Mont Adventure Equipment Pty Ltd v Phoenix Leisure Group Pty Ltd

Federal Court of Australia (Full Court)|2009-07-07|Before: Jagot JJ, Emmett J

REASONS FOR JUDGMENT EMMETT J: 1 This appeal concerns the effect of s 24 of the Patents Act 1990 (Cth) (the 1990 Act) and rr 2.2 and 2.3 of the Patents Regulations 1991 (Cth) (the Regulations). The provisions deal with the grace period afforded to a patentee in respect of an attack on the validity of a patent on the ground of lack of novelty or inventive or innovative step by reason of prior acts of publication by the patentee or patent applicant. 2 Division 2 of Part 3 of Chapter 2 of the 1990 Act deals with "Matters not Affecting Validity". Section 24, which is in Division 2, relevantly provides that, for the purposes of deciding whether an invention is novel or lacks an inventive step or lacks an innovative step, if a patent application in respect of the invention is made within the prescribed period, the decision maker must disregard any information made publicly available through any authorised or consensual publication or use of the invention in the prescribed circumstances. Under r 2.2(1A), a prescribed circumstance is that there was a publication or use of the invention within 12 months before the filing date of the complete application. Under r 2.3(1A), if an applicant relies on that circumstance, the prescribed period is the period of 12 months after the information was first made publicly available. 3 Thus, the effect of s 24 is that, for the purpose of deciding whether an invention is novel or lacks an inventive step or lacks an innovative step, the decision maker must disregard any information made publicly available, through any authorised or consensual publication, or use, or use of the invention within 12 months before the filing date of the complete application, if a patent application for the invention is made within 12 months after the information was first made publicly available. The question in dispute in the appeal concerns the meaning of the phrase "the filing date of the complete application". 4 The circumstances in which the question arises are not in dispute. The appellant, Mont Adventure Pty Ltd (Mont) is the holder of Australian Innovation Patent Number 2006100978 in respect of a travel pack (the Innovation Patent). Mont commenced a proceeding against the respondent, Phoenix Leisure Group Pty Ltd (Phoenix), alleging that Phoenix has infringed the Innovation Patent. In its defence and cross-claim filed in the proceeding, Phoenix impugns the validity of the Innovation Patent on the ground that the claimed invention the subject of the Innovation Patent is not novel or, alternatively, does not involve an innovative step. 5 On 13 May 2005, Mont filed a complete application, including a complete specification, for a standard patent (the Standard Patent Application), being Australian Patent Application Number 200524456. On 22 November 2006, Mont filed its complete application, including a complete specification, for the Innovation Patent. The application for the Innovation Patent was filed as a divisional application under s 79B of the 1990 Act. Section 79B(1)(a) provides that, where a complete patent application (Parent Application) for a patent is made, the applicant may make a further complete application for a patent (Divisional Application) for an invention disclosedin the specification filed in respect of the Parent Application. The application for the Innovation Patent relied on the Standard Patent Application as the Parent Application for the purposes of s 79B. 6 In impugning the Innovation Patent, Phoenix relies upon the undisputed fact that the Astro 65 and Astro 80 model travel packs of Mont were first offered for sale to the public in Australia in October 2004 and that, at all times since then, those travel packs embodied each of the integers of claims 1 to 5 of the Innovation Patent. 7 A preliminary question was stated for the determination by the primary judge. The question was whether, for the purposes of determining the validity of the Innovation Patent, the filing date of the complete application, as referred to in r 2.2(1A) of the Regulations, was: · the filing date of the complete Standard Patent Application, namely, 13 May 2005; or · the filing date of the complete application for the Innovation Patent, namely, 22 November 2006. 8 If the filing date was 22 November 2006, the offering for sale in October 2004 of the travel packs would render the Innovation Patent invalid. On the other hand, if 13 May 2005 was the relevant date, the first public offering for sale was less than 12 months before the filing of that application and that specific ground of invalidity would be unavailable. The primary judge answered the preliminary question in favour of Phoenix and ordered that the claim for infringement of the Innovation Patent be dismissed and that the Innovation Patent be revoked. Mont appeals from those orders. 9 On the hearing of the appeal, the Court granted leave to the Institute of Patent and Trade Mark Attorneys of Australia (IPTA) to intervene in the hearing to make submissions in support of the contentions advanced by Mont. Leave was granted on terms that IPTA would bear, in any event, any additional costs of the parties incurred in dealing with any oral or written submissions made by IPTA. 10 Regulation 3.12(1) provides that the priority date of a claim of a specification is the earliest of several dates. If the specification is a complete specification filed in respect of a Divisional Application and the claim is fairly based on matter disclosed in the specification of the Parent Application, the priority date for the specification filed in respect of the Divisional Application is the date that would have been the priority date of the claim if it had been included in the specification of the Parent Application (r 3.12(1)(c)). However, under s 79B(1), there is no requirement for a Divisional Application to be fairly based on the Parent Application. The only requirement is that the invention claimed in the Divisional Application be disclosed in the specification of the Parent Application. 11 Phoenix contends that the rationale for the construction accepted by the primary judge is to preclude a claim that is not fairly based on the Parent Application from having the benefit of the grace period, notwithstanding the later validity date. Thus, Phoenix says that the drafters responsible for the scheme intended to deprive a Divisional Application of the benefit of the grace period in order to ensure that the Divisional Application, which by definition must be for an invention disclosed in the Parent Specification, does not have the benefit of the grace period in respect of a claim that is not fairly based on matter disclosed in the Parent Specification. Phoenix says that that somewhat heavy handed mechanism was to avoid the complicated drafting that would have been required to deal with all circumstances on a fair and equitable basis. 12 A more likely explanation is that those responsible for the drafting of the scheme assumed that, in substance, there was no distinction between the concept of an invention disclosed in the specification of the Parent Application and a claim for an invention being fairly based on matter disclosed in the specification of the Parent Application. Thus, the scheme is as follows: · relevant information is published or used on a particular date (the First Date); · time begins to run for the purposes of the condition in s 24 from the First Date; · in order to invoke the protection afforded by s 24, the condition must be satisfied by filing a patent application, whether it be a provisional application or a complete application, at any time within 12 months after the First Date; · if a provisional application is filed, then a patentee who has published or used information can only obtain the protection afforded by s 24 if a complete application is also filed within 12 months from the First Date; · if a complete application is filed within a shorter period than 12 months from the first date, a patentee who has published information would obtain protection for a period extending to a date before the First Date, even if there were no relevant publication or use in that period before the First Date. 13 Where a divisional application is involved, s 24 relevantly provides that, for the purpose of deciding whether an invention is novel or lacks an inventive step or lacks an innovative step, the decision-maker must disregard: · any information made publicly available, through any authorised or consensual publication or use of the invention within 12 months before the filing date of the complete application, · but only if a patent application for the invention is made within 12 months after the information was publicly available. To construe the reference in s 24 to the filing date of the complete application as a reference not to the Parent Application, but to the Divisional Application, would be to render entirely nugatory the protection that would otherwise be afforded by s 24, save for those few divisional applications that would otherwise fall within the scope of s 24 without the operation of r 2.3(4). That construction would facilitate the initial consideration of s 24 for divisional applications, by satisfying the condition, but would then render inapplicable the very protection contemplated by s 24, because the publication or use would not be within 12 months before the filing date of the Divisional Application. Such a construction would lead to anomalous and unreasonable results that are inconsistent with the purpose of the provision and which cannot be supported by the rationale advanced by Phoenix. 14 The phrase "the filing date of the complete application" must be construed in the context of all of the provisions of the 1990 Act and the Regulations, so as to give a harmonious result achieving the apparent goal of the provisions. To construe the phrase as referring to the Parent Application and not to the Divisional Application achieves that result. The construction is reasonably open and is consistent with the structure of the 1990 Act and the Regulations as a whole, particularly in relation to the treatment of divisional applications and avoids anomalous or unreasonable results. 15 Since writing the above, I have had the opportunity of reading the reasons of Jagot J. I agree with her Honour's more extensive reasoning for concluding that the appeal should be upheld. The orders of the Court made on 2 October 2008, 18 November 2008 and 19 November 2008 should be set aside. There should be a declaration that, for the purpose of determining the validity of the Innovation Patent, the filing date of the complete application, within the meaning of r 2.2(1A), is 13 May 2005, being the filing date of the complete specification for the Standard Patent Application. Further questions will now need to be determined, in particular, whether the claims of the Patent are fairly based on the material disclosed in the specification of the Standard Patent Application. 16 Phoenix should pay Mont's costs of the appeal, other than any additional costs incurred by reason of the intervention of IPTA. IPTA should pay any additional costs incurred by the parties by reason of their intervention, if any have been incurred. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

GENERAL DIVISION NSD 1685 of 2008

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BENNETT J: 17 The Patents Act 1990 (Cth) ('the Act') and the Patents Regulations 1991 (Cth) ('the Regulations') provide for a "grace period" during which prior publication by or prior use of an invention by the patentee do not have the result of depriving the invention claimed in the patent of novelty, inventive step or innovative step. This appeal concerns the effect of the grace period on a divisional application. 18 I have had the benefit of reading in draft the reasons of Emmett J and of Jagot J. Their Honours set out the background of the appeal and Jagot J sets out the relevant statutory regime in detail. I am grateful to their Honours and do not need to repeat that background or the details of the statutory regime. I agree generally with their Honours' reasons and with the conclusion that the appeal should be allowed. I wish to add some comments of my own.

BACKGROUND PATENT MATTERS 19 "Patent application" is defined in Schedule 1 of the Act to mean 'an application for a standard patent or an application for an innovation patent'. 20 Divisional applications may be made under s 79B or s 79C of the Act. Section 79B provides for the filing of divisional applications prior to the grant of a patent. Essentially, if a complete patent application for a patent ('the parent') is made, the patent applicant may make a further complete application for a patent ('the divisional') for an invention disclosed in the parent specification and falling within the scope of the claims of the accepted parent specification. 21 Section 79C makes provision for divisional applications for innovation patents after the grant of the parent innovation patent where the invention claimed in the divisional was disclosed in the parent innovation patent. 22 Each of a parent and a divisional patent is a complete specification. 23 Each claim of a specification must have a priority date (s 43(1) of the Act). Different claims of a specification may have different priority dates (s 43(4)). Generally speaking, the priority date of a claim is the date of filing of the specification (s 43(2)(a)). Section 43(2)(b) provides that the Regulations may provide for the determination of a different date as the priority date. Regulation 3.12(1) relevantly provides that the priority date of a claim of a specification is the earliest of the following dates: (a) the date of filing of the specification; (b) if the claim is fairly based on matter disclosed in one or more priority documents, the date of filing the priority document in which the matter was first disclosed; (c) if the specification is a complete specification filed in respect of a divisional application under s 79B of the Act and the claim is fairly based on matter disclosed in the specification referred to in s 79B(1)(a) of the Act - the date mentioned in reg 3.12(2C). 24 Regulation 3.12(2C) provides that the date for a specification to which reg 3.12(1)(c) applies is the date that would have been the priority date of the claim if it had been included in the parent specification. That is, the claims in the divisional which are fairly based on matter disclosed in the parent specification take the same priority date as the claims in the parent. 25 The term of a standard patent is 20 years from the date of the patent (s 67 of the Act). The date of a patent is the date of filing of the relevant complete specification, unless the Regulations provide otherwise (s 65). For a divisional, the date of the patent is the date of filing of the parent (reg 6.3(7)(c)), subject to two exceptions which are not presently relevant. That is, the term of a divisional commences by reference to the date of filing of the parent, even though the divisional is filed at a later time. The same regime applies to an innovation patent except that the term is eight years from the date of the patent.

THE GRACE PERIOD 26 Section 18 of the Act relevantly provides that an invention is a patentable invention, so far as claimed in any claim, if it is novel (s 18(1)(b)(i) and s 18(1A)(b)(i)) and involves an inventive step (s 18(1)(b)(ii)) or an innovative step (s 18(1A)(b)(ii)). Novelty and inventive/innovative step are assessed as at the priority date of the claims against the prior art base. 27 Division 2 of Part 3 of Chapter 2 of the Act deals with matters that do not affect validity. Section 24, in that Division, relevantly provides: (1) For the purpose of deciding whether an invention is novel or involves an inventive step or an innovative step, the person making the decision must disregard: (a) any information made publicly available, through any publication or use of the invention in the prescribed circumstances, by or with the consent of the nominated person or patentee, or the predecessor in title of the nominated person or patentee; … but only if a patent application for the invention is made within the prescribed period. (emphasis added)

28 The prescribed circumstances are set out in reg 2.2. Prior to 2002, the prescribed circumstances set out in reg 2.2 for the purposes of s 24(1)(a) of the Act were limited to specified occurrences, such as the publication of the invention in a paper written by the inventor and read before a learned society. In 2002, reg 2.2 was amended to insert reg 2.2(1A) which provides: For paragraph 24(1)(a) of the Act, the circumstance that there was a publication or use of the invention within 12 months before the filing date of the complete application, is a prescribed circumstance. (emphasis added) 29 Also introduced by amendment in 2002, reg 2.3(1A) specifies the prescribed period for an applicant relying on the prescribed circumstance in reg 2.2(1A): For information of the kind referred to in paragraph 24(1)(a) of the Act, if the applicant relies on the circumstance in subregulation 2.2(1A), the prescribed period is the period of 12 months after the information was first made publicly available.

30 Regulations 2.3(3) and (4) were introduced at the same time as reg 2.2(1A) and 2.3(1A). They provide: (3) Subregulation (4) applies: (a) if an application for a patent is a divisional application: (i) under section 79B of the Act for an invention disclosed in the specification filed with a previous application for a standard patent (the original application); or (ii) under section 79C of the Act for an invention disclosed in the specification filed in respect of an application for an innovation patent (the original application); and (b) only to information disclosed in the divisional application that was disclosed in the original application. (4) For determining the prescribed period for subsection 24 (1) of the Act, the filing date of the divisional application is taken to be the filing date of the original application. (original emphasis) 31 The question that arises in this appeal, the question before the primary judge, is whether the words in reg 2.2(1A) "the filing date of the complete application" refer to the filing date of the complete application of the parent or the filing date of the complete application of the divisional. It is an agreed fact that, in this case, there was a prior use within 12 months before the filing date of the parent but more than 12 months before the filing date of the divisional.

COMPETING RATIONALES 32 As explained by Emmett J and Jagot J, the Institute of Patent and Trade Mark Attorneys of Australia ('IPTA') was granted leave to intervene in the appeal. Two different rationales are advanced by the parties regarding the meaning of the term "the complete application" in reg 2.2(1A).

(1) The reference to "the complete application" in reg 2.2(1A) means the parent application and not the divisional application 33 This meaning is supported by the appellant ('Mont') and IPTA. 34 IPTA says that s 24 of the Act, when read in conjunction with the Regulations, relevantly provides that, in assessing whether an invention is novel or involves an inventive/innovative step, the person making the decision must disregard: · any information made publicly available, through any authorised or consensual publication or use of the invention within 12 months before the filing date of the complete application; · but only if a patent application for the invention is made within 12 months after the information was publicly available. 35 IPTA submits that, read in this way, the provisions contemplate a symmetry between the "complete application" and the "patent application". The symmetry is brought about, it submits, by the 12 month period. 36 In addition, IPTA notes that reg 2.3(4) provides that, for determining the prescribed period for s 24(1) of the Act, the filing date of the divisional is taken to be the filing date of the parent. IPTA says that, in this way, reg 2.3(4) seeks to enlarge the protection given to divisionals by enabling them to satisfy the condition necessary for the application of the protection afforded by s 24(1). It should be noted, however, that regs 2.3(3) and 2.3(4) distinguish between divisionals that contain information already disclosed in the parent and those that contain new information. 37 IPTA argues that if "the complete application" in reg 2.2(1A) is read to refer to the divisional, the protection offered by s 24 is rendered nugatory except for those few divisional applications that would otherwise fall within the scope of s 24 even without the operation of reg 2.3(4). That is, despite specific reference to divisionals in the Regulations, the protection would be meaningless where the divisional patent is filed more than a year after the first public disclosure of the invention. 38 Where the claims of the divisional are fairly based on matters disclosed in the parent, the priority date of a divisional and the term of the divisional mirror that of the parent. Mont submits that the relevant complete specification for determining the validity of the claims of a divisional within the grounds enumerated in s 24(1) is not the complete specification of the divisional, but that of the parent, from which priority for the divisional patent is drawn. It says that there is no rationale apparent from the legislative scheme to justify the penalising of an applicant for a divisional patent by depriving the applicant of the benefit of the grace period in circumstances where the divisional is filed more that 12 months after the first public disclosure of the invention. Mont argues that otherwise, where a parent disclosed and claimed two inventions, the patent applicant would not have the protection of the grace period for the second invention disclosed in the parent but necessarily made the subject of a subsequent divisional if the divisional was filed more than a year after the first public disclosure of the invention. It would follow, Mont says, that a divisional application under s 79B entitles a patentee to claim the earlier priority date of the parent, but is denied the accompanying protection offered by s 24(1) of the Act. 39 In providing for the grace period, there is no differentiation between a parent and divisionals in the Act and the Regulations, apart from the reference to divisionals in regs 2.3(3) and 2.3(4). The Explanatory Statement that accompanied the amendments to the Regulations that inserted regs 2.3(1A), (3) and (4), as well as the additional prescribed circumstance in reg 2.2(1A), stated the following: Item 8 of Schedule 1 inserts some new provisions into regulation 2.3. These new provisions ensure that divisional applications filed under sections 79B or 79C of the Act are encompassed by the circumstances prescribed for subsection 24(1) of the Act.

40 Accordingly, Mont and IPTA argue, a consideration of the Act and the Regulations, together with the explanation for the amendments to the Regulations, favour a meaning that the words "the filing date of the complete application" in reg 2.2(1A) refer to the filing date of the parent application.

(2) The reference to "the complete application" in reg 2.2(1A) means the divisional application 41 This is the meaning contended for by the respondent ('Phoenix'). 42 Phoenix submits that a rationale for its construction of reg 2.2(1A) is to ensure that claims in a specification filed in respect of a divisional application which are not fairly based on the specification filed in respect of the parent application do not benefit from a grace period fixed by reference to the filing date of the parent application. Phoenix submits that the "filing date of the complete application" in reg 2.2(1A) refers to the filing date of the complete application for the patent the validity of which is in issue. In this case, that is the divisional. 43 The context in which words appear and the underlying purpose or object of a regulation and any related provisions do not permit a construction of those words that is not 'reasonably open' (Newcastle City Council v GIO General Limited (1997) 191 CLR 85 at 113) or within'the range of possible meanings or of operation of the text' (R v Young (1999) 46 NSWLR 681 at [15]). Phoenix says that the construction advanced by Mont and IPTA is a "strained construction" and that, while such a construction may be permitted, that is only where: (1) the purpose of the relevant statutory provision is clear; (2) it is evident that, in the passage of the provision into law, a matter which had to be dealt with to achieve that purpose was, by inadvertence, overlooked; and (3) it is possible to state with certainty the words that would have been used to overcome the omission if it had been recognised. 44 Phoenix argues that, at least in cases other than those involving a divisional application, the only sensible meaning which the words "the filing date of the complete application" in reg 2.2(1A) can bear is the filing date of the complete application for the patent the validity of which is in issue. Once this is accepted, it is not reasonably open to give the same words in the same provision a different meaning in the case of a divisional application. 45 Phoenix submits that, prior to the introduction of regs 2.3(3) and 2.3(4), the expression "a patent application" in the closing words of s 24(1) meant a patent application for the patent the validity of which was in issue. If this is accepted, Phoenix says, the expression "the complete application" in reg 2.2(1A) should also refer to the application for the patent the validity of which is in issue. 46 Phoenix points out that reg 2.2(1A) makes no express provision for divisionals, even though it was introduced in the same series of amendments to the Regulations as regs 2.3(3) and 2.3(4), which do make such express provision. 47 Phoenix submits that, on its construction, divisional applications are not penalised but are dealt with the same way as the parent and are assessed for validity by reference to their own filing date for the purposes of the grace period.

CONSIDERATION 48 I do not accept that the construction advanced by Mont and IPTA is an impermissible strained construction. 49 The scheme of the Act provides that, where the invention of the divisional was disclosed in the parent, the publication or use of the invention within 12 months before the filing date of the parent must be disregarded for the purposes of assessing the novelty and inventive/innovative step of each of the parent and the divisional, provided that a patent application for the invention is filed within the prescribed period. This applies where the divisional is of a parent standard patent or a parent innovation patent. Where the invention of the divisional was disclosed in the parent, the words "the complete application" in reg 2.2(1A) refer to the parent application and not to the divisional application. 50 The drafting of the Regulations is not a model of clarity. However, I see no reason why a divisional fairly based on a parent and entitled to the priority date and term of the parent should be deprived of the benefit of the grace period if there was a publication or use of the invention within 12 months before the filing date of the parent but not within 12 months before the filing date of the divisional. 51 Section 24 applies only where a patent application for the invention is made within the prescribed period. Regulations 2.3(3) and 2.3(4) are concerned to protect the divisional so far as it contains the same information as the parent. The Regulations leave open the effect of new information in the divisional. That information may, for example, affect the description of the invention or add information to some or all of the claims, such as an additional integer. It will be a question of fact whether such additional information results in a new invention so that the purported divisional does not comply with s 79B or s 79C of the Act. If, for example, the additional information is for a new or different invention, so far as claimed in some of the claims, the grace period for s 24 in respect of that information will date back from the filing date of the divisional and not the parent. 52 While this may mean that, where the additional information is for the same invention, the grace period dates back from the filing date of the parent, the construction advanced by Phoenix does not fulfil the purpose of affording a divisional for the same invention as a parent but filed more than 12 months after the information was first made publicly available the benefit of the grace period, even where the divisional contains no new information. In my view, the overriding purpose of the Act and Regulations, including the amendments to the Regulations in 2002, is to maintain the system whereby a divisional application "travels with" its parent. 53 The Act and amending regulations, together with the Explanatory Statement, indicate that the intention was to give divisional applications the same protection in the same circumstances as the parent application. The rationale advanced by Phoenix is that Parliament was anxious to ensure that divisionals not fairly based on a parent do not benefit from a grace period fixed by reference to the filing date of the parent and that this outweighed the detriment to those divisionals that were fairly based on the parent. This rationale is not supported by the Explanatory Statement.

CONCLUSION 54 The construction advanced by Phoenix would deny to the invention claimed in a divisional application filed more than 12 months after the publication or use of the invention by the patentee and fairly based on the parent the benefit of the grace period available to the parent. There is no good reason to adopt that construction. On the other hand, the construction advanced by Mont and IPTA is reasonably open and accords with the Act and Regulations. 55 Accordingly, on the basis that the parent and the divisional are for the same invention, I answer the question raised in this appeal as follows: the words in reg 2.2(1A) "the filing date of the complete application" refer to the filing date of the complete application of the parent, that is, 13 May 2005. 56 I agree with the declaration and orders proposed by Emmett J. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett.

gENERAL dIVISION NSD 1685 of 2008

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

JAGOT J: 57 The question in this appeal is whether the agreed facts satisfy the description of the "prescribed circumstance" in cl 2.2(1A) of the Patents Regulations 1991 (Cth). The answer to this question determines whether the appellant, Mont Adventure Equipment Pty Ltd (Mont), has the benefit of protection from Mont's own disclosure of its invention for the purpose of deciding the issues of novelty and lack of innovative step with respect to a patent application. 58 There are three agreed facts which give rise to this question. First, Mont manufactured and offered travel packs for sale to the public in Australia in or about October 2004. Second, on 13 May 2005, Mont filed a complete application including a complete specification for a standard patent with respect to its travel packs, being Australian Patent Application No 200524456 (application 456). Third, on 22 November 2006, Mont filed a complete application including a complete specification for an innovation patent with respect to its travel packs, being Australian Innovation Patent Application No 2006100978 (application 978) as a divisional application under s 79B of the Patents Act 1990 (Cth), relying on application 456 as the "first-mentioned application" for the purposes of that section. 59 These facts, and the function of cl 2.2(1A) of the Regulations in the statutory scheme, cannot be understood without reference to the provisions of the Act and Regulations relating to patentable inventions and divisional applications. 60 Chapter 2 Pt 3 of the Act concerns the validity of patents. Section 18 in Div 1 of Pt 3 specifies inventions which are patentable. Relevantly, under s 18 (read with s 7), questions of novelty, inventive step (for a standard patent) and innovative step (for an innovation patent) are to be determined by an assessment comparing the claim "with the prior art base as it existed before the priority date of that claim". This is consistent with s 23(a) of the Act which provides that the validity of a patent cannot be impugned merely because of a publication or use of an invention after the priority date of a claim for that invention. Section 43 regulates the priority date of the claims of a specification. The priority date will be the date of the filing of the specification unless the Regulations provide otherwise (s 43(2)). The Regulations so provide for applications conventionally known as "divisional applications". 61 Section 29 of the Act regulates patent applications. Under that section, applications may be either a provisional application or a complete application (s 29(2)). A patent request in relation to a provisional application must be in the approved form and accompanied by a provisional specification (s 29(3)). A patent request in relation to a complete application must be in the approved form and accompanied by a complete specification (s 29(4)). Under s 40 a provisional specification must describe the invention (s 40(1)) whereas a complete specification must describe the invention fully, including the best method known to the applicant of performing the invention and end with claims (which relate to one invention only and are clear and succinct and fairly based on the matter described in the specification) defining the invention (ss 40(2)-(4)). 62 Section 79B of the Act enables divisional applications to be made. Section 79B provides as follows: (1) If a complete patent application for a patent is made (but has not lapsed or been refused or withdrawn), the applicant may, in accordance with the regulations, make a further complete application for a patent for an invention: (a) disclosed in the specification filed in respect of the first-mentioned application; and (b) where the first-mentioned application is for a standard patent and at least 3 months have elapsed since the publication of a notice of acceptance of the relevant patent request and specification in the Official Journal - falling within the scope of the claims of the accepted specification. (1A) The reference to a complete patent application first-mentioned in subsection (1) does not include a reference to a divisional application for an innovation patent provided for in section 79C. (2) In this section: applicant has the same meaning as in section 38. 63 If an application is a divisional application within the meaning of s 79B then cll 3.12(1)(c) and (2C) of the Regulations are engaged. They provide that: (1) Subject to regulations 3.13 and 3.14 and subregulation (2), the priority date of a claim of a specification is the earliest of the following dates: … … (c) if the specification is a complete specification filed in respect of a divisional application under section 79B of the Act and the claim is fairly based on matter disclosed in the specification referred to in paragraph 79B(1)(a) of the Act - the date mentioned in subregulation (2C); … (2C) The date for a specification to which paragraph 3.12(1)(c) applies is the date that would have been the priority date of the claim if it had been included in the specification referred to in paragraph 79B(1)(a) of the Act. 64 In other words, the claims in the later (divisional) patent application are deemed to take the same priority date as the claims in the earlier (conventionally referred to as parent or original) patent application. Thus, for a divisional application, questions of novelty and inventive step or innovative step are assessed by reference to the prior art base before the priority date of the claims of the earlier (or parent or original) application (s 18). 65 Other provisions also affect divisional applications. Under s 65, the date of a patent is the date on which the relevant complete specification was filed unless the Regulations otherwise provide. Clause 6.3(7) of the Regulations otherwise provides for patents granted on a divisional application. Subject to exceptions not presently relevant, the date of such a patent is the earliest of three options each of which relates to the date of the patent of the "first-mentioned" (or parent or original) application within the meaning of s 79B of the Act. Under s 67, the term of a standard patent is 20 years. The term of an innovation patent is 8 years (s 68). Accordingly, for patents granted on a divisional application, this period starts by reference to the date of the "first-mentioned" (or parent or original) application. 66 Section 24 of the Act regulates aspects of the assessment of novelty and inventive step or innovative step. Section 24 is in these terms: (1) For the purpose of deciding whether an invention is novel or involves an inventive step or an innovative step, the person making the decision must disregard: (a) any information made publicly available, through any publication or use of the invention in the prescribed circumstances, by or with the consent of the nominated person or patentee, or the predecessor in title of the nominated person or patentee; … but only if a patent application for the invention is made within the prescribed period. 67 Clause 2.2(1A) of the Regulations specifies a prescribed circumstance as follows: For paragraph 24(1)(a) of the Act, the circumstance that there was a publication or use of the invention within 12 months before the filing date of the complete application, is a prescribed circumstance. 68 Clause 2.3(1A) of the Regulations specifies the prescribed period in these terms: (1A) For information of the kind referred to in paragraph 24(1)(a) of the Act, if the applicant relies on the circumstance in subregulation 2.2(1A), the prescribed period is the period of 12 months after the information was first made publicly available. 69 Clause 2.3 of the Regulations, dealing with the prescribed period in s 24(1)(a) of the Act, also contemplates divisional applications in these terms: (3) Subregulation (4) applies: (a) if an application for a patent is a divisional application: (i) under section 79B of the Act for an invention disclosed in the specification filed with a previous application for a standard patent (the original application ); or (ii) under section 79C of the Act for an invention disclosed in the specification filed in respect of an application for an innovation patent (the original application ); and (b) only to information disclosed in the divisional application that was disclosed in the original application. (4) For determining the prescribed period for subsection 24(1) of the Act, the filing date of the divisional application is taken to be the filing date of the original application. 70 Before the primary judge the construction of cl 2.2(1A) of the Regulations arose in a separate question as set out in [7] of the reasons for judgment, namely: Question For the purpose of determining the validity of the Innovation Patent, and on the facts stated above, is "the filing date of the complete application" within the meaning of reg 2.2(1A) of the Patent Regulations 1991 (Cth): (a) the filing date of the complete application for the Standard Patent Application on 13 May 2005; or (b) the filing date of the complete application for the Innovation Patent on 22 November 2006? 71 The primary judge recognised the ambiguity of cl 2.2(1A) (at [11]), but preferred the construction proffered by the respondent, Phoenix Leisure Group Pty Ltd (Phoenix), and thus held that the words "complete application" in cl 2.2(1A) of the Regulations referred to application 978 filed on 22 November 2006 as a divisional application under s 79B of the Act. Accordingly, the agreed facts did not satisfy the requirements of the prescribed circumstance in s 24(1) of the Act. It followed that Mont's publication and use of the invention from October 2004 (more than 12 months before that date) was not required to be disregarded for the purpose of deciding the issues of novelty and innovative step. The primary judge thus made a declaration and consequential orders dismissing Mont's application and revoking Mont's Australian Innovation Patent No 2006100978 (Mont Adventure Equipment Pty Limited v Phoenix Leisure Group Pty Limited [2008] FCA 1476). Contrary to the position of Phoenix, Mont does not require leave to appeal because the primary judge's orders dismissing the application and revoking the patent are final orders. 72 Mont has appealed on the basis that the primary judge should have held that the words "complete application" in cl 2.2(1A) of the Regulations referred to application 456 filed on 13 May 2005. From that finding it would have followed that, on the agreed facts, s 24(1)(a) of the Act required Mont's publication and use of the invention from October 2004 (within 12 months of that date) to be disregarded for the purpose of deciding the questions of novelty and innovative step. 73 This Court granted the Institute of Patent and Trade Mark Attorneys of Australia (IPTA) leave to intervene in the appeal by the making of written and oral submissions (supporting Mont's position) on the basis that IPTA would not seek an order for costs if Mont were successful and would submit to an order to pay any additional costs incurred by Phoenix if Mont were unsuccessful. 74 The parties commonly acknowledged the fundamental requirements of the task of statutory construction, particularly the following: (1) Clause 2.2(1A) forms part of a broader statutory scheme. The clause should be construed in context "so that it is consistent with the language and purpose of all the provisions of the statute" and "on the prima facie basis that… [the statutory] provisions are intended to give effect to harmonious goals" (Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 at [69] and [70]). (2) While this may permit a "strained construction" of the words used in order to ensure effect is given to the intention of the legislature, "(w)here the words actually used are not reasonably capable of being construed in the manner contended for, they will not be so construed" (R v Young (1999) 46 NSWLR 681; [1999] NSWCCA 166 at [15]; see also Newcastle City Council v GIO General Ltd (1997) 191 CLR 85 at 113 and Secretary, Department of Health & Ageing v Nguyen (2002) 124 FCR 425; [2002] FCAFC 416 at [22]). (3) Extrinsic material (in this case, an explanatory statement) may be considered in the task of construction (s 15AB of the Acts Interpretation Act 1901 (Cth)). Nevertheless, the "words of the statute, not non-statutory words seeking to explain them, have paramount significance" (Nominal Defendant v GLG Australia Pty Ltd (2006) 228 CLR 529; [2006] HCA 11 at [22]). 75 With these principles in mind I have concluded that Mont's approach to the construction of cl 2.2(1A) is to be preferred. My reasons are as follows. 76 By the provisions relating to divisional applications, the Act and Regulations establish a scheme in which an applicant may ensure that a claim for an invention that the applicant has previously disclosed in a complete specification as filed and which is within the scope of the claims of the complete specification as accepted takes a priority date as if the claim had been included in that earlier complete specification. The scheme thus ensures that the requirements of novelty and inventive step or innovative step for the claims within the divisional application (which are essential determinants of the validity of the patent application) are assessed by reference to a priority date established by the date of the earlier (or parent or original), rather than the later (or divisional) specification. 77 All features of this statutory scheme for divisional applications are consistent. Hence, the claims in any patent granted on a divisional application take the priority date of the claims in the earlier (or parent or original) application. Publications or uses of the claimed invention, after that priority date, cannot affect the validity of any patent granted. The term of any patent granted on a divisional application is also taken to have started on the same date as the date of the earlier (or parent or original) application. 78 Section 24 of the Act and the associated provisions of the Regulations are to be construed in light of this scheme for divisional applications provided for by the Act. Section 24 operates for the nominated purpose of deciding whether an invention is novel or involves an inventive step or an innovative step. This purpose directs attention to the terms of ss 7 and 18 of the Act which specify the requirement for comparison of the claimed invention with the prior art base as it existed before the priority date of the claims. The function of s 24 is to require certain information to be disregarded when making that decision. In the case of s 24(1)(a), the information is information the patentee made (or consented to making) publicly available through any publication or use of the invention "in the prescribed circumstances" but only if a patent application for the invention is made "within the prescribed period". 79 Accordingly, by the terms of s 24(1)(a), the "prescribed circumstances" and the "prescribed period" are both pre-conditions for the application of the section. Read as if the "prescribed circumstances" and the "prescribed period" specified in cll 2.2(1A) and 2.3(1A) were part of s 24(1)(a), the section provides (in effect and leaving aside the requirement for consent) that: For the purpose of deciding whether an invention is novel or involves an inventive step or an innovative step, the person making the decision must disregard any information made publicly available through any publication or use of the invention within 12 months before the filing date of the complete application but only if a patent application for the invention is made within the period of 12 months after the information was first made publicly available. 80 When cll 2.3(3) and (4) of the Regulations are taken into account the person deciding whether an invention is novel or involves an inventive step or an innovative step must also recognise that, insofar as information disclosed in the divisional application was disclosed in the earlier (or parent or original application), the filing date of the divisional application is taken to be the filing date of the earlier (or parent or original) application. 81 If the position of Phoenix is correct then the statutory scheme: (1) on the one hand ensures that: (a) a claim in a divisional application takes the same priority date as it would have done if included in the specification of its parent application (because, by the terms of s 79B, to be a divisional application the claim must be disclosed in the filed specification and be within the scope of the claims of the accepted specification); (b) by reason of (a), the validity of the claims in a divisional application in terms of novelty and inventive step or innovative step are to be assessed by reference to the prior art base before the priority date of the claims in the related parent application; and (c) for the purposes of determining the prescribed period of 12 months after the information was first made publicly available, the filing date of the divisional application is taken to be the same as the filing date of the related parent application; yet (2) on the other hand, for the purpose of determining the prescribed circumstance of a publication or use of the invention within 12 months before the filing date of the complete application, leaves that date as the filing date of the divisional as opposed to the filing date of the earlier (or parent or original) application. 82 This construction of cl 2.2(1A) results in a situation prima facie inconsistent with the treatment of divisional applications in all other parts of the statutory scheme (which, in effect, unite the divisional application with its parent). The result of this construction suggests that close consideration of the context of cl 2.2(1A) is required. This is particularly so once it is recognised that cll 2.2(1A), 2.3(1A) and 2.3(3) and (4) were inserted into the Regulations as part of a package of amendments in the Patents Amendment Regulations 2002 (No 1) (Cth) (the 2002 amending Regulations). 83 Indicators that a contrary construction is to be preferred are apparent from both the context and words of cl 2.2(1a). 84 As to context, cll 2.2(1A) and 2.3(1A) are related. The latter (the prescribed period) is relevant only if an applicant relies on the former (the prescribed circumstance). There are other prescribed circumstances and related prescribed periods but only cll 2.2(1A) and 2.3(1A) (along with cll 2.3(3) and 2.3(4)) are new provisions introduced in the 2002 amending Regulations. 85 Clauses 2.2(1A) and 2.3(1A) both refer to a period of 12 months. For cl 2.2(1A), the relevant 12 months is the 12 months before the filing date of the complete application (within which there might have been information made publicly available by a publication or use of an invention by the applicant or with its consent). For cl 2.3(1A), the relevant 12 months is the 12 months after this information was first made publicly available (within which a patent application for the invention must be made to obtain the benefit of s 24). These two periods of 12 months are congruent. Whether an applicant makes a complete application on the first or the last day of the prescribed period, the applicant's period of protection will extend back to cover all publications or uses within the meaning of s 24(1)(a) within the preceding 12 months calculated from that day. 86 Divisional applications are brought within this scheme by cll 2.3(3) and (4) of the Regulations. Where a divisional application discloses information that was also disclosed in the earlier (or parent or original) application the filing date of the divisional application is taken to be the filing date of the earlier application. Clause 2.3(4) opens with the words "(f)or determining the prescribed period…", but it must be remembered that the prescribed period in cl 2.3(1A) is relevant only to the prescribed circumstance in cl 2.2(1A). 87 As to the words, the starting point is that cl 2.2(1A) is capable of more than one meaning (as the primary judge acknowledged at [11] and the parties accepted on appeal). The provision is capable of more than one meaning, primarily, because the reference to "the complete application" is elliptical. The primary judge acknowledged this by observing that the provision begged the question "a complete application for what?" (at [11]). So framed the answer is either application 456 or application 987. Another question, equally, may complete the statutory reference, namely, "a complete application of what character, nature or type?". This question focuses on the subject-matter of the application, namely, the invention itself. This focus is consistent with the subject-matter of s 24(1) which concerns itself with the issues of novelty and inventive step or innovative step in respect of the invention. When so framed the answer for which Mont contends (in effect, the complete application within the meaning of cl 2.2(1A) is the application which first disclosed the invention) is persuasive. In the case of a non-divisional application, that date will be the filing date of the application (determined under s 30 and the associated cl 3.5 of the Regulations). In the case of a divisional application, that will be the filing date of the earlier (or parent or original) application (also determined under s 30 and the associated cl 3.5 of the Regulations). 88 This construction is reasonably open on the text of cl 2.2(1A) and enables the clause to operate in a manner consistent with the other provisions of the Act and Regulations which treat the date of the claims in the divisional application as that of the earlier (or parent or original) application for all decisions concerning novelty and inventive step or innovative step. 89 I do not accept Phoenix's submissions to the contrary. 90 Phoenix submitted that the policy rationale underlying its construction was to ensure that claims in a divisional application not fairly based on the earlier (or parent or original) application did not obtain the benefit of the operation of s 24. This submission cannot be sustained because: (1) Divisional applications, by the terms of s 79B, are applications for inventions disclosed in the specification for the earlier (or parent or original) application as filed and within the scope of the claims of that specification as accepted. (2) In ICI Chemicals & Polymers Ltd v The Lubrizol Corporation Inc (2000) 106 FCR 214; [2000] FCA 1349 at [118] the Full Court of the Federal Court observed that "it would be a rare case indeed where a claim which claims matter in substance disclosed in the specification as filed is not, equally, fairly based on the matter described in the specification (and vice versa)". (3) Clause 2.3(3)(b) of the Regulations ensures that divisional applications only take the filing date of their earlier (or parent or original) application insofar as information disclosed in that application was disclosed in the earlier application. In other words, the draftsperson was aware of the possibility which Phoenix has identified and has guarded against it by the terms of cl 2.3(3)(b) of the Regulations. This is consistent with the draftsperson having treated cll 2.2(1A) and 2.3(1A) as linked to the extent that any deemed filing date for the latter (by operation of cl 2.3(4)) would be understood as the deemed filing date for the former because the latter is relevant only if the applicant "relies on the circumstance" in the former. 91 Accordingly, there is no apparent policy rationale supporting Phoenix's construction of cl 2.2(1A). That construction, as noted, is prima facie inconsistent with the treatment of divisional applications in all other provisions of the Act and Regulations, including the Regulations introduced as part of the same package of amendments to the Regulations as cl 2.2(1A) itself. 92 The four contextual matters on which Phoenix relied to support its submissions are not persuasive. 93 First, although a decision on novelty and inventive step or innovative step is only required when validity is in issue, that fact does not support a reading of cl 2.2(1A) that refers to the application for the patent the validity of which is in issue. This is because cl 2.2(1A) (and the scheme established by s 24 and the associated provisions of the Regulations) is about information and dates insofar as they potentially affect validity by reason of novelty and inventive step or innovative step. Indeed, s 24 only operates for the purpose of deciding the issues of novelty and inventive step or innovative step. The legislative scheme ensures that for those purposes, the relevant date and relevant information for a divisional application is the date of and information contained in the earlier (or parent or original) application because, by definition, that is the application which first disclosed the invention. 94 Second, the fact that a decision on validity is made by reference to the invention as claimed in the specification for the divisional application does not undermine the fact that such an application stands or falls on the question whether the invention as claimed is disclosed in the filed specification and is within the scope of the claims of the accepted specification for the earlier (or parent or original) application. 95 Third, the fact that the complete specification will have accompanied the filing of the divisional application also does not undermine the answer to Phoenix's first proposition. 96 Fourth, the fact that there accordingly must exist a complete application, the validity of which is in issue at the time the decision to which s 24 and cl 2.2(1A) apply is made, is neutral; in making any decision about novelty and inventive or innovative step, the Act and Regulations align the date of the claims in the divisional application with those in the earlier (or parent or original) application. 97 Further, and contrary to Phoenix's submissions, Mont's construction does not result in one set of words in a single provision bearing more than one meaning depending on the nature of the application as divisional or not. This submission depends on accepting Phoenix's submission that for non-divisional applications the words "the complete application" mean "the complete application for the patent the validity of which is in issue", whereas for divisional applications the words mean something else. To the contrary, if the words mean "the complete application first disclosing the invention" then both divisional and non-divisional applications are covered. This is preferable to a construction which works for non-divisional applications but leaves divisional applications in a position inconsistent with all other provisions of the Act and Regulations relating to such applications. 98 The construction I prefer does not give the words in issue an ambulatory operation. It gives the words a meaning which they are reasonably capable of bearing in a manner which achieves the primary object of statutory construction, that is, consistency with the language and purpose of all the provisions of the statute on the basis that they are intended to give effect to harmonious goals. 99 The words "a patent application" in the closing part of s 24 do not cause any incongruity. The subject of s 24 is in the opening words, namely, the decision about whether an invention satisfies the requirements of novelty and inventive step or innovative step. The closing words impose a condition on the availability of the benefit which the section provides, being the making of a patent application for the invention in the prescribed period. That patent application, in the case of a divisional application, will be the divisional application or, using Phoenix's language, the patent the validity of which is in issue. But that does not mean the words "the filing date of the complete application" in cl 2.2(1A) of the Regulations mean the filing date of the divisional application, particularly in light of the statutory scheme as a whole. A different meaning which operates for both non-divisional and divisional applications is called for and is reasonably open on the language of cl 2.2(1A). It should not be rejected merely because another related provision, using a different phrase, takes a particular meaning. 100 Contrary to Phoenix's submissions, the presence of cll 2.3(3) and (4) in the same set of amendments as cll 2.2(1A) and 2.3(1A) indicates that the legislature intended that for a divisional application the filing date of the complete application would be taken to be the filing date of the earlier (or parent or original) application. It may be accepted that cl 2.3(4) opens with the words "(f)or determining the prescribed period…". But the fact that the prescribed period in cl 2.3(1A) is only relevant if an applicant relies on the prescribed circumstance in cl 2.2(1A) is significant. The provisions are related. The deeming provision in cl 2.3(4) exposes the incongruity of treating the "filing date of the complete application" in cl 2.2(1A) as anything other than the filing date of the complete application which first disclosed the invention. 101 This construction of the words in cl 2.2(1A) is not particularly strained. Phoenix's construction, in common with that of Mont, recognises that the words "the filing date of the complete application" are an ellipsis or contraction calling for resolution by the process of statutory construction. The context in which the words appear indicates that the complete application in question in cl 2.2(1A) is the complete application which first disclosed the invention. That is no more strained in terms of text than the construction for which Phoenix contended but has the advantage of being consistent with all other provisions of the Act and Regulations dealing with divisional applications. Nor is this preferred construction dependent on a conclusion of an inadvertent omission by the draftsperson. Phoenix's construction involves treating the missing part of the reference as for the patent the validity of which is in issue. Mont's involves treating the missing part as of a particular character, nature or type. 102 The explanatory statement for the 2002 amending Regulations also supports the construction which I prefer. Item 8 of the statement is as follows: Item 8 of Schedule 1 inserts some new provisions into regulation 2.3. These new provisions ensure that divisional applications filed under sections 79B or 79C of the Act are encompassed by circumstances prescribed for subsection 24(1) of the Act. 103 This statement at least confirms that the draftsperson had divisional applications in mind for the purpose of the amendments (as cll 2.3(3) and (4) disclose) and thus must be inferred also to have been aware of the scheme of the Act and Regulations with respect to divisional applications. It is unlikely that, against this background, the amending provisions were intended to treat divisional applications inconsistently with the balance of that scheme, particularly given the express recognition of the scheme in the amending provisions of cll 2.3(3) and (4). 104 For these reasons I have reached the conclusion that the separate question should have been answered as follows: Question For the purpose of determining the validity of the Innovation Patent, and on the facts stated above, is "the filing date of the complete application" within the meaning of reg 2.2(1A) of the Patent Regulations 1991 (Cth): (a) the filing date of the complete application for the Standard Patent Application on 13 May 2005; or (b) the filing date of the complete application for the Innovation Patent on 22 November 2006? Answer The filing date of the complete application for the Standard Patent Application on 13 May 2005. 105 It follows that the appeal should be allowed. I agree with the declaration and orders proposed by Emmett J. I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.

Associate: Dated: 7 July 2009 Counsel for the Appellant: S Burley SC and J O'Sullivan

Counsel for the Respondent: M J Darke

Counsel for the Institute of Patent and Trade Mark Attorneys of Australia D K Catterns QC and H P T Bevan

Solicitor for the Appellant: Bennett & Philp Solicitors

Solicitor for the Respondent: Hickson Lawyers

Solicitor for the Institute of Patent and Trade Mark Attorneys of Australia Spruson & Ferguson Lawyers

Patent Regulations 1991(Cth)

Patents Regulations 1991(Cth)rr 2.2, 2.3, 3.12, 6.3

At a glance

Court

Decision date

Before

Source

Judgment (23 paragraphs)

Parties

Legislation Cited (4)

Cases Cited (12)