PAC Mining Pty Ltd v Esco Corporation

obviousness 71 In their submissions on appeal, the appellants attacked his Honour's conclusion that considerable weight should be attached to the evidence of the inventor (see par 24 above). They submitted that the reference to Terrell was mistaken, and that the proposition was, in any event, wrong. They submitted also that his Honour was in error to have attributed the evidence about the unlikelihood of a bolt and nut assembly being used to Mr McClanahan. Finally in this respect, they submitted that his Honour failed to refer to other evidence by Mr McClanahan which was much more on point, and was wholly consistent with the evidence given by Prof Wightley in support of the appellants' case. 72 It appears that the reference by the primary Judge to the third edition of Terrell on The Law of Patents was in error. The edition published in 1994 was the fourteenth edition, but in other respects his Honour's citation was accurate. The relevant text read as follows: In coming to a conclusion as to whether or not a claim contains a real inventive step over what was previously known or used, the court in the past has attached considerable weight to the evidence of the inventor himself. Counsel for the appellants criticised his Honour's recourse to Terrell at two levels. First, they pointed out that the proposition had been omitted from the next edition of Terrell, the fifteenth published in 2000. Secondly, they submitted that the primary Judge overlooked what the High Court had to say with respect to the proposition as it appeared in the fourteenth (and earlier) editions of Terrell. A similar proposition in the eleventh edition was relied upon by Edmund Davies LJ in Woven Plastic Products Ltd v British Ropes Ltd [1970] FSR 47, 58. In the course of a systematic review of the authorities in Wellcome Foundation v VR Laboratories (Aust) Pty Ltd (1981) 148 CLR 262, Aickin J (with the assent of other members of the court) referred to Woven Plastic and continued (at 280): The mode of expression makes it clear that this observation was obiter. The paragraph in Terrell on The Law of Patents,11th ed. (1965) to which his Lordship referred (par. 322) refers only to Lightning Fastener Co. Ltd. v. Colonial Fastener Co. Ltd. (1934) 51 R.P.C. 349 and Howaldt Ltd. v Condrup Ltd. (1936) 54 R.P.C. 121. Cases to the contrary effect are not referred to. Neither of the other members of the Court of Appeal adverted to the point. Contrast the view in Blanco-White, Patents for Inventions, 3rd ed. (1962), p. 144, where he refers to cases which say that such evidence is "not of great weight", a comment repeated in the 4th ed. (1974) par. 4-228. According to the appellants, it is as clear as may be that Aickin J rejected the proposition stated in the eleventh edition of Terrell, and preferred the view expressed in Blanco White, namely, that the evidence of the inventor should not be regarded as having "great weight". 73 Wellcome was a case which concerned the obligation of the patentee to give discovery of documents which included those "relating to research and development and experimental work on the claimed invention both before and after the priority date of the subject letters patent" (148 CLR at 269). Both the Supreme Court of New South Wales and, on appeal therefrom, the Full Court of the Federal Court, had ruled that such discovery should be given. An appeal to the High Court was unsuccessful. After a review of the authorities, which he found to be conflicting to an extent, Aickin J said (at 287): If evidence of the failure of other attempts to solve a well-known problem, i.e. to satisfy a "long-felt want", is admissible in support of the inventive nature of a successful solution to such a problem, as it undoubtedly is, it is difficult to see why the patentee's own lack of success in earlier attempts would not also be admissible for the same purpose. It may well be that the use of such evidence by the patentee would involve some risk because it would no doubt be used to support an argument that the last and successful step was by then obvious, though such an argument would require careful examination to see whether or not it was an illegitimate use of hindsight. … In the result, therefore, I have concluded that evidence of research and experiments (if any) of a patentee leading up to his claimed invention is generally admissible, though not always likely to be helpful. The fact that in a particular case there may not have been any research or experiment involved in the making of an invention does not require the conclusion that evidence relating to research and experiments, where they took place, will not be admissible. The question in the present case relates not to admissibility (nor even to discoverability) but to utility. It is clear from Wellcome, however, that there is no general proposition of law that, when questions of obviousness are in issue, considerable weight should be given to the evidence of the inventor. 74 The appellants next pointed out that Mr McClanahan had not given evidence that "the skilled person would be unlikely to use a bolt and nut assembly because of expected problems such as rusting and deformation of the thread." The respondents accepted that Mr McClanahan gave no such evidence, and that his Honour had erred in relevant respects. They submitted, however, that the error was inconsequential, since evidence to the same effect had been given by another witness, Mr Anthony Ashworth. Mr Ashworth was called by the appellants. His cross-examination by counsel for the respondents contained the following passages: Is there any inherent disadvantage of [threaded] assemblies such as the Paige and Hendricks assemblies?---Threads. Threads always cause a problem in terms of degradation in operation and, yes, that's - that is a concern. What's the nature of the degradation that they suffer?---It can be anything from rusting through to [fines] packing within them. When you get wear or [deformation] of the thread during operation it makes it difficult for the thread to act as a thread in terms of removing the nut and like type [deformation]. To the extent that the primary Judge did, in par 80 of his reasons, attach "considerable weight" to this evidence because of his mistaken belief that it had been given by an inventor (which Mr Ashworth was not), his Honour's error should not be regarded as inconsequential. 75 The final basis upon which the appellants attacked par 80 of the primary Judge's reasons requires us to deal with the respects in which they asserted that the inventions, so far as claimed in claims 1 and 51 of Jones II and in claim 1 of Jones III, were obvious to a person skilled in the relevant art in the light of the common general knowledge as it existed in the patent area before the priority date. The appellants' case at trial was that a mechanical engineer equipped with an understanding of Jones I and of its commercial embodiment (Toplok) would regard the tendency towards looseness of the wear member as an obvious shortcoming, and would likewise regard it as obvious that such looseness might be removed by the utilisation of a threaded adjustment means. On this subject, Prof Wightley said: In my opinion, the inability to tighten the wear assembly described in Jones I is a design flaw. Wear assemblies made from cast parts that are to be used in high impact and high load applications (eg. on an excavator bucket) must have a rigid assembly if frettage corrosion and fatigue is to be avoided. Looseness in the assembly will not only reduce the life of the replaceable wear member, but also the boss welded to the excavator bucket. This is a particularly significant problem because the bucket would then need to be taken to a maintenance workshop to grind off the weld before the boss can be replaced. This defeats the purpose of having field replaceable wear parts. To a mechanical engineer trying to overcome the problem of the Jones I design, it would be readily apparent that some mechanism to tighten the assembly was required. One measure that would immediately come to mind is the use of a screw adjustment which could be used to take up any looseness around the key. This is a basic practical measure that is routinely used by mechanical engineers to eliminate looseness in applications that require rigid assemblies. I believe a screw adjustment which could be used to take up the looseness is a solution that would be readily apparent to any reasonably competent mechanical engineer and certainly one that he or she would be led to try. On appeal, it was submitted on behalf of the appellants that Mr McClanahan's affidavits did not address this evidence given by Prof Wightley, and that the respondents did not call any other expert witness on the subject of obviousness. 76 The appellants draw attention to certain evidence given under cross-examination by Mr McClanahan, which, they contend, was effectively the same as that of Prof Wightley in relevant respects, and to which the primary Judge did not refer in his reasons. In his affidavit sworn on 14 September 2007, Mr McClanahan said that he was one of the inventors for the patents in suit. He explained the means by which, commencing with Jones I and its perceived shortcomings, the inventors eventually came up with an adjustment assembly of the kind referred to in the claims in suit. The project given to the inventors was "to create a mechanically attached adapter system" for excavator bucket lips. They spent some time considering different ideas on how to develop the Toplock shroud into an adapter system. Their aim was to have an adapter that would stay on as long as possible, and would not wear loose. They identified a number of key issues, not all of which related to aspects that were ultimately carried forward into the three claims in suit. One of the issues, however, did so relate. It was "the appropriate choice for the locking mechanism for the Toplok adapter". There was a concern that the "fit relationship" would become too loose with wear, when used on adapters as distinct from shrouds. The inventors considered, and rejected, a number of approaches such as tighter manufacturing tolerances and self-adjustment mechanisms. In his affidavit, Mr McClanahan continued: We then turned to considering several types of adjustable bolt arrangements without springs. There was a lot of discussion around how to allow access to the threaded piece for tightening the lock in a TOPLOK Shroud design. The original design had the same shape as the TOPLOK Shroud, however this allowed only limited, awkward access. Eventually we settled on the current design, by opening up the back of the adapter for ease of access to the threaded piece. 77 Mr McClanahan was cross-examined by counsel for the appellants with respect to the process by which the inventors eventually settled upon a threaded adjustment mechanism. Relevantly to the point the appellants make on appeal, that cross-examination proceeded as follows: Now, when you decided, as I say, for whatever reason, not to utilise the self-adjusting approach, then who took the decision to simply use a bolt threaded through the back of the rigid block?---It would have been a group decision. The engineers would have taken recommendations to the audit managers and there would have been discussions and agreement on what direction we took. Now, after you had determined not to pursue the self-adjusting approach tell us what particular alternatives were taken to those people in relation to what I'll call the non-self-adjusting approach?---Well, non self-adjusting - by the time we got to that aspect of the design as I recall we focussed on a threaded bolt arrangement. There were no other options considered, I want to suggest to you?---I don't recall any. And the reason for that is that once you decide that it's impractical, whether it be for cost or other purposes, to go down the self-adjusting route the decision to be taken is a perfectly obvious one, isn't it?---I don't know whether it's completely obvious, but as a mechanical engineer the choice of a threaded option is one of the first that would spring to mind. Mr McClanahan also accepted that the marketing people within the first respondent expressed a preference for a take-up mechanism which operated automatically, ie for a mechanism which did not require manual adjustment to eliminate looseness. When it was put to Mr McClanahan that "virtually all of the time" of the inventors was spent on attempts to come up with such an automatic system, he responded: "the large chunk of the time, yes." Using this evidence as a starting point, the appellants submit that little or no inventive effort went into the development of the threaded adjustment option which was ultimately adopted. Indeed, they say that, once a self-adjusting system was rejected, the threaded option was obvious. 78 As will be apparent from the foregoing, this was not a case in which the content of common general knowledge in the patent area before the priority date was controversial. It was also accepted that both Mr McClanahan and Prof Wightley were persons skilled in the relevant art in the light of the common general knowledge. Rather, the controversy surrounded the factual question of whether the inventions in Jones II and Jones III, so far as claimed in the claims in suit, were properly to be regarded as obvious to persons such as they. The question, of course, was not whether the inventions were in fact obvious to Mr McClanahan or to Prof Wightley, but whether they would have been obvious to the notional person skilled in the relevant art, looking at the matter immediately before the priority date. 79 In a context such as the present, the connotation to be given to the word "obvious" is that proposed by Graham J in Olin Mathieson Chemical Corporation v Biorex Laboratories Ltd [1970] RPC 157, 187-188, approved by the High Court in Aktiebolaget Hassle v Alphapharm Pty Ltd (2002) 212 CLR 411, 433: Would the notional research group at the relevant date, in all the circumstances, which include a knowledge of all the relevant prior art and of the facts of the nature and success of chlorpromazine, directly be led as a matter of course to try the -CF3 substitution in the '2' position in place of the -C1 atom in chlorpromazine or in any other body which, apart from the -CF3 substitution, has the other characteristics of the formula of claim 1, in the expectation that it might well produce a useful alternative to or better drug than chlorpromazine or a body useful for any other purpose? [emphasis added] (ie added by the High Court) In the context of the present case, the question was whether the notional mechanical engineer, at the priority date, in all the circumstances, including a knowledge of Jones I and of Toplok, would directly be led as a matter of course to try an adjustment assembly of the kind described in the claims in suit, in the expectation that it might well produce an improvement in the attachment means previously employed. 80 The burden of persuading the court that an affirmative answer should be given to this question lay upon the appellants. In relevant respects, they relied upon the extract from Prof Wightley's affidavit which we have set out at par 75 above. He said that "the use of a screw adjustment" would "immediately come to mind". He said that such an adjustment was a solution which "would be readily apparent to any reasonably competent mechanical engineer and certainly one that he or she would be led to try". The primary Judge took the view that the value of Prof Wightley's evidence was compromised by reason of the circumstance that, from the outset, he had been exposed to the shortcoming to which Toplok was perceived to be subject, and to the terms of Jones I, as well as to those of the patents in suit. In other words, Prof Wightley, from the outset, knew the problem, and he knew the solution. The authorities make it clear that the caution with which his Honour approached the evidence of Prof Wightley was both justified and desirable: Meyers Taylor Pty Ltd v Vicarr Industries Ltd (1977) 137 CLR 228, 242; Alphapharm 212 CLR at 423-424 [21]; Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No 2) (2007) 235 ALR 202, 215 [46]. At this level of analysis, nothing put on behalf of the appellants on appeal has cast any doubt upon the approach which his Honour took. Within the confines of that approach, the matter of obviousness was essentially one of fact. We are not persuaded that his Honour erred in declining to be satisfied that Prof Wightley's evidence, of itself, warranted the conclusion that the adjustment assembly introduced by Jones II and Jones III was obvious. 81 As we have said, the focus of the appellants' case on appeal was upon par 80 of his Honour's reasons, and upon what they contended was his Honour's error in according considerable weight to the evidence of the inventor (effectively that of Mr McClanahan). It does appear that his Honour placed "considerable weight" on the evidence of Mr McClanahan. In addition to par 80 of his reasons (see par 24 above), his Honour had earlier said (in his discussion of Mr McClanahan's evidence): Mr McClanahan was cross-examined at some length, however, in my view, his evidence was not materially disturbed. As I note below at [80], the evidence of an inventor of a patent in suit is given a particular form of weight, and I am satisfied that Mr McClanahan's evidence attracts that weight in this case. That Mr McClanahan's evidence should have been given special weight, by reason only of the fact that he was the inventor, was inconsistent with Wellcome and was, therefore, an error on the part of his Honour. However, it remains to consider whether that error materially affected his Honour's conclusion, and if so whether we should reach a different conclusion on appeal. 82 In paragraph 80 of his reasons, his Honour referred to the following aspects of Mr McClanahan's evidence: · his conclusion that the skilled person would be unlikely to use a bolt and nut assembly because of expected problems such as rusting and deformation of the thread; · his opinion on the question whether the tendency towards looseness in Toplok was a design flaw; · his explanation of the operational contexts in which that tendency expressed itself, why, and how it was remedied in various ways. 83 As to the first point, when his Honour actually came to determine whether a threaded adjustment apparatus would have been an obvious means of overcoming such shortcomings as there were in Toplok, he said: To a large extent it is common ground that there were problems in the operation of Toplok. As to the extent to which those problems were known at the priority date, while I accept that it was common general knowledge among mechanical engineers that problems arising as a result of looseness between the different parts of the wear assembly could be reduced by the use of adjustment assemblies (such as a screw adjustment), I cannot go further and accept Professor Wightley's evidence that it would be readily apparent to a mechanical engineer considering the problems in the Jones I design that the use of a screw adjustment would be an obvious solution. Professor Wightley's evidence must be approached with some caution because he was simultaneously informed of both the nature of the problem encountered by the Jones I design and also the solution ultimately supplied by the patentee in this case. Having been shown all of Jones I, Jones II and Jones III at the time he was instructed, Professor Wightley was aware of the solution at the time he was asked to express his opinion about its obviousness, which in my view reduces the weight of his evidence on this point. The difficulty with both the problem and its solution being presented to Professor Wightley as part of his instructions was that he did not seek to identify the causes of the problem because there was no need to do so. Although Professor Wightley may have been able to go beyond his instructions and investigate this issue independently, he understandably did not do so. As a consequence of these circumstances, Professor Wightley did not consider any possible alternative solutions. His instructions were only to comment on the obviousness or otherwise of the threaded adjustment set out in the patent, which meant that he did not consider the possibility that looseness of wear members could be overcome by adjusting tolerances or using rails or shins which were adopted as temporary fixes. We do not believe that his Honour based his final determination of the point upon his initial view that Mr McClanahan's evidence was to be given considerable weight. The aspect which most strongly bore upon his thinking was that Prof Wightley's opinion had to be discounted because it was formed with the advantage of hindsight. 84 As to the second point, it does appear that the primary Judge preferred Mr McClanahan's opinion that the tendency to looseness in Jones I was not a design flaw. But whether such a flaw existed was not the factum probandum in the present case. It was because Prof Wightley recognised the existence of a design flaw that he the more readily perceived the solution. It was how he, as a mechanical engineer, came to the opinion that the solution was obvious. Mr McClanahan, by contrast, gave evidence that Toplok worked well in the field save when used on the larger buckets. On this point, the primary Judge said: In addition, I am not persuaded that Professor Wightley was correct in describing the problems arsing from looseness in the Toplok product as being a "design flaw". Although the evidence could be understood to establish that some recurrent difficulties plagued the usage of Toplok, it did not go so far as to establish the existence of a design flaw in Jones I. The problems regarding looseness were problems which arose from the increase in size of the buckets in specific instances, and these problems were alleviated by a variety of practical means which did not involve any adjustment mechanism. There was also evidence that considerable numbers of the Toplok shrouds had been sold and that they had some commercial success. In such a context, a conclusion that the inventive step in Jones II and Jones III was obvious cannot, in my view, be sustained. It will be noted that his Honour's emphasis here was upon the respondents' experience with Toplok in practice. This was a substantially factual matter from which his Honour drew his own inferences as to the absence of a design flaw and on the subject of obviousness. It seems to us that his Honour's conclusions in relevant respects were uninfluenced by the special weight he may have accorded to the evidence of Mr McClanahan. In any event, they reflect the conclusions we would ourselves reach in relevant respects. 85 As to the third point, this is to an extent covered by the paragraph from the primary Judge's reasons most recently set out above. As it seems to us, it involves pure questions of fact upon which Mr McClanahan was best placed to give evidence. In accepting that evidence, his Honour was not involved in any kind of exercise which required him to accord a particular weight to that evidence. The fact is that the thrust of his Honour's reasons was to reject the evidence of Prof Whiteley because his opinion had been inappropriately tainted, from the outset, in the way we have described. As we have said, nothing put to us on appeal persuades us that his Honour was in error to have proceeded in this way. 86 It should not, in our view, be overlooked that the inventors were employed by, or associated with, the commercial enterprise which was responsible for Toplok, and thus had every incentive to devise an improvement for that apparatus. The fact that they did so only after a considerable period of giving attention to the problem speaks against the proposition that the solutions which they found would have been obvious to the notional mechanical engineer. The appellants would have us discount matters of this kind, relying upon the evidence given by Mr McClanahan under cross-examination to which we have referred at par 77 above. They submit that most of the effort put in by the inventors was devoted to attempts to devise a self-adjustment mechanism at the behest of the respondents' marketing people. In our view, however, this criticism does not meet the point. It commences from a standpoint at which the inventors had both identified the problem and resolved that an adjustment mechanism in the lock, whether automatic or manual, was the solution most likely to yield a useful result. We do not accept that the mere fact that Mr McClanahan conceded that, having investigated self-adjusting options at length, and having discarded them, "the choice of a threaded option is one of the first that would spring to mind" is effectively the same as a concession that the adjustment assemblies incorporated into the inventions as registered would have been obvious, from the outset, to the notional mechanical engineer knowledgeable in the relevant field. 87 There is a further difficulty with the appellants' reliance upon the answer from Mr McClanahan to which we have referred, and upon the corresponding passage in the affidavit of Prof Wightley. Mr McClanahan referred only to "a threaded option". Prof Wightley referred only to "a screw adjustment". Neither witness went to the point of saying that, at the priority date, he (or any mechanical engineer knowledgeable in the field) would have been directly led, as a matter of course, to try the very adjustment assembly incorporated into Jones II and Jones III in the expectation that it might well produce an improvement on Toplok. This is more than a pedantic distinction. Relevantly to the present debate, the claims in suit are much more specific than mere requirements that threaded options or screw adjustments be employed. Claim 1 of Jones II requires that the lock include an adjustment assembly which selectively varies the relative positions of the two faces of the lock. Claim 51 says much the same thing. Claim 1 of Jones III requires that the adjustment assembly be able to vary the relative positions of the bearing surface on the mount and the bearing surface on the opening in the wear member. These are quite specific requirements, and the obviousness of them is not, in our opinion, established merely by the suggestion that threaded options or screw adjustments (otherwise unparticularised) would readily spring to mind. 88 The matter of obviousness was one for the appellants to establish. His Honour was, in our view, correct to hold that they had not done so. We would dismiss so much of the appeal as relates to the primary Judge's rejection of the appellant's case on obviousness.

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Cases Cited (15)