Garford Pty Ltd v Dywidag-Systems International Pty Ltd

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 650 of 2014

JUDGE: YATES J DATE: 26 SEPTEMBER 2014 PLACE: SYDNEY

Background 1 This proceeding is an appeal brought under s 60(4) of the Patents Act 1990 (Cth) (the Act) from a decision of a delegate of the Commissioner of Patents (the Commissioner) given in opposition proceedings concerning patent application 2009329824: Garford Pty Ltd v Dywidag-Systems International Pty Ltd [2014] APO 37. The invention for which application is made relates to an apparatus and method for manufacturing rock bolts (in the form of cable bolts) for securing the roof or wall of a mine, tunnel or other ground excavation. 2 The opposition was partly successful. The delegate found that claims 18 to 23 of the complete specification filed in respect of the application (the specification) were not fairly based. However, the remaining grounds of the opposition (which included the grounds that the invention as claimed lacked an inventive step and that claims 15 to 17 were not fairly based) were not established. The delegate concluded that the problems he had identified with the claims could be overcome by simple amendments. He allowed the patent applicant, Dywidag-Systems International Pty Ltd, who is the respondent in the present appeal (the respondent), a period of 60 days from the date of the decision, 5 June 2014, to propose amendments. 3 An appeal from a decision of the Commissioner must be filed within 21 days of the date of the decision: r 34.24(1) Federal Court Rules 2011 (Cth) (Federal Court Rules). The appellant, Garford Pty Ltd, filed a notice of appeal on 26 June 2014. Its notice of appeal, as now amended, challenges the delegate's rejection of the opposition in relation to both lack of inventive step and fair basis in respect of claims 15 to 17. By the time that the appellant had filed its notice of appeal, the respondent had not applied to amend the specification on which the delegate's decision was given. 4 On 18 August 2014, the respondent filed an interlocutory application seeking to amend the specification. It did so in reliance on s 105(1A) of the Act, which provides: If an appeal is made to the Federal Court against a decision or direction of the Commissioner in relation to a patent application, the Federal Court may, on the application of the applicant for the patent, by order direct the amendment of the patent request or the complete specification in the manner specified in the order. 5 Section 105(1A) of the Act was introduced by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (Cth) to address the problem that, in an appeal from a decision of the Commissioner, the Court was confined to considering the very same subject matter that was before the Commissioner. Thus, in an appeal from a decision of the Commissioner in opposition proceedings, in which the opposition was successful but the patent applicant was afforded an opportunity to propose amendments to the complete specification to overcome the objections made (as here), the Court, when considering the appeal, was limited to dealing with the specification in the form it took at the hearing before the Commissioner and could not take into account amendments subsequently proposed by the patent applicant, even when those amendments would overcome the grounds of objection that had been found: see the discussion in New England Biolabs Inc v F Hoffmann-La Roche AG (2004) 141 FCR 1 at [44]-[47]. This limitation on the exercise of the Court's original jurisdiction to hear such appeals added complexity to the appeals process and to the resolution of opposed patent applications. Section 105(1A) addresses this problem by giving the Court power to consider and decide upon any amendments proposed by the patent applicant while the appeal is on foot.

The present hearing 6 The amendments sought by the respondent are directed to: correcting certain errors or mistakes in the specification; and seeking to overcome the delegate's finding that claims 18 to 23 are not fairly based. 7 The present hearing concerns the amendments directed to correcting errors or mistakes in the specification. The appellant does not oppose these amendments. It does not wish to be heard at this hearing and I have excused it from attendance. 8 Notice of the proposed amendments has been given to the Commissioner who, in written correspondence, has said that she "has no concerns that she wishes to raise in relation to" them. The Commissioner has not sought to appear at the hearing of this part of the respondent's application. 9 The balance of the amendments sought by the respondent will be dealt with in the context of the hearing of the substantive appeal. This course was proposed by both parties as the most efficient means of determining that question. The same course was not proposed in relation to the amendments the subject of the present hearing because the parties considered it to be desirable that those amendments be considered now so that the appeal can be conducted on the basis of a specification that is free from such errors and mistakes.

The amendments sought at this hearing 10 The amendments sought at this hearing address four problems: Claims 11, 12, 13, 14 and 16 contain claim dependency (numbering) errors. Claims 6 and 12, together with an accompanying consistory statement on page 3 of the specification, erroneously refer to an "upstream" portion of the cable when describing the action of the downstream accumulator. The reference to the "upstream" portion should be, in each case, to the "downstream" portion. Claim 9 erroneously includes the word "accumulator" after the words "take-up reel". The claim should simply refer to the "take-up reel". Claim 23, and the consistory statement on which that claim is based on page 7 of the specification, erroneously refer to a method of manufacturing a cable bolt that comprises, as one step, allowing an upstream clamp to be displaced away from a downstream clamp during "classic" recovery of the cable. The word "classic" should be "elastic".

The power of the Court to direct amendment 11 The Court cannot direct an amendment under s 105 if the amendment is not allowable under s 102 of the Act: s 105(4) of the Act. Relevantly, s 102 provides: Amendment of complete specification not allowable if amended specification claims or discloses matter extending beyond that disclosed in certain documents (1) An amendment of a complete specification is not allowable if, as a result of the amendment, the specification would claim or disclose matter that extends beyond that disclosed in the following documents taken together: (a) the complete specification as filed; (b) other prescribed documents (if any). Certain amendments of complete specification are not allowable after relevant time (2) An amendment of a complete specification is not allowable after the relevant time if, as a result of the amendment: (a) a claim of the specification would not in substance fall within the scope of the claims of the specification before amendment; or (b) the specification would not comply with subsection 40(2) or (3). Meaning of relevant time (2A) For the purposes of subsection (2), relevant time means: (a) in relation to an amendment proposed to a complete specification relating to a standard patent - after the specification has been accepted; or (b) in relation to an amendment proposed to a complete specification relating to an innovation patent - after the Commissioner has made a decision under paragraph 101E(1)(a) in respect of the patent. … 12 Importantly, however, s 102(3) provides, relevantly: Section does not apply in certain cases (3) This section does not apply to an amendment for the purposes of: (a) correcting a clerical error or an obvious mistake made in, or in relation to, a complete specification; or … 13 Here, the respondent says that the errors identified above in [10] are both "clerical errors" and "obvious mistakes" for the purpose of s 102(3)(a) of the Act. 14 In The Queen v Commissioner of Patents; Ex Parte Martin (1953) 89 CLR 381, Williams ACJ said (at 395): … A clerical error, I would think, occurs where a person either of his own volition or under the instructions of another intends to write something and by inadvertence either omits to write it or writes something different. … 15 Fullagar J (with whom Kitto J and Taylor J agreed (at 408)) said (at 406), that the expression "clerical error" is of a "somewhat elastic character". After considering various dictionary meanings of the word "clerical", his Honour continued: … Probably no one would deny that a clerical error may produce a significant, and even profound, effect as for example, in a case in which a writer or typist inadvertently omits the small word "not". But the characteristic of a clerical error is not that it is in itself trivial or unimportant, but that it arises in the mechanical process of writing or transcribing. … 16 In General Tire & Rubber Company (Frost's) Patent [1972] RPC 271, Graham J (at 279) considered an "obvious mistake" to be one which: … involves that the instructed public can, from an examination of the specification, appreciate the existence of the mistake and the proper answer by way of correction. 17 In reaching that conclusion, his Lordship distinguished between such a mistake and a mistake that had been "obviously made". His Lordship (at 278) explained the distinction as follows: It is the mistake which must be obvious and not the fact that it has been made. This implies, to my mind, that both the fact of mistake and the correction necessary must be clear to the reader's mind, and it is not enough if he merely appreciates the presence of a mistake. If, in a mathematical context, it is said "2 and 2 make 5", the reader would immediately say: "5 is an obvious mistake for 4". If, however, there is more than one possible correct answer to the question, particularly where the answers may depend on intention or judgment, the reader would say: "Obviously a mistake has been made but I cannot tell you what is the right answer". The wording of the section itself therefore, to my mind, shows an intention in favour of the first construction rather than the second. 18 In the course of considering that question, his Lordship observed (at 277) that, for the purpose of correcting an obvious mistake: … it does not matter that the claim may be enlarged by the amendment. 19 Both these cases accept that the correction of clerical errors and obvious mistakes may involve the making of very significant amendments to the specification and, in particular, the claims. Yet, such amendments are allowable if they are truly "clerical errors" or "obvious mistakes". 20 In DSI Australia (Holdings) Pty Ltd v Garford Pty Ltd [2011] FCA 1411, when delivering ex tempore reasons, I drew attention to what I perceived to be a possible tension between s 105(4) and s 102(3) of the Act, saying (at [14]): 14 As noted above, s 102(3) provides that s 102 does not apply to an amendment for the purpose of correcting a clerical error or an obvious mistake made in or in relation to a complete specification. I am inclined to the view that the reference in claim 6 to claim 4 is at least an obvious mistake. However, s 105(4) provides that a court is not to direct an amendment that is not allowable under s 102. That provision raises what might be a tension with s 102(3) of the Act. It is not necessary for me to resolve that question, because I am satisfied that the amendment which is now proposed would not fall foul of either s 102(1) or s 102(2) of the Act. 21 On further consideration, I am satisfied that there is no such tension. Section 105(4) is an injunction against making any amendment that is "not allowable". Section 102 specifies the criteria against which an amendment is "not allowable". Section 102(3) exempts from the purview of s 102 clerical errors and obvious mistakes. Thus, if the Court is satisfied that the amendment sought is for the purpose of correcting a clerical error or an obvious mistake made in, or in relation to, a complete specification, it is not necessary to consider the criteria in s 102 by which an amendment is to be adjudged as "not allowable". This is the basis on which I proceeded in Vringo Infrastructure, Inc v ZTE (Australia) Pty Ltd [2013] FCA 1152, without further discussion on the point.

Consideration 22 I am satisfied that the amendments proposed at this hearing are amendments for the purpose of correcting clerical errors or obvious mistakes, and that they fall into the exception under s 102(3). 23 In the opposition hearing below, the delegate treated these errors or mistakes as clerical errors. He said: 10. It is immediately apparent (and I noted so at the hearing) that there are a small number of dependency issues with these claims. Specifically: (i) given their dependencies, claims 11-14 are identical in scope to claims 3, 6-8; and (ii) method claim 16 is appended to apparatus claim 10. 11. While I will consider the claims as they are appended at present, DSI advised after the hearing that the claimed dependencies should have been (and would be amended after my decision to be) as follows: Claim 11: The apparatus of claim 10; Claim 12: The apparatus of claim 10; Claim 13: The apparatus of claim 12; Claim 14: The apparatus of claim 10; and Claim 16: The method of claim 15. 12. It is also apparent that claim 6 refers to an upstream portion of the cable when referencing a downstream accumulator. While Garford originally raised a clarity issue in their SGP with respect to this claim, it was not pursued at the hearing since it was clear that "upstream portion" was a clerical error and clearly should have been referring to the "downstream portion" of the cable. I agree. 13. Similarly, Garford did not pursue their clarity point with respect to "said take-up reel accumulator" in claim 9 since it was readily apparent that "accumulator" was a mistaken addition. A similar position was taken with the phrase "classic recovery" in claim 23 which was clearly a clerical error that clearly should have said "elastic recovery". Again, I agree.

Advertising 24 There is one final matter to which I should refer. Section 105(2) of the Act provides that orders under s 105(1) (dealing with an amendment to a patent request or complete specification in proceedings before the Court other than an appeal of the present kind) and s 105(1A), can be made subject to such terms (if any) as to costs, advertisements or otherwise, as the Court thinks fit. 25 Rule 34.41 of the Federal Court Rules requires an applicant for orders under s 105(1) to provide an advertisement, meeting certain requirements, to the Commissioner, which the Commissioner must then publish in the Official Journal. In terms, r 34.41 is specific to orders under s 105(1), and makes no mention of orders under s 105(1A). 26 Prior to the enactment of s 105(1A), amendments sought to be made to a patent specification in circumstances such as the present were dealt with by the Commissioner. The practice, as I understand it, was to advertise the application for those amendments. On that understanding, it would seem appropriate to follow a similar practice, unless there is good reason not to do so. Given the nature of the amendments sought in this hearing, the Commissioner's attitude to the amendments, and the fact that the appellant has not opposed them (while opposing the balance of the amendments directed to overcoming the fair basis objection), I am satisfied that no practical purpose would be served by advertising the application for these amendments. However, out of abundant caution, I will make orders for advertising the respondent's application for its more substantive amendments directed to overcoming the fair basis objection, which remains to be considered by the Court as the same time as the appeal.

Disposition 27 In all the circumstances, I will allow the amendments proposed at this hearing. Orders, as presently sought by the respondent, will be made. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates.