, in Australian law, particularly constitutional law, it is a term used in a variety of senses; Nominal Defendant v Morrison [1992] FCA 402; (1992) 37 FCR 479 at 483. What is at issue here is the identification of "the matter described" in the provisional specification or the body of the specification. Further, such a term encourages the provision of an answer to the issue of "fair basing" by an over meticulous verbal analysis, as if the question was whether one statute operated in the same field as the other, or whether one statute impliedly repealed another. In addition, it is well established that a claim may be fairly based on matter in the specification which is not verbal description but accompanying drawings; these of course, are to be read by the skilled addressee: Societe Des Usines Chimiques Rhone-Poulenc v Commissioner of Patents [1958] HCA 27; (1958) 100 CLR 5 at 11, per Fullagar J; Halsbury's Laws of England, 4th ed., vol. 35, pp. 301, 303.

70. The comparison is not analogous to that between a claim and an alleged anticipation or infringement; cf. Interact Machine Tools (N.S.W.) Pty Limited v Yamazaki Mazak Corporation (1993) 27 IPR 83 at 98. The statutory treatment of fair basing represents a particular development of a special branch of patent law and has had a complex history, as we have briefly indicated.

71. In Stauffer Chemical Co's Application (1977) RPC 33, where the issue of "fair basing" concerned the correct priority date, Graham J (at 42) referred with approval to what had been said by Gibbs J in Hoffman-La Roche to the effect that Mond Nickel was not a substitute for the application of the terms of the legislation. His Lordship pointed out that "fair basing" had been introduced in 1949 for two different reasons. The first was to replace previous provisions dealing with disconformity between provisional and complete specifications. The second was to deal with cases of undue width of claim, such as in Mullard. But, although the reasons for the introduction of "fair basing" were different, many similar considerations were involved in the application of "fair basing" in its various operations. The Court of Appeal dismissed an appeal. But it disagreed with Graham J's view that "fair" involved taking into account the fairness in a broad sense of the applicant's conduct; Buckley LJ said (at 52) that what is required to be fair is not the applicant's claim to priority but the basis which one document affords for a claim in the other.

72. In answering that question, Buckley LJ eschewed an over meticulous verbal analysis. That this is so is apparent from the following passage ((1977) RPC at 54):

"If a new feature were a development along the same line of

thought which constitutes or underlies the invention

described in the earlier document, it might be that that

development could properly regarded as fairly based on the

matter disclosed in the earlier document, and that the new

process described in the later document which incorporates

that development could as a whole be regarded as fairly

based upon the matter disclosed in the earlier document.

If, on the other hand, the additional feature involves a new

inventive step or brings something new into the combination

which represents a departure from the idea of the invention

described in the earlier document, it could not, I think, be

properly described as fairly based upon the earlier

document."

73. This judgment was approved by Fox J and Spender J in Coopers Animal Health Australia Ltd v Western Stock Distributors Pty Limited supra at 385, 389, 401. Fox J (at 389) added:

"Where the holder of the provisional specification proceeds

with a complete specification with a view to the grant of a

patent, it is recognised that greater definition, as a

result of further experimentation or otherwise, may be

achieved before the later step is taken and the result

expressed therein. Some generality of expression in the

provisional specification is accepted."

In Imperial Chemial Industries Limited (Clark's) Application (1969) RPC 574 at 584, Lloyd-Jacob J asked whether the claim was "plainly foreshadowed" in the disclosure in the provisional application. In Coopers Animal Health, the Full Court also carefully drew the distinction between the claim and the disclosure, as the statute required, and as Barwick CJ had pointed out in Olin. See also the application of the distinction by Burchett J in Elconnex Pty Limited v Gerard Industries Pty Limited [1991] FCA 567; (1991) 32 FCR 491 at 505-6, 515-6, affd. (1993) AIPC 90-984.

74. In Rhone-Poulenc (at 11) Fullagar J emphasised that disclosure without claim is enough. Hence, it is wrong to proceed as if testing for infringement and to seek to isolate in the body of the complete specification, or in the provisional specification, "essential integers" or "essential features" of an invention disclosed therein and to ask whether they correspond with the essential integers in the claim in question; cf. Coopers Animal Health Australia Limited v Western Stock Distributors Pty Limited (1986) 67 ALR 390 at 406, the decision at first instance. Nor would it be applying the statute to ask whether the earlier specifications fairly described the essential features of the invention disclosed in the later specification; cf. Yamazaki at 93, 97. Fullagar J also pointed out that the requirement of "fair basing" on matter disclosed in an earlier specification would be senseless if what was required was that the subject matter of the claim must have been actually claimed in the earlier specification; rather, there must be "a real and reasonably clear disclosure". This passage was adopted and applied by Gibbs J in Hoffman-La Roche supra at 119, where the claims were for chemical compounds forming part of a very large class disclosed in the basic application.

75. These matters are of some significance in considering the approach taken in the present case by the primary Judge to the issue of fair basing.

76. It is necessary to begin with the text of the Provisional Specification. The third paragraph contains a significant passage which we emphasise:

"The Chinese written language is a symbolic language, rather

than an alphabetic language, and contains many thousands of

symbols, each of which may represent a word. Chinese

characters are all formed from unique combinations of eight

uniquely-shaped basic elements or "strokes". Each stroke

type is characterised by its size and direction, and over

fifty strokes may be used to form the most complex

characters, although most characters can be defined with

between six and twenty-one strokes. Each character has a

particular stroke count number associated with it, although

the official stroke count number can vary from the actual

stroke count number in a small number of cases."

(Emphasis supplied)

77. There is no dispute but that the reference to eight uniquely-shaped basic elements or "strokes" is factually erroneous. It is well recognised that the basic elements or "strokes" of Chinese characters can, according to some scholars, be categorised according to stroke type on bases which result in categories more or less than eight in number. An erroneous statement of this kind which appears in the body of the specification, even if carried into the very terms of a claim, will not vitiate a patent, if otherwise valid. This is so, provided that from a practical point of view the public is fairly given possession of the invention: Adhesives Pty Limited v Aktieselskabet Dansk Gaerings-Industri [1935] HCA 83; (1935) 55 CLR 523 at 545-6 per Evatt J. However, that is not the present significance of the error. The significance concerns fair basing.

78. The consistory clause of the Provisional Specification is followed by this passage:

"The character may be any desired character or symbol,

including a pattern or a logo. Preferably, however, the

character is a Chinese writing character and the

sub-elements are the strokes from which a Chinese character is

formed. Of course, if desired, the character may be a

symbol according to another language such as Japanese, or a

scientific symbol such as a component of a mathematical

equation.

The character identification means may include any desired

identification criteria. It is preferred, however, that the

character identification means include stroke size and

stroke shape data, and may also include the stroke order in

which strokes are added to form a character. The character

sub-element entry means may be adapted for the provision of

stroke order data by the sequential entry of stroke size and

shape data or by other stroke order definition means."

(Emphasis supplied).

79. It is here that the difficulty with fair basing arises. The first passage from the Provisional Specification which we have set out, although not in terms expressed as a definition, clearly proceeds on the express footing that references, in relation to Chinese characters, to "strokes", are to eight uniquely shaped basic elements. It is true that it is later said that the means of character identification may include any desired identification criteria. But that is said in a context where the characters in question may not be those of the Chinese language. The immediately following reference to stroke size, stroke shape and stroke order is to be understand as referring to the eight uniquely shaped basic elements. In our view, to adapt the words of Fullagar J, there is not a real and reasonably clear disclosure of a means of identification of Chinese characters which uses a classification of "strokes" involving other than eight uniquely shaped basic elements. Nor does the disclosure plainly foreshadow any such other classification.

80. As we have indicated, in our view the claim of the Petty Patent is not limited to any particular number of character stroke type categories or families of character strokes that have common characteristics. It follows that the claim is not fairly based on matter disclosed in the Provisional Specification.

"The underlying principle in the provisional application was

the alleged truism that there were eight basic stroke-type

categories used in Chinese writing and that the method

claimed involved the characterisation of each Chinese

character by reference to this natural law, and that the

search criteria involved the application of this natural law

combined with the fixed stroke order used in writing Chinese

characters. This is inconsistent with the specification and

claim of the petty patent in suit which teaches that any

number of categories may be determined as a matter of choice

relying simply on the size and/or direction of the character

strokes to assign a particular character stroke to any one

of a chosen number of categories."

(Emphasis supplied)

We agree, subject to the important qualification that in the last sentence the reference should be not to that which is taught by the Petty Patent but to that which is claimed. The only appropriate comparison required by the statute is between the claim in the Petty Patent and the matter disclosed in the Provisional Specification.

82. In reaching his conclusion, the primary Judge also referred (27 IPR at 603) to the preferred embodiment in the Provisional Specification as stating "what is essential to the claimed invention". The Provisional Specification does not include any claim. Section 39 of the 1952 Act merely required that it "describe the invention". This has been so in patent legislation since s. 9 of the 1852 Act introduced the provisional specification. It is still the case; sub-s. 40(1) of the 1990 Act. The "preferred embodiment" certainly indicates the use of 8 basic character strokes. This is not surprising since any embodiment would do so, given the premise in the third paragraph at the commencement of the Provisional Specification. Nevertheless, in other cases it could be unsafe to assess the disclosure in the earlier specification, or the body of the complete specification, by decisive reference to the preferred embodiment. A claim may be fairly based on matter disclosed in a portion of the specification which does not include the description of the preferred embodiment.

83. However, in the present case, for the reasons we have given, even without regard to what is disclosed in the preferred embodiment there was not a real and reasonably clear disclosure in the statutory sense.

84. On the appeal, a further point was advanced by the respondents to provide an additional ground for denying a fair basing. Before turning to the new point, we note the following. Counsel accepted that because "fair basing" raises an issue of law it is open for an appellate court to entertain a fresh argument that there is a lack of fair basing. That is true, but in deciding these and other issues of construction of patent documents, the court derives assistance from experts who are skilled addressees. The court should be careful to avoid assuming a technical expertise it does not have. The point was made by Lord Reid in C. Van der Lely N.V. v Bamfords Limited (1963) RPC 61 at 71. Thus, the absence of such assistance, because the new point had not arisen at the trial, may present a particular problem for an appeal court in embarking upon what is a new inquiry. It was not suggested that there was any such difficulty in the present case.

85. Counsel for the respondents fixed upon a sentence in the passage from the Provisional Specification which we have set out above. The sentence is:

"The character identification means may include any desired

identification criteria."

He then pointed to the claim in the Petty Patent which, as we have said, delimits the area of the monopoly by criteria which include categories of character stroke types which are characterised by either or both the size and direction of the strokes in the category. The submission then was put that there is a lack of fair basing because the statement extracted from the Provisional Specification is "inconsistent" with the claim or, alternatively, the claim includes as a characteristic of the invention a feature as to which the basic application is wholly silent. Reliance thus is placed upon the second and third of the questions formulated in Mond Nickel supra at 194.

86. Certainly, the Australian case law includes examples where there has been a lack of fair basing because of the total silence of the basic application as to a feature of the invention as claimed. That is but another way of saying that there cannot be a real and reasonably clear disclosure if there is no disclosure. Further, there cannot be a real and reasonably clear disclosure of what has become an integer in the claim if what is involved is the selection in the claim of one compound with special qualities, from a class of compounds disclosed in the provisional specification. An example is the decision of the Full Court in Coopers Animal Health Australia Limited v Western Stock Distributors Pty Limited, supra at 389-391, 400-401. There, the claim in the petty patent for the formulation including DGBE as a carrier could not be regarded as a more specific application of what was claimed in the provisional specification; rather it was the result of further experimentation and was properly regarded as involving an inventive step beyond the disclosure in the provisional specification. Whilst some generality of expression in the provisional specification was acceptable, nevertheless a reading or study of it would not lead by a process of selection to that which was later claimed.

87. The present case is very different. In the critical passage in the Provisional Specification, the sentence immediately following that relied upon by the respondents states in terms that the preferred means of character identification is one which includes stroke size and stroke shape data. Thus, there is no inconsistency with the claim, nor can it be said that the Provisional Specification is relevantly wholly silent.

88. It follows that the case on the additional fair basing point has not been made out.

89. The primary Judge also held that the claim of the Petty Patent in suit was not fairly based on the petty patent specification filed 10 February 1989, nor on the complete specification lodged 5 September 1989 for the P.C.T. application, nor on the petty patent application lodged 19 March 1991. This was because, in each case, there was a repetition of the false truism of the eight stroke type categories. We need not repeat what is said on the point by the primary Judge (27 IPR at 605-6). In our view, his Honour correctly held that the priority date of the Petty Patent is 22 July 1991. It follows that the Petty Patent was anticipated by the first sale of the Jiejing product on 8 December 1989.

90. Any amendment application under s. 105 of the 1990 Act which is made in the light of the disposition of this appeal should be made to a Judge of the Court. The parties accepted that this was the preferable mode of procedure; cf. Rescare Limited v Anaesthetic Supplies Pty Limited (1993) 25 IPR 119. In the meantime, there should be no order for revocation. However, there should be a declaration that without prejudice to the effect of any order which may be made upon an amendment application pursuant to s. 105 of the 1990 Act, the Petty Patent is and always has been invalid. If that application fails, it will then be open to the respondents to seek from a Judge of the Court a formal order of revocation.

91. The primary Judge referred to the discussion of the relevant principles in the Full Court in Nicaro Holdings Pty Limited v Martin Engineering Co. [1990] FCA 40; (1990) 91 ALR 513. He also referred to the proposition that generally one can properly ask whether the alleged anticipation would, if the patent were valid, constitute an infringement: Meyers Taylor Pty Limited v Vicarr Industries Limited [1977] HCA 19; (1977) 137 CLR 228 at 235, per Aickin J. There was no dispute as to the relevant principles.

92. In their Notice of Contention, the respondents now rely only upon two of the alleged anticipations. These are the Leung patent and the Lo/Barnea article. Both were published and available in Australia before 5 September 1988.

93. The primary Judge found that the Leung patent disclosed all of the elements in the claim of the Petty Patent save one. This was the omission of the coding criteria and coding system utilised in the Petty Patent. His Honour said (27 IPR at 610):

"In Leung the patent teaches a method which is a combination

of:

(a) classifying strokes in terms of basic stroke types, in

the preferred embodiment limited to five, 'the stroke

types (being) classified by simple geometric

properties as described' in the patent; and

(b) combinations of two or more common sequences of

characters weighted according to frequency of their

occurrence in Chinese text."

The primary Judge held that Leung taught the use of categories of Chinese characters in which stroke types were classified by geometric properties. On the other hand the claim of the Petty Patent, as we have construed it, claims categories of character stroke types which are characterised by either or both the size and direction of the strokes in each category. The respondents submit that as used in the claim of the Petty Patent "direction" is "merely a geometric property defining shape, such as downwards to left or downwards to right." Therefore, it is said, Leung is an anticipation.

94. Leung identifies, in particular, what it designates as five basic stroke types. These are described respectively as (i) horizontal, (ii) vertical, optionally with left hook, (iii) left or right obliques and curves, (iv) dot, and (v) angulated strokes sustaining an acute or right angle. It will be apparent that at least types (iii) and (v) include elements of strokes of different directions. No doubt it is true to say that when the Petty Patent claims categories characterised by direction of the strokes in the category it is drawing upon a geometric property, geometry being concerned with the spatial configuration of the elements of any system. But Leung is concerned with the classification by geometric properties which differ from that identified in the claim of the Petty Patent, namely categorisation by direction of strokes.

96. Lo and Barnea adopt a classification based upon what is said to be five fundamental types of components of all Chinese characters. But these components need not be and are not identified as strokes in the sense of that term in the Petty Patent claim, namely a single unbroken line between the point where the brush touches the paper and the point where it is lifted from the paper. In our view, his Honour correctly held that Lo and Barnea is not an anticipation because it does not teach a system of categorisation in which the stroke is a single entity. As the primary Judge pointed out (27 IPR at 609) in accordance with the teaching of the Lo and Barnea disclosure complex strokes will be broken down into elements conforming to one or more of the 5 fundamental components, namely dots (being very short strokes or hooks), horizontal, vertical, positive diagonal and negative diagonal components. On that footing, we agree that there is no anticipation.

97. As we have indicated, the primary Judge found against the appellants on this issue. His holding appears in the following passage (27 IPR at 594):

"The material feature of the claimed combination is the

means by which Chinese characters are categorised by

stroke-type category and stroke order as defined in the

specification of the petty patent in suit and the use of

such criteria to retrieve and display Chinese characters.

That is, the procedures used to organise and process the

data. The other integers of programming and computer

hardware are merely a conventional means to produce the

desired result. Taking the claim as a whole, that which is

sought to be made the subject matter of a monopoly is the

use of stroke-type categories and stroke order as defined in

the specification to organise and process data relevant to

Chinese characters in a database and to retrieve and display

Chinese characters on a computer screen. The formulation of

such criteria and their use as rules to organise and process

data stored in a database in a conventional computer are the

product of human intellectual activity lying in the fine

arts and not the useful arts. The claim discloses no method

of manufacture within the meaning of section 6 of the

Statute of Monopolies and therefore discloses no patentable

invention."

98. The appellants challenge that holding. They renew their submission, rejected by the primary Judge, which his Honour had restated as follows (27 IPR at 583):

"The (appellants) submit the claim in the petty patent was a

combination claim for a new apparatus. The apparatus was a

computer processing apparatus for assembling text in Chinese

language characters which produces a particular result,

namely, the retrieval and display of Chinese characters on

screen for assembly in text. Although a number of the

integers represented conventional and known computer

hardware, display, and processing systems including standard

processing programs, the combination of those integers was a

computer program or programs supplying the Chinese character

database, stroke-type category criteria and graphic display

of Chinese characters created, when programmed, a new

machine which operated in accordance with the steps detailed

in the claim. It was submitted that the production of some

useful effect, in this case the assembly of Chinese

characters on a visual display unit, was sufficient to

constitute the computer as programmed an invention under the

(1990 Act)."

Whilst at least one integer of the computer hardware, namely the adaptation of input entry keys for character stroke-types, was not conventional it was not, in the patent law sense, novel. As construed by the appellants, the claim in the Petty Patent was for a computer processing apparatus having certain characteristics for the retrieval of graphic representations of Chinese characters whereby text in Chinese language characters might be assembled. No point was pursued on appeal concerning best method or ambiguity within the meaning of s. 40 of the 1990 Act.

99. What one might call "the idea" of the invention lies in the use of a particular method of characterisation of character strokes which is applied to an apparatus in such a way that operation of the keyboard will enable the selection through the computer, in a particular way, of the appropriate Chinese characters required for word processing.

100. The NRDC Case remains of considerable importance in this field. It is to be noted that the decision changed the direction of the case law not only in Australia but also in the United Kingdom. Accordingly, British decisions given before the commencement of the 1977 Act remain of particular significance in Australia when construing the 1990 Act. In both countries NRDC was, as Barwick CJ put it in Joos v Commissioner of Patents [1972] HCA 38; (1972) 126 CLR 611 at 616, a watershed; see respectively as to the change wrought by NRDC in British and New Zealand Patent Office practice, R v Patents Appeal Tribunal; Ex parte Swift and Co. (1962) 2 QB 647, and Swift and Co. v Commissioner of Patents (1960) NZLR 775.

"18(1) Subject to subsection (2), a patentable invention

is an invention that, so far as claimed in any

claim:

(a) is a manner of manufacture within the meaning

of section 6 of the Statute of Monopolies; and

(b) when compared with the prior art base as it

existed before the priority date of that

claim:

(i) is novel; and

(ii) involves an inventive step; and

(c) is useful; and

(d) was not secretly used in the patent area

before the priority date of that claim by, or

on behalf of, or with the authority of, the

patentee or nominated person or the patentee's

or nominated person's predecessor in title to

the invention.

(2) Human beings, and the biological processes for

their generation, are not patentable inventions."

Section 7 explains the circumstances when an invention is taken to be novel and to involve an inventive step. Section 9 lists certain acts which are not to be taken to be secret use. Schedule 1 makes it plain that the reference in para 18(1)(a) to the Statute of Monopolies is to the English Statute of 1623. The first definition which incorporated the law upon the Jacobean legislation appears to have been in s. 55 of the 1852 Act. This stated:

"The expression 'invention' shall mean any manner of new

manufacture the subject of letters patent and grant of

privilege within the meaning of the Act of the twenty-first

year of the reign of King James the First, chapter three."

Section 6 of the 1952 Act contained a definition of "invention" in these terms but with the addition, "and includes an alleged invention".

102. The primary Judge was referred to a number of United Kingdom authorities, some of them post-dating the 1977 Act. Some care is needed here. This is because the Jacobean Statute as interpreted in NRDC no longer supplies a criterion for patentability in the British legislation. Section 1 of the 1977 Act provides that a patent may be granted only for an invention in respect of which certain conditions are satisfied, being novelty, the presence of an inventive step and "capacity for industrial application". That which would have been considered a manner of manufacture under the previous law will not necessarily have "capacity for industrial application": Merrill Lynch Inc.'s Application (1988) RPC 1; cf. Gale's Application (1991) RPC 305 at 323, 330.

"4 (1) Subject to subsection (2) below, an invention shall

be taken to be capable of industrial application if

it can be made or used in any kind of industry,

including agriculture.

(2) An invention of a method of treatment of the human

or animal body by surgery or therapy or of

diagnosis practised on the human or animal body

shall not be taken to be capable of industrial

application.

(3) Subsection (2) above shall not prevent a product

consisting of a substance or composition being

treated as capable of industrial application merely

because it is invented for use in any such method."

An invention may be new, involve an inventive step, and be capable of industrial application, but nevertheless be excluded from grant of patent by reason of sub-ss. 1 (2),(3). Subsection 1(2) declares not to be an invention for the purpose of the statute, anything which consists of: (a) a discovery, scientific theory or mathematical method, (b) a literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever, (c) a scheme, rule or method of performing a mental act, playing a game or doing business, or a program for a computer; and (d) the presentation of information. However, the subsection goes on to provide that the exclusion operates "only to the extent that a patent or application for a patent relates to that thing as such".

104. These concluding words, particularly in relation to computer programs, have given rise to litigation. Some of the decisions, including that of Aldous J in Wang Laboratories Inc's Application (1991) RPC 463, were considered by the primary Judge. His Honour also referred to the decision of the German Federal Supreme Court in Re The Computer Generation of Chinese Characters (1993) FSR 315. There, an appeal was dismissed, without oral hearing, from a decision of the Federal Patent Court which in turn had dismissed an appeal from the Examiner. As we understand it, the German legislation, like the 1977 Act, is intended to render the municipal patent law compatible with the European Patent Convention. The alleged invention concerned a method for the storage of data and control criteria for Chinese characters in the memory unit of an input device; the application was rejected on the ground that the method claimed was not, within the meaning of the legislation, of a technical nature. The legislation provided in express terms that programs for computers as such were not to be regarded as inventions; see (1993) FSR at 321-2.

105. In Australia, when the 1952 Act was replaced by the 1990 Act, the new British legislation was not followed. There was in sub-s. 18(2) an express exclusion from patentable inventions of human beings and biological processes for their generation. Beyond that the legislature left the matter, in terms of para 18(1)(a), to rest with the concept of manner of manufacture within the meaning of s. 6 of the Statute of Monopolies, as developed by the Courts, notably in the NRDC Case. This was a matter of deliberate legislative choice. The materials which make this plain are collected and discussed by Burchett J in N.V. Philips Gloeilampenfabrieken v Mirabella International Pty Limited [1993] FCA 404; (1993) 44 FCR 239 at 267-270.

106. Our task thus involves consideration of concepts which have evolved, and are still evolving, in accordance with the classic decision in the NRDC Case. As the High Court there pointed out (102 CLR at 269-271) the right question thus becomes, is this a proper subject of letters patent according to the principles which have been developed for the application of s. 6 of the Statute of Monopolies? The question is to be answered bearing in mind that the term "manufacture" has applications beyond limits suggested by its etymology, and that any attempt at precise definition of "manufacture" in s. 6 is bound to fail. In the NRDC Case (at 271), Dixon CJ Kitto and Windeyer JJ said, in a passage which warrants repetition:

"The purpose of section 6, it must be remembered, was to

allow the use of the prerogative to encourage national

development in a field which already, in 1623, was seen to

be excitingly unpredictable. To attempt to place upon the

idea the fetters of an exact verbal formula could never have

been sound. It would be unsound to the point of folly to

attempt to do so now, when science has made such advances

that the concrete applications of the notion which were

familiar in 1623 can be seen to provide only the more

obvious, not to say the more primitive, illustrations of the

broad sweep of the concept."

107. It is instructive to begin with the terms of s. 6 of the 1623 Statute. It read:

"6 Provided also, and it be declared and enacted, That any

declaration before mentioned shall not extend to any

letters patent and grants of privilege for the term of

fourteen years or under, hereafter to be made of the

sole working or making of any manner of new manufactures

within this realm, to the true and first inventor and

inventors of such manufactures, which others at the time

of making such letters patent and grants shall not use,

so as also they be not contrary to the law or

mischievous to the State, by raising prices of

commodities at home, or hurt of trade, or generally

inconvenient; the said fourteen years to be accounted

from the date of the first letters patents or grant of

such privilege hereafter to be made, but that the same

shall be of such force as they should be if this Act had

never been made, and of none other."

(Emphasis supplied)

108. In NRDC their Honours also pointed out (at 269) that although the Statute of 1623 spoke of the inventor it nowhere spoke of the invention. They continued, speaking of the 1952 Act, as follows:

"The word 'manufacture' finds a place in the present Act,

not as a word intended to reduce a question of patentability

to a question of verbal interpretation, but simply as the

general title found in the Statute of Monopolies for the

whole category under which all grants of patents which may

be made in accordance with the developed principles of

patent law are to be subsumed."

Accordingly, the phrase "any manner of new manufactures" has been interpreted over time in such a way as to contain within it distinct principles or doctrines concerned with patentability: Advanced Building Systems Pty Limited v Ramset Fasteners (Australia) Pty Limited [1993] FCA 184; (1993) AIPC 91-017 at 39, 548, per Hill J. They include the necessity for a manner of manufacture itself, for novelty, and for inventiveness. Objections such as lack of utility may have been derived from the prohibition upon manufactures which are "generally inconvenient". Others, such as obtaining by false suggestion, derived from the general law attending the writ of scire facias to recall Crown grants and the Chancery jurisdiction in respect of fraudulent grants: Prestige Group (Australia) Pty Limited v Dart Industries Inc. (1990) 26 FCR 197 at 213-219. The essential point is that the grounds of revocation were capable of development by the common law and did so develop: American Cyanamid Company (Dann's) Patent (1971) RPC 425 at 435-6 (Lord Reid), 448-9 (Lord Wilberforce).

109. Particular grounds of invalidity, derived from the case law, were added to the modern statutes. Lack of inventiveness, as distinguished from anticipation, obtained a distinct statutory recognition only in this century and, in Australia, in the 1952 Act: R.D. Werner and Co. Inc. v Bailey Aluminium Products Pty Limited (1989) 25 FCR 565 at 573-584, 591-602. As this development continued, the phrase "manner of new manufactures" came to represent the residuum of the central concept with which NRDC was concerned, namely what the High Court called the relevant concept of invention. It should be noted that in NRDC (102 CLR at 262) the High Court, which was dealing with the 1952 Act, spoke of the concept of patent law ultimately traceable to the use in 1623 of the words "manner of manufacture" and spoke of novelty and inventive step as distinct matters.

110. This distinction is now made clear by the use of the expression "manner of manufacture" in s. 18 of the 1990 Act. The structure of sub-s. 18(1) emphasises that the grounds of novelty, inventive step, utility and secret use are each excised from any general body of case law which previously developed the phrase from 1623 "manner of new manufactures". The point is made particularly clear by the reference in para (a) of the subsection to "manner of manufacture" rather than to "manner of new manufactures".

111. In any event, it must be highly doubtful whether any recasting of the law was intended by the particular form taken by s. 18. When construing the 1952 Act in NRDC, the High Court dealt (pp. 261-8) first with obviousness, an aspect of which is the doctrine of analogous user, before returning to what it described as the "central question in the case". This was (at 268) whether a process for killing weeds could be within the relevant concept of invention in s. 6 because it produced a useful physical result in relation to a material or tangible entity; cf. N.V. Philips Gloeilampenfabrieken v Mirabella International Pty Limited [1993] FCA 404; (1993) 44 FCR 239 at 261-262, 264-5, 282-3. The pre-1949 British legislation defined "invention" in virtually identical terms to those in s. 6 of the 1952 Act and referred to "manner of new manufacture". In an appeal to him as Law Officer against the refusal of acceptance, Sir Stafford Cripps S-G, said that there were, in reality, two distinct questions, "Is there a manner of manufacture?" and "Is the manufacture a new manufacture?"; the first was capable of solution upon a study of the specification itself: In the Matter of an Application for a Patent by Compagnies Reunies des Glaces et Verres Speciaux du Nord de la France (1931) 48 RPC 185 at 188.

112. The immediate significance of this is that in the 1990 Act, manner of manufacture, novelty, inventiveness and utility are stated as distinct requirements of a patentable invention. Thus, whilst a claim for the ball point pen now would fail for anticipation and obviousness, it would still be a claim for a manner of manufacture. Yet in the present case there are passages in the reasons of the primary Judge (e.g. 27 IPR at 593) which suggest he was influenced in the determination of the issue as to "manner of manufacture" by asking whether what was claimed involved anything new and unconventional in computer use.

113. As Professor Cornish has put it, in the passage to which we referred above, after the NRDC Case the criterion of "manner of manufacture" has required a decision as to what properly and currently falls within the scope of the patent system. In that regard it should be noted that the present case requires no consideration of what the High Court flagged as the "apparent" exclusion from the concept of invention of methods of surgery and other processes for treating the human body (102 CLR at 270, 275). Rather, insofar as "manufacture" suggests a "vendible product", this is to be understood as covering every end produced or artificially created state of affairs which is of utility in practical affairs and whose significance thus is economic (102 CLR at 276-7).

114. In his article "Computers and the Law: The Protection of Intellectual Property" (1978) 9 FL Rev. 15, Professor Lahore said:

"The impact of computer technology on the law of

intellectual property has raised legal problems which have

proved difficult if not impossible to answer within the

framework of existing legal concepts. Intellectual property

is relevant to the development of computer technology in two

broad areas: legal protection for the work of the programmer

and infringement of intellectual property rights by the use

of computers."

In the period that has followed the response has been to make provision in the copyright law. This has been done by the courts and then by the legislature, despite the basic propositions that functionality is not a proper object of copyright protection and that the dominant principle of copyright law is that protection is given not for ideas but only for the particular form of expression: Accounting Systems 2000 (Developments) Pty Limited v CCH Australia Limited (1993) 42 FCR 470 at 496-7.

115. This development has been criticised, not the least because the length of the copyright term greatly exceeds the period for which protection is necessary, given the apparently short life of even the most successful programs; see the article by Mr H.L. MacQueen "Extending Intellectual Property: Producers v. Users" (1994) 45 NILQ 30 at 33-44. Further, in Australia the Circuit Layouts Act 1989 reflects the United States legislation of 1984 and creates a new species of intellectual property protection of certain layouts for integrated circuits.

116. What then of patent law in Australia? Professor Lahore pointed out (supra at 22-3):

"Some matter has never been considered to constitute a

patentable invention. This matter includes a method of

calculation or a process of mathematical operations,

(including ways of solving mathematical problems), business,

commercial and financial schemes, schemes of operation, and

printed sheets, cards, tickets or the like which are mere

records of intelligence."

A distinction also has been drawn between the discovery of laws or principles of nature and the application thereof to produce a particular practical and useful result. A reason why the former has not been treated as a proper subject of patent according to the principles developed pursuant to the Statute of 1623 was considered as long ago as 1852 in Carpmael, "The Law of Patents for Inventions" 5th ed., 42-3:

"Let it not however be supposed that the minds of the

individuals making such discoveries of principles are

underrated, on the contrary, the highest respect is due to

both, but it will be evident that their discoveries are not

of that kind which should secure to them the right of toll

on all future practical applications of such principles;

such a course would lead to endless difficulties, and tend

to prevent those rapid strides to improvements by which the

existence of the present law has been marked."

The last case relating to computer programs decided in the United Kingdom before the commencement of the 1977 Act was that of the two Patent Judges, Graham and Whitford JJ, sitting as the Patents Appeal Tribunal in International Business Machines Corporation's Application (1980) FSR 564. This was an appeal on an unsuccessful revocation application. The software was a program designed to calculate automatically the selling price of stock or shares by comparing a set of buying and selling orders. It was accepted that the scheme was not itself novel, and that a completely standard computer could be programmed to perform it. Nevertheless, their Lordships, speaking as specialist judges of long experience in the field, held that the patent was good. They said (at 572) that what the inventor sought to claim was a method involving the operation or control of a computer, such that it was programmed in a particular way to operate in accordance with the inventor's method. More than "intellectual information" was involved because the method was involved in the program and in the apparatus in physical form.

117. What had been happening elsewhere in the meantime is described as follows by Mr Colin Tapper in his work "Computer Law", 4th ed., 1989, p. 9:

"It is somewhat ironic that the original impetus behind a

strong movement to limit, or even to eliminate, the

patenting of computer programs came from the United States

in the report of President's Commission ("To Promote The

Useful Arts") in 1966. This view, largely inspired by

practical considerations, was speedily echoed in France

where it was implemented in new legislation explicitly

excluding computer programs from patentable subject matter,

a provision widely construed by the Courts. This same

approach seeped into international provisions by way of the

Patent Co-operation Treaty 1970 which provided in rules 39

and 67 that computer programs were not required to be the

subject of search by the appropriate international searching

agency to the extent that such bodies were not equipped to

search the prior art. These definitions were then repeated

in a slightly modified form as article 52 of the European

Patent Convention, a form in all relevant respects to that

enacted (in United Kingdom as the 1977 Act, sub-s. 1(2))."

We have set out sub-s. 1(2) earlier in these reasons.

118. However, as we have pointed out, in Australia the legislature made no such provision when enacting the 1990 Act. Thus, in our view there is significant guidance to be obtained from the course of decisions in Britain before the new legislation with the application in this field of the principles expounded in the NRDC Case.

119. Moreover, in this Court, in International Business Machines Corporation v Commissioner of Patents [1991] FCA 625; (1991) 33 FCR 218, Burchett J followed the earlier decision of the Patents Appeal Tribunal in Burroughs Corporation (Perkin's) Application (1974) RPC 147 at 161. There, Graham J, delivering the decision of himself and Whitford J, had expressed the view that computer programs which have the effect of controlling computers to operate in a particular way, where such programs are embodied in physical form, are proper subject matter for letters patent. His Lordship had also pointed out (at 158):

"(I)t is not enough to take a narrow and confined look at

the "product" produced by a method. Of course, if a method

is regarded purely as the conception of an idea, it can

always be said that the product of such a method is merely

intellectual information. If, however, in practice the

method results in a new machine or process or an old machine

giving a new and improved result, that fact should in our

view be regarded as the "product" or the result of using the

method, and cannot be disregarded in considering whether the

method is patentable or not."

Burchett J held that the application of a mathematical formula to achieve an end, namely the production of an improved curve image, was a method entitled to the protection of the patent law. His Honour cited the statement of Rehnquist J in Diamond, Commissioner of Patents and Trade Marks v Diehr and Lutton [1981] USSC 40; 209 USPQ 1 (1981) that "an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection" (at 8, emphasis in original).

120. In International Business Machines Corporation's Application, supra, Graham and Whitford JJ accepted as a manner of new manufacture a claim as follows:

"A data handling system suitable for establishing prices for

a given kind of fungible goods as hereinbefore defined in an

auction market as hereinbefore defined, comprising data

storing means suitable for storing data representing buy

orders for the goods and representing sell orders for the

goods, order entering means suitable for entering data

representative of individual buy and sell orders including

price information in said data storage means, comparing

means which in use read out and compare the prices of buy

and sell orders from the data storage means, by pairs chosen

by progressing sequentially and simultaneously through a

descending sequence of the buy orders and an ascending

sequence of the sell orders by price, and means arranged to

be controlled by said comparing means so as to select the

price at which the goods are to be sold in dependence on the

price or prices of the last compatible pair of orders which

are matched so as to select each pair of said buy and sell

orders to be executed as a sale at a transaction price."

The claim of the Petty Patent may usefully be compared with the text of this claim.

121. In the present case, Counsel for the respondents submitted that what is involved is the storage of the result of linguistic tasks undertaken "outside the computer"; what the patentees claim is no more than a desirable characteristic of the computer program, the ability to search, in the manner described, a data base of the type described. We accept that in a given case objections of this type might found an attack for obviousness or lack of novelty, or for failure to comply with s. 40 in one or other of its aspects.

122. Counsel for the respondents sought support from some remarks in this Court in N.V. Philips Gloelampenfabrieken v Mirabella International Pty Limited supra. In that case special leave to appeal was granted by the High Court on 13 May 1994. This case concerned compact low pressure mercury vapour discharge lamps, the inside wall of which was coated with phosphors which emitted visible light when irradiated with ultra violet radiation. The phosphors which were used had low short term decrease in efficacy when the lamp was turned on and high electro-negativity. The lamps saved energy and had a long life; they represented a development from fluorescent lamps.

123. On one reading of the judgments in this Court, the patent was held invalid because it claimed the use of known materials, the phosphors, in the manufacture of a known article, the low pressure lamps, for a purpose for which their known properties made those materials suitable. Thus it was said (44 FCR at 265) that the patentee had chosen two desirable characteristics of the known phosphors and claimed lamps using all phosphors, present and future, possessing those characteristics. However, an attack on validity on the ground of lack of novelty failed and at the trial the case on obviousness had not been pressed (see 44 FCR at 265).

124. The patent was held invalid because "it is not an invention, or a manner of new manufacture, for someone to specify the criteria required to be met, in the manufacture of a known product from known materials, in order to achieve vendibility" (44 FCR at 264). Before us, counsel for the respondents relied upon this decision but, in the course of argument, resiled from doing so insofar as issues more apt to obviousness may have intruded into the consideration of the concept of manner of manufacture. Counsel accepted that many of the old cases which may have been treated in the texts under the heading of "manner of new manufacturer" would now be treated as decisions upon degree of inventiveness, that is to say obviousness.

125. Rather, counsel for the respondents drew upon Philips for a narrower proposition. This was that there could be no manner of manufacture in identifying "basic characteristics" or "desiderata" and "to claim all ways of achieving (them)". Applying that to the present case, it was submitted that all that had been done was to select a desirable characteristic of a computer program, the ability to search, in the manner described, a data base of the type described, and "to claim all computers present and future possessing that characteristic".

126. That submission should not be accepted. It may be that such a claim lacks novelty, is obvious, or lacks utility, or there is a failure to comply with one or other of the limbs of s. 40 because, for example, the invention is not fully described or the claim is not clear and succinct. But if such hurdles all are surmounted, then in our opinion in a case such as the present there does not remain an independent ground of objection as to patentability, within the sense of para 18(1)(a) of the 1990 Act.

127. Once full weight is given to the reasoning in the NRDC Case and to other decisions, including those of the Patents Appeal Tribunal in England before the commencement of the 1977 Act, it follows that the Petty Patent should not have been held invalid on the footing that the claim was not for a manner of manufacture within the meaning of para 18(1)(a) of the 1990 Act.

128. The NRDC Case (102 CLR at 275-277) requires a mode or manner of achieving an end result which is an artificially created state of affairs of utility in the field of economic endeavour. In the present case, a relevant field of economic endeavour is the use of word processing to assemble text in Chinese language characters. The end result achieved is the retrieval of graphic representations of desired characters, for assembly of text. The mode or manner of obtaining this, which provides particular utility in achieving the end result, is the storage of data as to Chinese characters analysed by stroke-type categories, for search including "flagging" (and "unflagging") and selection by reference thereto.

129. The appellants have succeeded in their challenge to the finding of invalidity based on non-compliance with para 18 (1)(a) of the 1990 Act ("manner of manufacture"). They have also succeeded in upholding the finding in their favour that there was no anticipation by prior publication of the Leung patent or the Lo/Barnea article. However, the respondents maintained the finding in their favour on fair basing. That, as we have explained, brings with it invalidity for anticipation on other grounds. Further, the respondents maintained the finding that there had been no infringement.

130. Thus, there may have arisen a situation, the prospect of which was canvassed in the course of argument on the appeal. This is that in the light of the adverse holding on fair basing the appellants may wish to apply for an amendment of the Petty Patent to narrow the claim, thereby bringing it into a form which would be fairly based upon the matter disclosed in the Provisional Specification. We express no view, one way or the other, as to the outcome of such an application. It will be sufficient for this court to grant appropriate liberty to apply in respect of any amendment application. Consideration also will have to be given to the extension of the term of the Petty Patent if it be amended.

131. Accordingly, the orders of the Court should provide that:

1. The declaration and orders 1 and 2 of the orders made 24 December

1993 on the revocation application be set aside.

2. In place of the said declaration, declare that, without prejudice

to the effect of any order which may be made upon an amendment

application pursuant to s. 105, Petty Patent No. 616154 is and

always has been invalid.

3. The appellants have liberty to make to a Judge of the Court such

application as they may be advised to amend Petty Patent No.

616154 and there be liberty generally to the parties to apply to a

Judge of the Court to seek further orders on the revocation

application and to give effect to the Reasons for Judgment

delivered today and to any Reasons for Judgment on any such

amendment application.

132. There remains the question of costs of the appeal. As we have indicated, various issues were argued. The respondents did not succeed in all of them, but in the end, they maintained the finding on infringement and that on fair basing. The appellants should pay the respondents' costs of the appeal.