Commissioner of Patents v Emperor Sports Pty Ltd

Decision of the Delegate 4 The Patent having been granted, the Australian Football League filed a request under reg 9(2) of the Patents Regulations 1991 (Cth) (the Regulations) seeking re-examination by the Commissioner under s 97(2) of the Act. The request alleged want of novelty and lack of inventive step. Reliance was placed on eight United State patents (the US patents) published between 1958 and 1987. 5 In his decision dated 1 October 2004 the Delegate first considered the claims as granted. He found that the granted claims lacked novelty and an inventive step over all the US patents, except the first. 6 During the re-examination process and prior to the hearing the patentee filed several proposed amendments. The Delegate stated that, given the patentee's submissions at the hearing were based on the proposed amendments, he would address the claims with the propose amendments "as if they were part of the specification". He noted that he "(would) not be determining the allowability of these amendments per se, as this is a separate consideration to that of re-examination". 7 The Delegate rejected the attack on want of novelty. He found that an essential feature of the device was, as a result of the amendments, use in a game of Rugby League or Australian Rules football. Unsurprisingly, such a feature was not disclosed in the US patents. 8 Turning to obviousness, the Delegate applied the test in Wellcome Foundation Limited v VR Laboratories (Aust) Pty Ltd (1981) 148 CLR 262 at 286, recently affirmed in Aktiebolaget Hassle v Alphapharm Pty Ltd (2002) 212 CLR 411 at [50]: "The test is whether the hypothetical addressee faced with the same problem would have taken as a matter of routine whatever steps might have led from the prior art to the invention, whether they be steps of the inventor or not." 9 As to the characterisation of the person skilled in the art for the purposes of s 7(2) and (3) of the Act, the Delegate considered that the person should be identified "in the light of the problem that the invention is directed to solving, and not in the light of the claimed solution". He found that the relevant person would be a person with a good working knowledge of a ball-carrying sport, without that sport particularly being limited to Rugby League or Australian Rules football. Such a person could reasonably include a coach, administrator, referee or umpire, or ex-player. However, we interpolate the comment that before his Honour argument proceeded on the basis, no doubt conformably with the proposed amendments, that the relevant skilled person was more specifically characterised as a Rugby League or Australian Rules football coach, referee, umpire or administrator: see at [100]. 10 As to whether the person skilled in the art would have, in terms of s 7(3), "ascertained, understood and regarded as relevant" the US patents, the Delegate said: "It would not be unreasonable to expect the person skilled in the art to regularly maintain or update their knowledge through trade magazines and the like. I believe it is also reasonable to expect that the notional person skilled in the art, drawn from the group identified, would have researched patent literature to remain informed of events in the field, (following the notion of a diligent searcher from Dyno Nobel [Asia Pacific Ltd v Orica Australia Pty Ltd (2000) 99 FCR 151]. Furthermore, there is nothing before me to suggest that a person skilled in the art drawn from the group including coaches, referees, and administrators, would not be diligent in searching patent literature as a means of keeping up to date in the field." 11 The Delegate concluded that while the amendments attempting to limit the embodiments to Rugby League and Australian Rules football might possibly have the potential to be novel and inventive, there was no support in the specification for such subject matter as required by s 40(2). Therefore, he believed it was "extremely unlikely" such amendments would be allowable under s 102. Accordingly, given that the patentee had been unable to remove lawful grounds for objection, namely lack of novelty and inventive step, "despite their best efforts in proposing a variety of amendments", he revoked the Patent. 12 The patentee having appealed, the Delegate on 3 November 2004, "to avoid uncertainty", issued a formal decision refusing the patentee's amendments on the ground that they would result in the claims claiming matter not in substance disclosed in the specification.

Decision of the primary judge 13 His Honour held at [73]-[74] that the Delegate should have considered and dealt with the application to amend before, or at the time of, the revocation decision. In his Honour's view, there would have been no objection to the Delegate including in the reasons for the revocation decision, as an alternative ground for that decision, his reasons for concluding that, even treating the specification amended as requested, the lawful grounds for objection remained and the Patent must be revoked. However, his Honour noted that the patentee did not submit the amendment decision was invalid and the parties agreed that no injustice had been caused by the course followed by the Delegate. His Honour therefore proceeded to consider the appeal against the disallowance of the amendments. He concluded at [95] that the amendments were allowable. On the present appeal the correctness of his Honour's conclusion is not challenged but the Commissioner takes issue with what his Honour said at [73]-[74] about timing (the timing issue). 14 His Honour then considered the issues of obviousness and novelty. Only the former is relevant for present purposes. 15 His Honour held that the question whether the information in the US patents (a) formed part of the common general knowledge of the skilled person, or (b) was information which such a person, confronted with the problem identified in the complete specification, could reasonably be expected to have ascertained, understood and regarded as relevant, "cannot be known in the absence of evidence. Without evidence, resolution of these issues is a matter of mere speculation." 16 His Honour said that although s 97(2) re-examination takes place ex parte, s 7(2) required the Delegate, and the Court, "to assume the presence of an inventive step in the absence of evidence establishing the matters referred to in s7(2) and(3)". 17 His Honour said at [107] that there was no reason why the approach taken in pre-grant examination and in opposition proceedings should not be taken in relation to post-grant re-examination, namely that it must be clear that a patent would be (or is) invalid before the Commissioner should refuse to grant (or should revoke) it. However, in his view his Honour did not need to rely on that onus. He said at [108] "…in the absence of evidence, the (Delegate) was not at liberty to decide whether a hypothetical person skilled in the art would have ascertained the existence of the (US patents)." 18 Accordingly, his Honour set aside the decisions of 1 October and 3 November 2004 and directed the Commissioner to grant leave to amend the Patent in accordance with the patentee's request.

Nature of the appeal to the Federal Court under s 101(4) 19 Argument on the appeal before us included questions as to the nature of the Commissioner's decision on re-examination under Ch 9 and of the appeal to the Federal Court under s 101(4). We shall deal with the latter first. 20 The appeal before his Honour under s 101(4) was, as his Honour held at [45], and contrary to the submission of the Commissioner before us, a hearing de novo. On such an appeal the court can exercise the wide powers conferred by s 160, including receiving evidence that was not before the Commissioner and permitting the examination and cross-examination of witnesses: Jafferjee v Scarlett (1937) 57 CLR 115 at 119. True it is, any limitation on the subject matter of the Commissioner's decision imposed by statute, such as restricting the decision to certain criteria or grounds, are equally applicable on the appeal: New England Biolabs Inc v F Hoffman-La Roche AG (2004) 141 FCR 1 at [45]-[47]. The Court is exercising a judicial function in determining the same question as the Commissioner did in the exercise of an administrative or executive function. Thus in New England Biolabs, which involved an appeal under s 104(7) against the grant of an amendment to a patent, the Full Court held that provisions of the Act (ss 102 and 104(5)) and the Regulations (regs 10.3-10.5) which provides that certain kinds of amendments must not be allowed were also applicable on the appeal. The powers conferred by s 160 on the Federal Court on the hearing of appeals under the Act did not enable the Court on the appeal to consider matters beyond the ambit of the question as defined by the Act. 21 In the present case, s 98(1) required the Commissioner to "ascertain and report whether, to the best of his or her knowledge, the invention… (a) is not novel; and (b) does not involve an inventive step." For this purpose the prior art base is not to include information made publicly available only through the doing of an act: subs (2). In other words, only information in documentary form is to be considered. Where the Commissioner makes an adverse report in the case of a post-grant re-examination under s 97(2), he or she may, by notice in writing, revoke the patent: s 101(1). 22 In the present case, s 98 did not restrict the Commissioner in a way comparable to the provisions relating to the Commissioner's decision considered in New England Biolabs. The expression "to the best of his or her knowledge" does not have the effect of limiting the material which can be considered on the appeal to that which was before the Commissioner. Nor does it make the question one which turns on the opinion, satisfaction or discretion of the Commissioner, with the consequence that the Court on the appeal is confined to the question whether that opinion, satisfaction or discretion was lawfully reached on the material before the Commissioner; cf Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 274-277. (We do not read "may" in s 101(1) as conferring a discretion, where the report is adverse, not to revoke; we cannot presently see any basis on which it would be justifiable, in such a case, to decline to revoke.) The Commissioner has to report whether, for example, the invention is novel, not whether he or she is satisfied it is novel, or is of the opinion it is novel. While, as already mentioned, the particular decision of the Commissioner considered in New England Biolabs had characteristics not found in ss 98 or 101, the Full Court confirmed the view, held at least since Jafferjee v Scarlett, that appeals to a court from decisions of the Commissioner under patents legislation (and analogous trade mark legislation) involve hearings de novo. Their Honours said at [44]: "The Court approaches the matter for the first time exercising the judicial power of the Commonwealth, not in order to decide whether the executive decision maker was right or wrong, or otherwise to correct error in the executive decision, but to deal with a subject matter, a controversy, for the first time."

Nature of the Commissioner's decision under s 101(1) 23 Senior counsel for the Commissioner submitted that the Commissioner can draw legitimate inferences from the material available to her. He said that his Honour erred in referring to a perceived need for the Commissioner to act only on "evidence". In support of this argument senior counsel said that the stages of re-examination and report (ss 97 and 98), like the stages of initial examination and report (s 45) and acceptance (s 49), involved essentially an inquisitorial procedure. This was in contrast to the stages of opposition before grant (ss 59 and 60) and revocation by the Court after grant (s 138), both of which involved an adversarial procedure. 24 It is not necessary to explore the suggested inquisitorial/adversarial dichotomy because we accept the basic proposition put. The Commissioner is an administrative decision-maker equipped with technical expertise. Subject to the rules of natural justice both common law and statutory (see e.g. s 101(2)), he or she is entitled to make use of that expertise, and draw inferences that may be rationally drawn from technical knowledge, including how skilled persons of various descriptions may act in their respective occupations: R v Milk Board; Ex parte Tomkins [1944] VLR 187 at 197, Kalil v Bray [1977] 1 NSWLR 256 at 261, R v Industrial Appeals Court; ex parte Maher [1978] VR 126 at 142, Rodriguez v Telstra Corporation Ltd (2002) 66 ALD 579 at 585, Tisdall v Health Insurance Commission [2002] FCA 97 at [103]. On an appeal by way of hearing de novo the judge would not be a person credited with technical expertise of his or her own. In such event the judge may be able to take into account conclusions of the Commissioner based on his or her expertise, subject of course to the rights of other parties to call rebutting or supporting evidence.

Was his Honour's conclusion on obviousness correct? 25 Since the hearing before his Honour was a hearing de novo, the question was whether, on the material available to him (there being no additional material to that before the Delegate) the alleged invention did not involve an inventive step. In particular, were the US patents part of the prior art base as extended by a s 7(3) document? We conclude that they were not, because the relevant skilled person could not reasonably have been expected to have ascertained them. The consequence is that we agree with the conclusion reached by his Honour, although for different reasons. 26 Prior to the introduction of the Act in 1990 the position was that in determining obviousness the Court or the Commissioner could not consider disclosures in a document which, although publicly available, had not become part of common general knowledge: Minnesota Mining and Manufacturing Co v Beiersdorf (Australia) Ltd (1980) 144 CLR 253. It was not enough that the skilled person might have found such a document by search. 27 The Act changed this by adopting the Industrial Property Advisory Committee (IPAC) recommendation in its report Patents, Innovation and Competition in Australia (1984): Alphapharm at [16], Firebelt Pty Ltd v Brambles Australia Ltd (2002)188 ALR 280 at [32]-[36]. By s 7(3) what is now relevant is common general knowledge plus one document (or combination) which · a skilled person · could reasonably be expected to have · ascertained, · understood, and · regarded as relevant.

28 The reasonableness of expectations as to what the skilled person could do has to be assessed in the light of the characteristics of the relevant hypothetical skilled person and the particular problem faced, the overcoming of which is said to involve the inventive step: see the passage from Wellcome at 286 ([8] above), cited in Alphapharm at [50]. The context of that passage in Alphapharm was the High Court's consideration of the "matter of routine" element, but their Honours do not suggest the problem-facing element was not relevant, or might cease to be relevant under the 1990 Act. Obviousness is not an abstract issue, but one which has to be determined in the context of a particular alleged inventive step. 29 In the Oxford English Dictionary, the verb "ascertain" has two basic meanings, "I To make subjectively certain; i.e. a person certain of a fact, or a thing certain to the mind" and "II To make (a thing) objectively certain, to fix". Within I, the "only current use" is "5. To find out or learn for a certainty by experiment, examination, or investigation; to make sure of, to get to know". 30 In s 7(3) "ascertained" is used in the last-mentioned sense. This is a meaning entirely consistent with the word "find" as used by IPAC. The Committee in its recommendation (at 45) for what became s 7(3) used the expression "reasonably have been expected to find, understand and regard as relevant". Senior counsel for the Commissioner accepted that the change from "find" to "ascertained" appears to be no more than a matter of drafting stylistic preference. Likewise in Dyno Nobel Asia Pacific Ltd v Orica Australia Pty Ltd (2000) 99 FCR 151 at [190] Dowsett J treated "ascertained" as meaning "discovered" or "found". A skilled person could not be reasonably expected to find something unless that person could reasonably be expected to know where to look. 31 Section 7(3) does not assume an ascertainability by any and all skilled persons, of whatever description, of all publicly available prior art documents anywhere in the world. Nor does it assume that the skilled person has found the document in question, so that the only question is whether he or she has understood it and regarded it as relevant. Such a construction ignores the elements of expectation and reasonableness, as applied to the particular skilled person. 32 In considering who is the appropriate skilled person, and what such person might be reasonably expected to do when faced with the problem in hand, sometimes, indeed often, evidence may not be necessary. In many instances the answers will be obvious to the parties, the Commissioner and the Court. In high technology areas for example it will usually be assumed that the relevant skilled person will be familiar with the major professional or academic journals and could reasonably be expected to consult them. No evidence is required. 33 In Minnesota Mining Aikin J said at 294-295 (citations omitted): "There may be some fields of endeavour in which those who work therein study and make themselves familiar with all patent specifications as they become available for inspection in one or in many countries so that what was contained therein becomes common general knowledge in that particular trade or field of manufacture in the country in question. But this is not so in all fields or in all countries. There was no evidence in the present case that those working on Australia in the field of adhesives or of surgical tapes followed such a practice or that any of the specifications relied upon was part of the common general knowledge of those working in those fields in Australia. The respondent relied upon a number of prior specifications which had been available in Australia for public inspection before the priority date as providing a basis for the argument that the invention claimed was obvious. For the reasons which I have set out above I do not regard such specifications as capable of sustaining that argument without evidence that they were part of common general knowledge at that time." Of course, that case was decided under the pre-1990 law which did not make provision for documents which only became part of the prior art information as a result of s 7(3) ascertainment. Nevertheless the statement confirms that when identification of the relevant prior art is in dispute it is necessary to have either evidence or, which amounts to the same thing, reliance by an administrative decision-maker of expertise appropriate to the office. 34 The Australian Patent Office Manual of Practice and Procedure says (par 4.2.5.1): "Examiners should generally proceed on the basis that it would be reasonably expected that the person skilled in the art would conduct a search of patent literature, including the patent specifications of major countries, and that [subject to certain exceptions not relevant for present purposes] any patent document located in a patentability search would reasonably be expected to be ascertained by the person skilled in the art." We would not wish to cast any doubt on the general correctness of that statement. However, in its own terms it allows that it is not necessarily universally applicable; there may be situations where it would not be reasonable to have such an expectation. 35 The present case is such a situation. Simply stated, we think it self-evident that it could not be reasonably expected that a Rugby League or Australian Rules coach, referee, umpire or administrator would conduct a search in the United States Patent Office. Such an expectation would be fanciful rather than reasonable.

Timing issue 36 We think that his Honour was correct in holding at [73]-[74] that the Delegate should have considered and dealt with the application for leave to amend before, or at least at the same time as, deciding whether to revoke. As his Honour pointed out, it would be illogical to deal with an application for amendment after a patent had been revoked.

Orders 37 The appeal will be dismissed with costs. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Heerey, Kiefel and Bennett.

Associate: Dated: 10 March 2006 Counsel for the Appellant: S Gageler SC and K J Howard

Solicitor for the Appellant: Australian Government Solicitor

Counsel for the Respondent: SCG Burley and C L Cochrane