The knowledge requirement
237 Houghton submitted that Dometic Sweden should be found to have known of the best method of producing the Coandă effect in the invention as at 7 November 2016. As already seen, it submitted that this was so because Dometic Sweden had either "actual" or "constructive" knowledge. It used the latter term to encompass knowledge which may be imputed to Dometic Sweden.
238 In my view, the terms in which s 40(2)(aa) is expressed indicate that it refers to the actual knowledge of the applicant of the best method of performing the invention or, as Beach J expressed it in GlaxoSmithKline at [758], "the patent applicant's relevant subjective state of mind". Ordinarily, one cannot disclose what one does not know, although there may be circumstances in which a person can be taken to have knowledge of matters to which the person has ready access. The fact that the law, in some circumstances and for some purposes, deems a person to be imputed with knowledge does not alter the capacity in fact of the person to disclose matters of which he or she is unaware.
239 This understanding is supported by the approach in the authorities concerning s 21(1) of the Insurance Contracts Act 1984 (Cth) to which the Respondents referred. That subsection imposes an obligation on insureds to disclose to insurers before entering into an insurance contract every matter "known" to the insured being a matter that:
(a) the insured knows to be a matter relevant to the decision of the insurer whether to accept the risk and, if so, on what terms; or
(b) a reasonable person in the circumstances could be expected to know to be a matter so relevant, having regard to factors including, but not limited to:
(i) the nature and extent of the insurance cover to be provided under the relevant contract of insurance; and
(ii) the class of persons who would ordinarily be expected to apply for insurance cover of that kind.
240 In Permanent Trustee Australia Ltd v FAI General Insurance Company Ltd [2003] HCA 25; (2003) 214 CLR 514, McHugh, Kirby and Callinan JJ referred to the two types of knowledge contemplated by these subparagraphs as "actual" and "constructive", at [30]. See also Hammer Waste Pty Ltd v ABE Mercantile Mutual Ltd [2002] NSWSC 1006 at [56].
241 Dometic referred to Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2017] FCAFC 50 in which, in relation to a pleading of accessorial liability, the Full Court said that "[a] mental state such as knowledge can only be attributed to a corporation by attributing it to one or more of the corporation's officers or employees", at [60]. Its submission was that it had not been shown that any officer or employee of Dometic Sweden had known of the Coandă effect or how that effect had been deployed in the invention.
242 On my understanding, the principle is wider than that stated in CFMEU v BHP Coal. In Krakowski v Eurolynx Properties Ltd [1995] HCA 68, (1995) 183 CLR 563 at 582-3, the majority (Brennan, Deane, Gaudron and McHugh JJ) approved the following statement by Bright J in Brambles Holdings Ltd v Carey (1976) 15 SASR 270 at 279:
Always, when beliefs or opinions or states of mind are attributed to a company it is necessary to specify some person or persons so closely and relevantly connected with the company that the state of mind of that person or those persons can be treated as being identified with the company so that their state of mind can be treated as being the state of mind of the company. This process is often necessary in cases in which companies are charged with offences such as conspiracy to defraud.
243 That is to say, the attribution of knowledge of a person to a company depends on whether the person is "so closely and relevantly connected" with the company that his or her state of mind can be treated as the state of mind of the company. That such a person need not be an officer or employee of the company is illustrated by the decision in Krakowski v Eurolynx itself, as one of the persons whose knowledge was attributed to Eurolynx in connection with its sale of real estate was a selling agent. The majority said that the knowledge of the selling agent and of an officer of Eurolynx "was the knowledge of Eurolynx, for they were the persons who were responsible for the initial negotiations and who had set the scene in which the representation had been made", at 582.
244 Some of the cases concerning s 21 of the Insurance Contracts Act support the view that, in some circumstances, the knowledge of agent may be the knowledge of a corporate entity. See Hammer Waste at [56]; Commercial Union Assurance Co of Australia Ltd v Beard [1999] NSWCA 42, (1999) 47 NSWLR 735 at [37] (Davies AJA); Deaves v CML Fire and General Insurance Co Ltd [1979] HCA 12, (1979) 143 CLR 24 at 69 (Jacobs J); Ford Excavations Pty Ltd v Do Carmo (1981) 2 NSWLR 253 at 266 (Hutley JA); NIML Ltd v Man Financial Australia Ltd [2006] VSCA 128 at [38] (Nettle JA), but cf Permanent Trustee v FAI at [30].
245 Dometic also sought to support its submission that s 40(2)(aa) refers to the actual knowledge of an applicant by reference to authorities concerning the nature of the "knowing" assistance requirement in accessorial liability: Giorgianni v The Queen [1985] HCA 29, (1985) 156 CLR 473 at 504-7; Pereira v Director of Public Prosecutions (1982) 82 ALR 217 at 219-20, and by reference to Australian Competition and Consumer Commission v Safety Compliance Pty Ltd (in liq) [2015] FCA 211 in which Farrell J said, at [156], that the requirement is for actual, rather than constructive, knowledge. I do not regard these authorities as being particularly helpful in the present context, and need not refer to them further.
246 Given my finding that the relevant date for the purposes of s 40(2)(aa) is 7 November 2016 when Dometic Sweden filed the application for the Patent, the critical question is whether it had knowledge of the best method of performing the invention as at that date.
247 Houghton's pleaded case was that Dometic Sweden had actual knowledge of the best method at that date because it had sources of that knowledge under its control, being the files of Mr Henshall and the files of Collison & Co. This was so, Houghton submitted, because New Aircommand was Dometic Sweden's predecessor in title and because Dometic Sweden is the ultimate holding company of New Aircommand.
248 I will consider those grounds shortly but before doing so, will address two different bases which Houghton advanced in the final submissions. These were that, as at 7 November 2016, Dometic Sweden had the knowledge of New Aircommand because the knowledge of the proprietor of an invention is to be imputed to an assignee and, or in the alternative, because the knowledge of a subsidiary company is to be imputed to its parent.
249 In relation to the first of these bases, Houghton relied on the decision of Beach J in GlaxoSmithKline. In that case, the circumstances were that SmithKline Beecham PLC had applied for the patent on 12 April 2001 and had been granted it on 5 January 2007. SmithKline Beecham PLC assigned the patent to GlaxoSmithKline Dungarvan Ltd on 20 September 2013, and it then assigned the patent to GlaxoSmithKline. Thus, GlaxoSmithKline was the successor in title to the patent. The early development work for the patent had been carried out by another entity, Sterling Winthrop Pty Ltd but, from April 1995, the development work had been carried out by SmithKline Beecham. Beach J proceeded on the basis that the knowledge of Sterling Winthrop would be taken to be part of the knowledge of the patent applicant, SmithKline Beecham, even though the corporate relationship, if any, between Sterling Winthrop and SmithKline Beecham had not been disclosed in the evidence.
250 Houghton submitted that GlaxoSmithKline was a case in which the Court had held it appropriate for the knowledge of the proprietor of an invention to be imputed to the assignee of that invention. I do not regard GlaxoSmithKline as containing a decision to that effect. On my understanding, in the passage on which Houghton relied, Beach J found only that the entity taking over the development of a patent from another could be taken to have the knowledge concerning the development acquired by its predecessor. That appears to have been a finding of fact concerning only the knowledge of the subsequent developer of the invention based on the evidence in GlaxoSmithKline. Beach J did not address the question of whether a later assignee of the patent had acquired the knowledge of the assignor.
251 In relation to the knowledge of Dometic Sweden as the ultimate holding company of New Aircommand, Houghton referred to Australian Securities and Investments Commission v P Dawson Nominees Pty Ltd [2008] FCAFC 123; (2008) 169 FCR 227. The proceedings giving rise to that decision concerned a claim by P Dawson Nominees Pty Ltd (PDN) for losses alleged to have been suffered by reason of the claimed failure of Multiplex Limited to comply with its continuous disclosure obligations under the ASX Listing Rules. PDN sought the production of documents held by ASIC arising from its investigation of the conduct of the Multiplex Group. Multiplex Group contended that public interest immunity precluded ASIC from producing the documents. In determining that issue, the Full Court considered that PDN should be able to obtain the documents it sought directly from Multiplex Group. Its reasoning on that topic included the following passage:
[60] The public announcements Multiplex made, or failed to make, to the ASX and others over the relevant period will be a matter of public record, the proof of which should present no difficulty to PDN. The construction problems in the United Kingdom, particularly those concerning the Cleveland Bridge subcontract, should be the subject of the usual massive documentation that accompanies major construction projects. The internal reporting and recording documents of Multiplex should be discoverable in the ordinary course of this litigation. In any case, it is alleged that the company constructing Wembley Stadium, Multiplex Constructions (UK) Ltd, was a wholly owned subsidiary of the Multiplex Group, which group included the first respondent to the main proceeding, the ASX listed Multiplex Ltd. It seems inconceivable that Multiplex Ltd would not be fixed with the knowledge of its subsidiary contractor. So the case really boils down to an objective assessment of what in fact was happening at Wembley and whether or not that assessment should have been disclosed by Multiplex, so as to properly inform the market.
(Emphasis added)
252 Houghton submitted that this passage provides authority for the proposition that knowledge held by a subsidiary may be imputed to the parent company.
253 I do not regard the Full Court as enunciating a general principle to that effect. The emphasised sentence in the passage quoted indicates that the Court was expressing a view about the particular circumstances then under consideration, namely, that in those circumstances it was "inconceivable" that Multiplex would not have the knowledge of its subsidiary. The passage in Dawson Nominees should be understood as expressed in the context that the law recognises that subsidiary companies are separate and independent legal entities (Walker v Wimborne [1978] HCA 7, (1976) 137 CLR 1 at 6-7) and that generally the law does not impute to a parent company the knowledge of a subsidiary by reason only of the corporate relationship: BHP Billiton Finance Ltd v Federal Commissioner of Taxation [2009] FCA 276 at [100]; Morwood v Chemdata Pty Ltd (1995) 17 ATPR 41-429 at 40,838; Chandler v Cape PLC [2012] 1 WLR 3111, [2012] 3 All ER 640 at [69].
254 Houghton did not point to any feature of the relationship between New Aircommand and Dometic Sweden other than their corporate relationship to warrant the attribution of New Aircommand's knowledge to Dometic Sweden. Accordingly, both of the alternative bases advanced by Houghton in the final submissions are rejected.
255 I return to Houghton's pleaded case. It was apparent that Houghton used the expression "source of knowledge" as a reference to a medium containing the relevant information. In effect, its claim was that Dometic Sweden was in control of the mean of access to the relevant information and thereby had that knowledge.
256 There are a number of difficulties with Houghton's submission. First, although there may be some circumstance in which a person's control of a means of access to information may be equated with knowledge of the information (see, for example, Hammer Waste at [56]), there is no general principle to that effect. Control of a source of knowledge cannot be equated with knowledge of the information contained in that source. One's possession of an encyclopaedia does not mean that one knows the content of the encyclopaedia. The question is instead a factual one, turning on the nature of the information in question and the nature of the access to it, including the surrounding circumstances.
257 Secondly, Dometic discovered Mr Henshall's files and Houghton was able to tender those parts of it which they considered pertinent. These comprised four pages of CAD drawings, and two pages relating to the video to which reference was made earlier. One of these two pages was a still shot from the video and the other contained data concerning the creation and use of the video. Two pages of the CAD drawings contained designs which Mr Henshall did not persist with in the development of the IBIS 3, and are of limited assistance presently. Two pages showed drawings of the outlets and of the adjacent recess used in the IBIS 3. However, they did not include any accompanying description of the design, let alone an explanation concerning the requirement for the upper and lower surfaces of the outlets to be complementary. The two pages were a limited source of information only and, in my view, insufficient to indicate to the reader that the particular profile of the outlets had any significance in the performance of the air conditioning system. I consider that they would have been inadequate to convey to Dometic Sweden knowledge of the best method of performing the invention.
258 The third difficulty is that files of Collison & Co were not tendered. Dometic claimed privilege with respect to those files - s 200 of the Act: Trade Practices Commission v International Technology Holdings Pty Ltd (1995) 31 IPR 466; Australian Mud Co Pty Ltd v Coretell Pty Ltd [2014] FCA 200, (2014) 106 IPR 49. That being so, the Court cannot make findings as to their content.
259 Fourthly, the Respondents did not identify any individual whose knowledge was, in accordance with the principles set out earlier, to be regarded as the knowledge of Dometic Sweden.
260 I record that Houghton did not contend that the knowledge of Mr Henshall should continue to be attributed to Dometic Sweden after his employment had ceased. Nor did Houghton contend that the knowledge of the patent attorney within Collison & Co who carried out the work on the Patent application on behalf of Dometic Sweden should be attributed to it.
261 For these reasons, I am not satisfied that Houghton has shown that Dometic Sweden knew, as at 7 November 2016, the best method of performing the invention. That being so, this ground of alleged invalidity fails.