The secret use claim
60 The second point of contention concerns para 5(d) and the claim that the invention is not a patentable invention, so far as claimed by each of the five claims, "because it was used in secret" by Southern Cross before the priority date of each claim by reason of Southern Cross causing a particular advertisement to be published on or before 8 January 2012 in the Australasian Mine Safety Journal (the "AMSJ") with the object of bringing about a sale of one or more lighting towers made in accordance with the pleaded invention.
61 The text of the statutory ground relied upon by Mickala is in these terms:
18 Patentable inventions
…
Patentable inventions for the purposes of an innovation patent
(1A) Subject to subsections (2) and (3), an invention is a patentable invention for the purposes of an innovation patent if the invention, so far as claimed in any claim:
…
(d) was not secretly used in the patent area before the priority date of that claim by, or on behalf of, or with the authority of, the patentee or nominated person or the patentee's or nominated person's predecessor in title to the invention.
62 Mickala's position is that it has pleaded a case of lack of novelty based on publication of the advertisement in the AMSJ in Australia on or before 8 January 2012: para 5(a)(i); [22] of these reasons. No objection is taken to that pleading.
63 However, Mickala understands the position of Southern Cross to be that it will contend that the advertisement does not disclose "all the inner workings of the machine" such as whether the alternator is a low voltage alternator; whether the low voltage alternator has a voltage output of less than 50V; whether such an alternator is connected directly to a shaft of the engine; and other such matters. Thus, Mickala contends that, to the extent Southern Cross has not disclosed such integers (or others) of the claims, the alternative case to be advanced is that Southern Cross has kept aspects of the pleaded invention "secret" within the understanding of the term "secretly used" in s 18(1A)(d) of the Act, in the patent area before the priority date.
64 The pleaded facts are that Southern Cross secretly used the pleaded invention by causing the advertisement to appear in the AMSJ on or before 8 January 2012 and the object of so placing the advertisement was to bring about a sale of products (one or more lighting towers) made in accordance with the pleaded invention (that is, embodying the essential integers).
65 Thus, the elements of the claim are said to be causing the advertisement to be placed for the object of making a sale of a product made up of "inner workings" where those products, and those inner workings, are the subject of patents, and the advertisement does not disclose the integers of the relevant claims of the patent for the product and its inner workings. As a result, the patentee is said to have enjoyed a period, before the filing of the patent application, during which it has derived a commercial benefit of placing an advertisement for the sale of products with the object of bringing about a sale of products embodying the invention as claimed without disclosing the essential integers of the claims for the invention. Thus, the patentee was provided with a de facto extension of the patent term by securing private advantage without the corresponding public disclosure as the price of the grant of the monopoly.
66 The emblematic authority for these propositions is said to be Azuko Pty Ltd v Old Digger Pty Ltd (2001) 52 IPR 75 ("Azuko"), a decision of the Full Court of this Court.
67 Azuko was concerned with claims by "OD" of infringement of two patents concerned with the features of a "down hole reverse circulation percussive hammer incorporating a face sampling drill bit" (the "hammers"), by "A" and "S". The respondents denied infringement and cross-claimed for revocation of the patents on a number of grounds including that the alleged inventions had been secretly used before the priority dates. That question came down to one of whether "manufacture simpliciter" of the hammers before the priority date, but with a view to eventual sale after the application was made for the patents (and therefore manufacture and stockpiling of hammers), had the result that the invention had been secretly used before the priority date: Azuko, Gyles J at [178]; Beaumont J at [72] generally agreeing with Gyles J "that there was no relevant "use" within the meaning of s 18(1)(d)" Neither of those steps (manufacture and stockpiling) had been done in public. Moreover, what was done was intended to be confidential: Gyles J at [178].
68 In Azuko, Gyles J concluded that the making of the hammers was not "use" of the invention "for relevant purposes" (that is to say, relevantly for these proceedings, for the purposes of s 18(1A)(d) of the Act): Gyles J at [179] and [183].
69 That result was said to follow as a natural outcome of the governing principle. That principle was said to derive from Morgan v Seaward (1837) 2 M & W 544; 150 ER 874 and particularly the observations of Parke B at M & W 559; ER 880 ("Morgan"). In Morgan, Parke B observed that if an inventor could "sell his [or her] invention" keeping the secret (of it) to himself or herself (for example, a product or a substance), and when it was likely to be discovered by another (typically a trader), file an application for a patent, he or she might by such conduct have obtained, in a practical sense, a monopoly for "a much longer period" than the statutory period of the grant. As Gyles J observes, the same point was made by Lord Diplock in Bristol-Myers Co v Beecham Group Ltd [1974] AC 646 ("Bristol-Myers") although with particular focus upon the factor that would engage the principle.
70 Lord Diplock at 680-1 observed that if an inventor has "already reaped commercial benefit" from a "de facto monopoly" arising out of "concealment" from traders of, in that case, how the new substance could be made, the patent subsequently obtained will be susceptible of revocation as the inventor "will not be permitted to prolong his monopoly" for an additional statutory period. The critical matter for Lord Diplock was whether the inventor had reaped a commercial benefit from a de facto monopoly (a "use" in these senses) owing to his or her concealment of the essential features of the invention.
71 At [180], Gyles J noted the primary judge's references to the relevant historical basis for the "secret use ground of revocation" and at [181], Gyles J formulated a "practical test" of the content of that principle derived from the observations of Lord Diplock and Parke B referred to earlier.
72 Those paragraphs are in these terms:
180 The trial judge drew attention to the relevant historical basis for the secret use ground of revocation, namely, to prevent a patentee from gaining a longer monopoly than the statutory period by enjoying a period of de facto monopoly through the secret use before the priority date, without meeting the corresponding obligation attaching to such a monopoly, namely, the public disclosure of the invention [Gyles J then referred to the observations of Parke B in Morgan].
181 This passage [a reference to the observations of Lord Diplock at 680-1] suggests a practical test: has what occurred amounted to a de facto extension of the patent term? The answer to this will usually depend upon whether the patentee reaped commercial benefit from what was done before the priority date. In the present case, in my opinion, there has been no de facto extension of the term of the patent by making the articles in question.
73 At [183], Gyles J said this:
183 The test of illegitimate extension of the patent term yields satisfactory results in differing circumstances. If the invention is a process or method, to secretly use the process or method to make goods for sale can readily be seen as a secret commercial use of the invention which would extend the patent if done prior to the priority date. Another example of secret commercial use of that character is if the product which is manufactured according to a product claim is then secretly used as part of a manufacturing process to make other goods before the priority date. Another example would be the use of a device made according to the [patent in suit in the proceedings] as part of a drill rig engaged in commercial drilling, but in conditions of secrecy, prior to the priority date. To make an article for ultimate sale has, no doubt, a commercial aspect, but it does not amount to use of the product made and does not involve any de facto extension of the term of a patent claiming the product. The manufacturing of goods is not, in my opinion, commercial use of those goods.
[emphasis added]
74 Southern Cross says that the act, said to demonstrate that the invention, as claimed, was secretly used, is the placing of an advertisement in a journal coupled with a particular pleaded "object" of obtaining a sale. Southern Cross says that as the act of manufacturing patented products and stockpiling those products before the priority date for later sale (after the filing of the patent application) was found not to constitute acts of "reaping commercial benefit" or seeking to obtain a "de facto extension" of the term of the patent by making the articles in question, it is difficult to see how the act of placing an advertisement in relation to the products in an industry journal could be regarded as having "secretly used" the invention, as claimed, in the patent area before the priority date.
75 The advertisement is in evidence as Exhibit "RJF-12" to the affidavit of the solicitor for Southern Cross, Ms Forsyth, affirmed on 11 February 2020. It is a single page advertisement from a two page print excerpt. The first page is simply the cover page of the AMSJ. The second page is the advertisement itself, headed "Southern Cross Group", referring to Southern Cross. The advertisement contains a large photograph depicting three fully extended lighting towers. Adjacent to that photograph, the advertisement lists the specifications of a "heavy duty skid lighting tower", a "tandem axle lighting tower", and a "single axle lighting tower", and below the photograph, text details the qualities of the towers, such as there being no need to conduct statutory checks required for high voltage equipment due to their low voltage status.
76 For each of the three advertised lighting towers, the disclosed specifications include: the standard equipment, length, width and height (in millimetres); fully extended mast height (in metres); the engine model, speed (in revolutions per minute), continued power (in kilowatts) and number of cylinders; the alternator, its voltage measurements and style and the tower's rating voltage (using the measurements A and VDC, or amperes and voltage direct current, each tower having a 28VDC rating voltage and being equipped with a 24VDC-200A LINZ alternator with electronic regulation); fuel tank type, fuel tank capacity (in litres); type of lights (24VDC spot and flood beam lights in each case); mast extension (hydraulic operation in each case), number of mast sections (2 or 3, depending on which tower), mast rotation (each is able to rotate 340 degrees by hydraulic operation); light bar tilt (each is able to tilt 90 degrees by electric operation); noise rating (67 decibels each); and engine protection (each engine is equipped with fail safe shutdown, providing protection against issues stemming from the engine's temperature or being low on oil or water). In relation to voltage, the advertisement adds this: "The Southern Cross LED Lighting Towers are COMPLETE EXTRA LOW VOLTAGE Unit with absolutely no high voltage in any part of the [unit's] electrical system". It also says this: "Extra low voltage (no HV statutory checks required)". A heading directly above one of the lighting towers depicted in the large photograph says this: "Extra Low Voltage Safety". In relation to the alternator, the advertisement says this, "The revolutionary Linz direct drive alternator also minimises maintenance costs".
77 As mentioned earlier, Mickala relies upon the advertisement as a ground of its lack of novelty claim. It says that the advertisement discloses the essential integers of the claims. Southern Cross does not accept that the advertisement discloses all the essential integers of either Claim 1 or any of the other claims. Southern Cross says that the advertisement "does not disclose many of the essential integers of the claim". Nothing is served by entering into that debate in these proceedings. It would be undesirable to do so. It is a matter for trial. However, let it be assumed for present purposes that the advertisement discloses some of the integers of Claim 1 (and the other claims) but not all of the integers. Upon that assumption, the question to be presently decided is this. If Mickala makes good at trial the pleaded facts that Southern Cross has caused the advertisement to be placed in the edition of the AMSJ in question coupled with an object of bringing about a sale of one or more lighting towers in accordance with the invention as claimed, does that conduct, as so pleaded, give rise to at least an arguable cause of action in reliance on s 18(1A)(d) of the Act which ought properly be the subject of leave to amend?
78 If the ultimate position at trial is that the advertisement is shown to publicly disclose all the essential integers of the claims, the invention, as claimed, lacks novelty. Moreover, the public disclosure of the invention as claimed (if it be the case), is entirely inconsistent with secret use. If, by reason of the advertisement, Southern Cross has engaged in public disclosure of some of the integers but not all, how does secret use find expression in the impugned conduct?
79 In challenging the adequacy of the proposed pleading on the secret use ground, Southern Cross relies upon the explanatory principles identified by Burley J in Coretell Pty Ltd v Australian Mud Company Pty Ltd (2017) 250 FCR 155 at [216] to [221]; Jagot J and Nicholas J agreeing, respectively, at [1] and [2]. Those observations of Burley J take up and apply the observations of Gyles J in Azuko, and other authorities. Those observations are set out below:
216 First, the reference to "use" in the context of "not secretly used" in s 18(1)(d) (and s 18(1A)(d), which is relevantly the same), does not have the same meaning as "exploit", but nor does it exclude the other aspects of the monopoly reflected in the definition of "exploit". Rather, a correct understanding of the word arises from an understanding of the word "use" derived from the historical genesis of the secret use provision; Azuko (per Gyles J [180]-[185]), Beaumont J agreeing at [72]) …
217 … However, Gyles J concluded that "use" and "exploit" were not synonyms for the purpose of s 18(1)(d) of the Act. "Use" had a narrower meaning and was to be understood by reference to a practical test, which was consistent with the historical antecedent of the secret use provisions. This called for an inquiry as to whether, by virtue of the impugned conduct, the patentee had reaped commercial benefit from what was done before the priority date. If so, the patentee had obtained a de facto extension of the patent term: Azuko at [181].
218 … The mere retention of products for ultimate sale, after the filing of a patent, of manufactured items that fell within the claim did not amount to relevant "use". …
219 Justice Gyles noted, however, that the proposed definition of "use" within s 18(1)(d) does not depend on "use" being exclusive to other aspects of the monopoly granted to the patentee within the definition of "exploit" in the Act (at [186]). It may be that the various kinds of exploitation within that definition may overlap in different circumstances, for example, to "sell" goods may be seen as a "commercial use" of the goods.
220 The view expressed by Gyles J was referred to with apparent approval by Dowsett J in Grove Hill Pty Ltd v Great Western Corporation Pty Ltd (2002) 55 IPR 257 (Grove Hill) at [212], [213] (French J - as he was then - and Gyles J generally agreeing at [125], [349]).
221 Secondly, in Grove Hill, Dowsett J considered that although the words "secretly used" in s 18(1)(d) and "secret use" in s 9(a) are not defined in the Act, it is likely that secret use and public use are mutually exclusive (at [212]). That was the approach adopted by Gyles J in Azuko at [178] and [182]-[183].
[emphasis as per counsel's outline at [18]]
80 In those observations, Burley J addresses the topic of the meaning of the term "use" in the context of the phrase "not secretly used" in s 18(1)(d) and those observations relevantly apply in the context of s 18(1A)(d).
81 In those observations, Burley J considered whether the term "use" or "used" has the same meaning as the term "exploit" in the Act. Section 13 of the Act gives the patentee the exclusive rights during the term of the patent to "exploit" the invention. The scope of the grant is contained in the breadth of the definition of the term "exploit" in s 3, Sch 1. The term "use", however, for the purposes of the phrase "not secretly used" does not have the same meaning as "exploit" with the result that a patentee need not necessarily engage in one of the statutory conceptions of the term "exploit" to be found to have made "use" of the invention as claimed for the purposes of s 18(1A)(d) of the Act. That follows from the particular history of the evolution of the secret use provision as explained by Parke B in Morgan, Lord Diplock in Bristol-Myers and Gyles J in Azuko.
82 The relevant "use" engaging the statutory conception of "not secretly used" in s 18(1A)(d) is taking a step (perhaps not a step constituting an act falling within the term "exploit", but nevertheless possibly including such an act in the relevant class of case) from which it can be concluded that the patentee has, before the priority date, "reaped commercial benefit from what was done before the priority date" (Azuko, Gyles J at [181]) such that there has been a use of the invention. There must also be a use of the invention as claimed. I will return to that matter later in these reasons.
83 There is, however, in my view, an additional element to such a claim to be found within the formulation of Gyles J, although the authorities are not as clear on the topic as they might be. In Azuko, Gyles J at [181] (Beaumont J agreeing at [72] in the terms earlier mentioned) extensively quotes as authoritative the observations of Lord Diplock in Bristol-Myers at 680-1 including Lord Diplock's remarks noted at [70] of these reasons which recognise that the vice in conduct which resulted in the statutory prohibition on secret use, is conduct of an inventor reaping a commercial benefit from a de facto monopoly in his or her invention "owing to his [or her] concealment from all other traders" of, put simply, the essential elements of the invention. The important elements are reaping a commercial benefit from a de facto monopoly owing to concealment. Concealment gives rise to the de facto monopoly which enables the commercial benefit to be extracted or reaped.
84 In Azuko, Gyles J, with great respect, put the "practical test" he formulated at [181] in slightly shorthand terms rather than the formulation precisely adopted by Lord Diplock. Gyles J observed that the practical test is: has "what occurred" amounted to a de facto extension of the patent term. Gyles J also observed that the answer will usually depend upon whether the patentee has reaped commercial benefit "from what was done" before the priority date. Gyles J formulates the practical test by adopting the phrase "de facto extension" of the term which is a reference to Lord Diplock's de facto monopoly. However, by framing the test by using the terms "what occurred" and "what was done", without identifying the content of the conduct, it is not clear whether Gyles J is expressly adopting, as an element of "what must have occurred" or "what must have been done" in making out a claim of secret use, the act of exercising a de facto monopoly or a de facto extension of the term owing to concealment by the inventor as a result of which the inventor has been able to extract, from that de facto monopoly, monopoly rents (as the economists would say) or as Lord Diplock would say, reap commercial benefits or commercial advantage.
85 Gyles J, by extensively quoting at [181] the observations of Lord Diplock, leading to the formulation of his Honour's own observations, seems to have adopted the notion that what lies at the heart of secret use is deriving commercial gain from a de facto monopoly or extension brought about by concealment of the essential features of the invention.
86 Accordingly, concealment is an essential element of the claim and the reference to "not secretly used" seems to suggest "deliberate" concealment. Concealment is said by Lord Diplock to be the very thing that gives rise to the de facto monopoly that presents the opportunity to extract commercial advantage in the period before the priority date. However, neither Gyles J nor Beaumont J expressly address "concealment" in that sense.
87 The background facts in Bristol-Myers, briefly, were these. In 1962, Beecham had discovered ampicillin. In that year, the company produced a considerable quantity of a substance called ampicillin trihydrate although Beecham's officers and researchers did not recognize that steps and processes they had taken had resulted in its production. Some of the ampicillin trihydrate was blended with ampicillin, reduced into capsules for sale and sold by way of trade. In late 1963, Beecham discovered that ampicillin trihydrate had special properties and particular advantages over ampicillin, as a result of which Beecham dedicated its production facilities to ampicillin trihydrate rather than ampicillin. In March 1963, Bristol-Myers applied for a patent for ampicillin trihydrate. Beecham filed an opposition to the application on the ground that the invention, so far as claimed, had been used in the United Kingdom before the priority date: s 14(1)(d), Patents Act 1949 (UK). However, s 14(3) of that Act provided that for the purposes of s 14(1)(d), "no account shall be taken of any secret use". Thus the questions were whether ampicillin trihydrate had been used by Beecham before the priority date of the Bristol-Myers claims and whether any contended use relied upon by Beecham constituted "secret use", in which event, that use would be disregarded as prior use grounding opposition to the application.
88 In the House, Lords Reid, Morris, Diplock, Cross and Kilbrandon accepted that the sale of the ampicillin trihydrate capsules by way of trade was use of the invention so far as claimed. However, Lord Reid and Lord Morris did not accept that the conception of "secret use" was to be understood according to its natural meaning as importing the taking of steps to "deliberately conceal" use of the invention. Lord Diplock (Lord Kilbrandon agreeing at 689), expressed the following observations. As to the context of the "use" relating to the sale of the capsules, Lord Diplock said this at 684:
What they [Beecham] rely upon is their subsequent sale upon the market of the ampicillin trihydrate which was put into capsules of ampicillin. What they had done was to sell something that was in fact ampicillin trihydrate. That neither they knew nor those who bought the capsules from them could know that what the capsules contained included ampicillin in that particular form could not alter that fact. They intended to sell those capsules which they in fact sold, and to sell them by way of trade. The extent of their own knowledge of the composition or the qualities of the contents of the capsules they were selling was no more relevant than the extent of the knowledge of those who bought the capsules from them. Bristol-Myers were not entitled to a monopoly which would prevent Beechams from selling or their customers from buying in the course of trade what they had sold or bought before.
89 Lord Diplock then considered the second question of whether the prior use by way of sale of the ampicillin trihydrate capsules was a "secret use" within the meaning of the section. As to that question, Lord Diplock introduced his remarks in this way at 684-5:
My Lords, to describe the unconditional sale of a substance on the open market without any of the parties to the sale taking any steps intended to conceal what they are doing as a "secret use" of that substance seems to me to be an abuse of language. What is relied upon in the instant case as making Beechams' sales of the trihydrate "secret" is the finding of the Patents Appeal Tribunal that no purchaser of the capsules would have been able to ascertain by analysis that any trihydrate was present in them.
[emphasis added]
90 Lord Diplock also said this at 685:
My Lords, in its ordinary connotation, particularly as descriptive of actions, I agree with the Court of Appeal and the Shorter Oxford English Dictionary (1933), vol. 2, p. 1826, that "secret" means: "Done with the intention of being concealed; clandestine." To ascribe to it a meaning wide enough to include actions done "unwittingly," a state of mind which is incompatible with any intention to conceal is, in my view, a misuse of the adjective "secret" or, as Edmund Davies L.J. points out in his judgment [in the Court of Appeal], even more so of the adverb "secretly" which is the form in which it would have to be read into section 14(1)(d) where it would qualify the verb "was used." To sell something to the public unconditionally and thereby to put it out of one's power to stop them finding out anything that can be found out about it is, in my view, the very opposite of "secret" use of the thing that it sold.
My Lords, I see nothing in the context of section 14 itself to indicate that "secret use" in subsection (3) bears anything other than its ordinary meaning.
[original emphasis]
91 Lord Reid, in his short judgment, observes at 665 that he cannot agree that the term "secret" means "deliberately concealed" although "no doubt that is the normal meaning of the word". Lord Reid observes at 665 that analogically the phrase "secrets of nature" merely means "something undiscovered without any implication of deliberate concealment". Lord Reid considered that giving the word its most usual meaning would lead to an unreasonable result which would be avoided by taking the less usual meaning. Lord Reid illustrated what he considered to be an unreasonable result of adopting the meaning attributed to "secret use" by Lord Diplock, in this way:
I think that here the result would be unreasonable. I can see nothing in the act or its apparent policy to justify what seems to me to be a strange result: If one man, he who makes the concealment, alone knows the truth, it is secret, but if no one at all knows the truth it is not secret.
[emphasis added]
92 Lord Reid considered that the facts of the Bristol-Myers case provided an illustration of an unreasonable result that would be avoided by adopting a different approach to that of Lord Diplock on the question of construction. The contention giving rise to the feared unreasonable result and the answer thought to avoid that result was put this way at 666:
[Beecham] submitted a further argument to the effect that if a substance is sold that use cannot be secret in any circumstance. No doubt that is true as a general rule because, at least in the absence of some special contractual provision, any purchaser is free to investigate the nature of what he has bought. And investigation will generally reveal its true nature. The purchaser has the means of knowledge.
But in this case the sales by [Beecham] did not give to any purchaser the means of knowledge. It is admitted that no known method of examination or analysis would have enabled any scientist to discover that there was any ampicillin trihydrate in any of the ampicillin sold by the respondents before the priority date… The fact is that the trihydrate could not have been detected at any time relevant to this case. If I am right in holding that "secret" applies to a case where no-one knew the truth, a fortiori it must apply to a case where no one could have known the truth.
93 Lord Morris at 673 considered that the question of whether the use of ampicillin trihydrate by Beecham was or was not secret use raised "a question of no little difficulty". Lord Morris regarded it as important to bear in mind that the question arose in the context of proceedings by way of opposition to the grant of a patent and not within "any question of the revocation… of a grant if made". The ground of opposition arising under s 14(1)(d) of the 1949 (UK) Act (and its relationship with secret use in s 14(3) of that Act) was new to the statutory patent law of the United Kingdom: at 673. In the context of a claim for revocation of a grant of a patent, the relevant question under that Act was whether the invention as claimed "was secretly used": s 32(1)(l): Lord Reid at 665; Lord Morris at 674. It is not clear whether the views reached by Lord Morris in attributing meaning to the phrase "secret use" in the context of opposition proceedings might have been different had Lord Morris been considering the phrase "secretly used" in the context of a claim for revocation of a grant. At 674, Lord Morris said this:
There is undoubtedly a measure of ambiguity in the words "secret use". A secret is something that is kept from knowledge. Must it be within the knowledge of some and only kept from the knowledge of others? Must the notion of "secret use" involve that there is a deliberate withholding by some of knowledge from others? Or is there "secret use" if there is use without there being any knowledge of such "use". There is clearly force in the contention that the words "was secretly used" (as in section 32) may contain a nuance of meaning (not possessed by the words "any secret use") suggesting conscious deliberate action. But, on the other hand, it can rationally be said that something was secretly used if its use was not and could not be known. Furthermore, it can be said that if there is inquiry whether something was or was not used the question of intention may have little relevance.
If the phrase "was secretly used" inevitably implies conscious deliberate action the result would be that the use would have to be conscious deliberate use and use the secrecy of which was also the result of conscious deliberate action. I would find it difficult to construe the phrase "was secretly used" by applying an objective test to the word "used" and a subjective test to the word "secretly". Rather would I think that just as user may be established in fact as something that took place so also that the secrecy of the user may similarly be established. If there may be use of a thing without an intention to use it so the accompanying element of secrecy (if it existed) may be without any pre-requisite of intention.
94 Lord Morris at 676 ultimately concluded that the kind of prior use that would disentitle an applicant from being granted a patent was use that gave knowledge of it or the means of knowledge of it to the public. Secret use would be use that did not so give knowledge.
95 Lord Cross thought that it may be that when the United Kingdom parliament adopted the phrase "secret use" it did so "in contradistinction to "public" or "open" use": at 687. Lord Cross accepted that "in ordinary parlance there is a great difference between using something "unwittingly" and using it "secretly"" and yet there were considerations that suggested that "secret use" ought to be construed "in an "objective" rather than in a "subjective" sense": at 687. Ultimately, Lord Cross thought it "satisfactory to hold that if a man by selling the article in question puts it out of his power to prevent a purchaser from discovering, if and when he can, the presence in it of the substance in question he has made a "non-secret" use of the substance whatever be his own state of mind and whether or not analysis is, in the existing state of knowledge, possible": at 688-9.
96 This question was taken up in Australia in Melbourne v Terry Fluid Controls Pty Ltd (1993) 26 IPR 292. In that case, the applicant's patent had been granted in respect of "an electrically-insulated heat resisting air cylinder for use as an actuator for a fused salt electrolytic cell crust-breaking implement" for use in pot reduction smelting processes in the industrial reduction of alumina to aluminium. The patent in suit was the subject of a cross-claim for revocation on the ground that the invention as claimed was anticipated by the importation into Australia by "SMC" (and adjustments made to the cylinders by SMC) of particular cylinders delivered to a potential purchaser "Alcoa" for installation in a potline reduction smelter. SMC had hoped to supply 1050 cylinders to Alcoa in due course. The adjustments to the cylinders were not made by SMC until after the priority date and nothing done before the priority date amounted to prior use justifying want of novelty by reference to the cylinders. Shortly after the priority date the cylinders were delivered to Alcoa. The contention of the cross-claimant was that the use of the cylinders (the use consisting of adjustments and delivery to Alcoa for trial and evaluation) amounted to "secret use" for the purposes of s 100(1)(g) and s 100(2) of the Patents Act 1952 (Cth). In that context, Jenkinson J said this at 302:
This is not a case of unconditional sale on the open market, as was in question in [Bristol-Myers]. Nor is it a case of trial and evaluation for the purpose of assisting the manufacturer to learn whether his product needs improvement, or to learn how it may be improved. This is a case of demonstration of a product to a potential buyer. I think that the application of the reasoning of the majority in the Bristol-Myers case to a case of this kind requires that "secret use" cannot be found unless the supplier of the product for trial, first, intends that knowledge of the design be restricted to those of the potential buyer's employees and officers whose function it is to participate in making the trial or the evaluation, and second, has reasonable grounds for believing, either that his intention is known to the employee or officer of the buyer whose function it is to make his intention known to the participants in the trial and the evaluation, or for believing that the participants will assume that that is his intention.
There was no evidence on which to base a finding of a belief, or of grounds for a belief, in the mind of any officer or employee of SMC that the relevant intention, if it existed, was known to any officer or employee of Alcoa, or that the participants in the trial and evaluation at Portland should assume that those who were in control of SMC had the relevant intention.
97 The reasoning of Lord Diplock and Lord Kilbrandon in Bristol-Myers taken together with the emphasis by Jenkinson J on the question of intention and his Honour's adoption of the construction reflected in the reasoning of Lord Diplock and Lord Kilbrandon, no doubt led to the observation at [13610] in Patent Law in Australia, 3rd Edition, Bodkin that "the authorities support the proposition that deliberate concealment is a necessary element of secrecy", citing the observations of Lord Diplock and noting the role of intention reflected in the reasoning of Jenkinson J in Melbourne v Terry Fluid Controls Pty Ltd.
98 In attributing meaning to statutory text, I apply the following principles: Thiess v Collector of Customs (2014) 250 CLR 664 at [22]; Wilson v Anderson (2002) 213 CLR 401 at [8]; Lacey v Attorney-General for the State of Queensland (2011) 242 CLR 573 at [43]; CIC Insurance Limited v Bankstown Football Club Limited (1997) 187 CLR 384 at 408; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69] and [71]; Commissioner for Railways (NSW) v Agalianos (1955) 92 CLR 390 at 397; Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at [47]; Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503 at [39]; SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362 at [14], [35] - [40]; and s 15AA of the Acts Interpretation Act 1901 (Cth). I have recently set out these principles in detail in Application by Isentia Pty Limited [2020] ACopyT 2 at [60]-[73]. I will not set the principles out in detail in these reasons.
99 As already mentioned, the particular text in question is to be found in s 18(1A)(d) of the Act which concerns whether an invention is a patentable invention for the purposes of an innovation patent. Section 18(1) is concerned with that question in relation to a standard patent. The distinction is important because of the processes which apply administratively to each. In the case of an innovation patent, the Commissioner undertakes a formalities check in respect of the application and if satisfied on the balance of probabilities that the application passes the formalities check, the Commissioner must accept the patent request and complete specification: s 52. An application for the grant of a standard patent is subject to an opposition procedure described in Chapter 5 of the Act. Chapter 9A of the Act addresses the topic of examination, re-examination and opposition in relation to innovation patents. Section 101A deals with the examination by the Commissioner of the complete specification relating to an innovation patent. That examination is to be the subject of a report under s 101B(1) and the matters to be examined include whether the invention, so far as claimed, complies with s 18(1A)(a), (b) and (c), and other matters: s 101B(2). Questions arising under s 18(1A)(d) (whether the invention as claimed was secretly used) are not within the scope of the examination: s 101B(2)(a)-(i). The examination is to be the subject of a certificate under s 101E(2) of the Act if the Commissioner is satisfied of the matters recited at s 101E(1) of the Act. Those matters do not engage questions arising under s 18(1A)(d) of the Act. A certificate issued under s 101E is susceptible of revocation under s 101EA and s 101F of the Act. After an innovation patent has been certified by the Commissioner, the Commissioner may be called upon to conduct a re-examination of the complete specification. However, the grounds for revocation of the patent upon re-examination engage questions arising under s 40(2) or (3) of the Act, questions arising under s 18(1A)(a), (b) or (c) and questions of whether the invention is not a patentable invention under s 18(2) or (3). None of these questions engage issues in relation to secret use. An innovation patent might be revoked under s 101J of the Act. The Minister or any other person with standing may oppose an innovation patent that has been certified and seek revocation of it on one or more of the grounds set out in s 101M. None of those grounds engage questions arising under s 18(1A)(d) of the Act. By s 138(3)(b) the Court may revoke an innovation patent on the ground that the invention is not a patentable invention, which has the effect of engaging s 18(1A)(d) and thus the question of whether the invention is a patentable invention for the purposes of an innovation patent if the invention as claimed in any claim was or was not secretly used in the patent area before the priority date of the claim. This is the statutory mechanism by which the question of whether or not the invention, so far as claimed in any claim, was or was not secretly used.
100 As to the meaning of the term "secret" and the derivative term as an adverb, "secretly", the Oxford English Dictionary (online edition, accessed on 23 July 2020) attributes a number of meanings to the word "secret" as an adjective. At one level, the word means "kept from knowledge or observation; hidden, concealed". As a part of that meaning, the word has a predicative meaning in the sense of "to keep secret" and in that sense it means: "kept from public knowledge, or from the knowledge of persons specified; not allowed to be known, or only by selected persons". In the sense of a "secret place" it means "removed from the resort of men; retired, remote… secluded". In the sense of secret actions, negotiations or agreements, it means "done or entered into with the intention of being concealed; clandestine". In the sense of doctrines, signs, methods of procedure, it means "kept from the knowledge of the uninitiated". In the sense of feelings, passions or thoughts it means "not openly avowed or expressed; concealed, disguised; also, in stronger sense, known only to the subject, inward, inmost". In the sense of a committee or conclave, it means "conducted with secrecy; that keeps its deliberations unknown to the public". It can also mean "hidden from sight; not discernible or visible; unseen". As to a door, chamber drawer, passage or mechanical contrivance it means "designed to escape observation or detection". In the sense of an agent it means "works in secret". In the sense of a life, a secret life is "a private life of a nature concealed from the common observer".
101 As to the adverb "secretly", it means "in a secret manner, in secret, not openly; with a hidden meaning; indirectly".
102 I am satisfied that in s 18(1A)(d) the term "secretly used" means deliberately concealed consistent with the dominant understanding of the term "secret" and the derivative adverb "secretly". I am also satisfied that there is nothing in the provisions of the Act which suggests that there ought to be any other meaning attributed to those words than their ordinary meaning. This is especially true in circumstances where the question arises in the context of an application for an order to revoke the grant of a patent rather than questions arising in an opposition proceeding. I am not satisfied that the term "secretly used" draws its meaning from contextual phrases such as "the secrets of nature" or " the secrets of the universe" as suggesting a meaning of simply "unknown", rather than "deliberately concealed".
103 Thus as to a claim for revocation of a patent on the ground that the invention, as claimed, is not a patentable invention having regard to s 18(1A)(d), it seems clear enough that (a) there must be a "use" of the invention in the sense that the patentee has derived a commercial benefit by doing something with the invention (process or product) that produces the benefit; (b) that something, must engage use of the invention "as claimed" in the sense that the process or product used so as to produce a benefit must engage each of the essential features (or in later terms, integers as filed) of the invention; (c) the use of the invention as claimed in these senses, must engage deriving a commercial benefit from what was done before the priority date as an exercise of a de facto monopoly arising out of or "owing to" the patentee's conduct of concealing the essential features of the process or product before the priority date; and (d) the concealment must be an act of deliberate concealment. Those elements at (c) and (d), having regard to the authorities mentioned and the approach to statutory construction, are to be found within the statutory language "not secretly used" in the context of the explanation of the historical origin of the secret use ground which now finds expression in the Act in s 18(1)(d) and s 18(1A)(d) and the accepted approach to the attribution of meaning to statutory text.
104 The elements described at (a) and (b) above are requirements of the text of the sections in express terms rather than matters of attribution of meaning to text.
105 Thus, for the purposes of pleading the elements of a claim in reliance on s 18(1A)(d), it is necessary to plead material facts which, if made good, would prove each of the matters at (a) to (d) above.
106 Does the present pleading plead material facts which, if made good, establish a basis for a claim in reliance upon s 18(1A)(d) of the Act?
107 As to that, Mickala pleads that the invention, in so far as claimed, was used before the priority date by Southern Cross by causing the advertisement to be published in the AMSJ on or before 8 January 2012 coupled with the object, in placing the advertisement, of bringing about a sale of one or more lighting towers. The earliest priority date is 30 January 2013 and thus the advertisement was published approximately one year before the priority date. The advertisement extols the virtues or attractive features of the lighting tower product. It addresses questions such as "what do you need to consider?" and "what are the benefits of the extra low voltage lighting towers?". The advertisement is endorsed with the business address for Southern Cross, its phone number, facsimile number, website address and email address, a toll-free number and a separate website for "lighting towers" which seems to be a specific website for the product, apart from the Southern Cross website itself.
108 In this case, the advertisement is being asked to do a lot of work so far as the elements of a secret use claim are concerned. The advertisement is said to be the use of the invention and it is also said to be the expression of the commercial advantage obtained by the patentee by exercising a de facto monopoly before the priority date. The commercial advantage extracted by the patentee in the period before the priority date is said to stem from the advertisement itself. Mickala contends that an advertisement to sell a product ought to be treated logically in the same way as a sale (T, p 11, lns 23-24) assuming that the advertisement is characterised as an advertisement to sell. Mickala contends that the earlier the advertisement is placed, the greater the commercial benefit derived, because a patentee which advertises well before the priority date exposes itself to a greater level of sales and a better commercial outcome than would be the case had the patentee placed the advertisement after the priority date or a short time before the priority date. Mickala contends that, by placing the advertisement in an industry journal and bringing the virtues of the product (which is said to in fact embody all of the essential elements of the invention as claimed even though all such essential features may not be identified in the advertisement), to the attention of a cohort of companies engaged in aspects of mining and concerned about the safety of such operations, the patentee has obtained the commercial advantage of building interest in, and a reputation for, the product. More than that, however, Mickala contends that the placing of the advertisement before those who have an interest in knowing about such a product ought to be treated, analytically, as the same commercial benefit as making a sale (even though the product may not be delivered until after the priority date).
109 That seems to me to be where the contention breaks down for the purposes of a claim in reliance on s 18(1A)(d) of the Act. Although causing the advertisement to be placed in the AMSJ with the object in mind of bringing about a sale of the product might, arguably, as a matter of pleading, constitute use of the invention in one sense of the word, it can only constitute use if the patentee, before the priority date, has exercised a de facto monopoly so as to obtain or gather in a commercial advantage. If the limit of the proven fact at trial (as pleaded) is that the patentee placed the advertisement in the AMSJ a year before the priority date with the object of bringing about a sale of one or more lighting towers, those facts alone will not make good "use of the invention" in the sense that the authorities require, because placing the advertisement coupled with the pleaded object does not give rise to a commercial advantage derived by the patentee in the period before the priority date according to those authorities.
110 Mickala recognises the difficulty it faces in the limited way in which it has pleaded "use", by failing to identify as pleaded material facts the actual commercial benefit obtained by the patentee before the priority date in the exercise of a de facto monopoly. That is why Mickala seeks to equate, in oral submissions, the placing of the advertisement coupled with the object of bringing about sales, with a sale, in fact.
111 Mickala says that it is logically the same thing.
112 Placing an advertisement published some time before the priority date in an industry journal whose subscribers might be thought to have an interest in the patentee's product (the subject of the claims of the invention embodied in the product) is not the same thing as selling the product before the priority date as an exercise of a de facto monopoly in the product.
113 Mickala says that it wants to test the boundaries of what might constitute obtaining a commercial benefit before the priority date in the exercise of a de facto monopoly. It says that as there is no authority on the question of whether placing an advertisement, some significant time before the priority date with the object of making a sale of a product, confers commercial advantage on the patentee, so as to constitute use in the relevant sense, the pleading as presently limited to the material facts reflected in the proposed amendment is sufficient, it is said, to establish use, should the court at trial, having regard to the evidence adduced as framed by the pleading, conclude that the patentee by placing the advertisement coupled with the pleaded object, obtained, by those facts, a commercial benefit.
114 The only benefit Southern Cross could have obtained would be a sale of a lighting tower by reference to the advertisement published before the priority date. Mickala equates placing the advertisement with making a sale. The case for commercial benefit is put orally by Mickala on the footing that Southern Cross was able to make sales after the priority date (because it does not seem to be suggested that Southern Cross made sales before the priority date) sooner than it would have made those sales, had the advertisements been placed on or after the priority date.
115 That conception of the commercial benefit is not pleaded.
116 The proposed amended pleading ought to identify, with precision, the commercial benefit said to have been obtained by Southern Cross, before the priority date, as an exercise of a de facto monopoly in the product. If it is to be said, as a matter of commercial benefit, that Southern Cross made sales by accepting offers to purchase one or more lighting towers in the period between 8 January 2012 and 30 January 2013, notwithstanding that supply of the product may have occurred after 30 January 2013, that matter needs to be pleaded.
117 Apart from these matters, Mickala needs to plead material facts which, if made good, prove that Southern Cross used the invention as claimed "secretly".
118 If the contention is, as it seems to be, that Southern Cross placed the advertisement for its product, the subject matter of which is a product that embodies all of the essential features of the invention as claimed, but disclosed only some of those features, holding others back (that is concealing others) to prevent disclosure and extract the pleaded commercial advantage (when pleaded, or indeed as presently framed), the conduct of deliberate concealment must be pleaded.
119 The remaining difficulty identified by Southern Cross is the notion that secret use and its inherent quality of concealment is mutually exclusive of public use. If the patentee has descended into the public arena and, by the advertisement, entered the forum of an industry group, without any express constraints of any kind (said at one level to be so devoid of limitations as to constitute novelty-destroying publication in the invention), a question arises as to whether the statutory concept of an invention, so far as claimed, not being secretly used, is engaged at all.
120 For present pleading purposes, I accept that a claim of using an invention as claimed, before the priority date, so as to obtain or extract a commercial benefit from the exercise of a de facto monopoly (as those concepts are understood according to the authorities), might be capable of being pleaded where a step was taken engaging a public act, but where concealment of essential features from that public act also occurred.
121 Having regard to all of these considerations, the application for leave to amend the statement of cross-claim in relation to para 5(a)(vii) concerning the demonstration by Mr Torok, and para 5(d) concerning secret use, is refused. It may be that Mickala is capable of framing a claim in reliance upon s 18(1A)(d) of the Act having regard to the observations in these reasons. If Mickala is capable of framing such a claim having regard to these reasons, it ought to formulate the proposed pleading of such a claim within fourteen days and give notice of the proposed pleading to Southern Cross. If such a pleading can properly be framed, the parties may reach agreement about the pleading. If not, and Mickala takes the view that it can frame an appropriate pleading, an application might be made about that matter.
122 As to the question of the costs of the application to amend the statement of cross-claim, the parties are directed to file and serve submissions as to costs limited in each case to five pages, within seven days.
I certify that the preceding one hundred and twenty-two (122) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood.