Patent Gesellschaft AG v Saudi Livestock Transport and Trading Company [1997] FCA 95 (18 February 1997)

CATCHWORDS

INTELLECTUAL PROPERTY - Patents - For ship constructed by conversion of oil tanker to one for transport of livestock, comprising a decked hull enclosing storage tanks, a multi-storeyed superstructure above deck including a plurality of animal confinement pens in each storey; livestock food and water conveyor means extending from storage tanks to the pens whereby food and water can be conveyed directly from the tanks to each confinement pen - Specifications - Insufficient description of conveyor means - Claims not fairly based on specifications - Inventive step constituted by combination of known integers.

Patents Act 1990

NV Philips Gloeilampenfavrieken v Mirabella International Pty Ltd [1993] FCA 404; (1993) 44 FCR 239

CCom Pty Ltd v Jiejing Pty Ltd [1994] FCA 1168; (1994) 51 FCR 260

Olin Corporation v Super Cartridge Co Pty Ltd [1977] HCA 23; (1977) 180 CLR 236

Société des Usines Chimiques Rhône-Poulenc v Commissioner of Patents [1958] HCA 27; (1958) 100 CLR 5

The Mond Nickel Co Ltd's Application [1965] RPC 189

Imperial Chemical Industries Ltd's application [1960] RPC 223

Coopers Animal Health Australia Ltd v Western Stock Distributors Pty Ltd (1986) 67 ALR 390, affirmed (1987) 76 ALR 429

F. Hoffman-La Roche & Co A.G. v Commissioner of Patents [1971] HCA 3; (1971) 123 CLR 529

Rehm Pty Ltd v Websters Security Systems (International) Pty Ltd (1988) 11 IPR 289

Leonardis v Sartas No. 1 Pty Ltd (unreported, Full Court, 13 June 1996 Judgment No. 449 of 1996)

Edison & Swan Electric Light co v Holland (1889) 6 RPC 243

Samuel Taylor Pty Ltd v S.A. Brush Co Ltd [1950] HCA 44; (1950) 83 CLR 617

AMP Inc v Utilux Pty Ltd (1971) 45 ALJR 123

Valensi v British Radio Corporation Ltd [1973] RPC 337

Italiano v Babaro [1993] FCA 241; (1993) 40 FCR 303

Svendsen Inc v Independent Products Canada Ltd [1968] HCA 65; (1968) 119 CLR 156

RAIA Insurance Brokers Ltd v FAI General Insurance Co Ltd [1993] FCA 92; (1993) 41 FCR 164

Teoh v Minister for Immigration & Ethnic Affairs [1994] FCA 1017; (1994) 49 FCR 409

Water Board v Moustakas [1988] HCA 12; (1988) 62 ALJR 209

Ramset Fasteners (Aust) Pty Ltd v Advance Building Systems Pty Ltd (1996) 34 IPR 256

R D Werner & Co v Bailey Aluminium Products Pty Ltd (1989) 25 FCR 565

Patent Gesellschaft AG v Saudi Livestock Transport & Trading Company

(No.VG 169 of 1996)

Coram: Jenkinson, Carr and Sackville JJ

Date: 18 February 1997

Place: Melbourne

IN THE FEDERAL COURT OF AUSTRALIA )

)

VICTORIA DISTRICT REGISTRY ) No. VG 169 of 1996

)

GENERAL DIVISION )

On appeal from a judge of the Federal Court of Australia

B E T W E E N: PATENT GESELLSCHAFT AG

Appellant

A N D : SAUDI LIVESTOCK TRANSPORT AND TRADING COMPANY

Respondent

CORAM: Jenkinson, Carr and Sackville JJ

DATE: 18 February 1997

PLACE: Melbourne

MINUTES OF ORDER

The Court Orders That:

1. The appeal be dismissed.

2. The respondent's costs of the appeal be paid by the appellant.

3. The cross-appeal be dismissed.

4. The appellant's costs of the cross-appeal be paid by the respondent.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules

IN THE FEDERAL COURT OF AUSTRALIA )

)

VICTORIA DISTRICT REGISTRY ) No. VG 169 of 1996

)

GENERAL DIVISION )

On appeal from a judge of the Federal Court of Australia

B E T W E E N: PATENT GESELLSCHAFT AG

Appellant

A N D : SAUDI LIVESTOCK TRANSPORT AND TRADING COMPANY

Respondent

CORAM: Jenkinson, Carr and Sackville JJ

DATE: 18 February 1997

PLACE: Melbourne

REASONS FOR JUDGMENT

JENKINSON J:

I agree in the orders proposed by Carr J, for the reasons his Honour states.

I certify that this page is a true copy of the reasons for judgment of the Honourable Justice Jenkinson.

Dated:

Associate

IN THE FEDERAL COURT OF AUSTRALIA )

VICTORIA DISTRICT REGISTRY ) No. VG 169 of 1996

GENERAL DIVISION )

On appeal from a judge of the Federal Court of Australia

BETWEEN: PATENT GESELLSCHAFT AG

Appellant

AND: SAUDI LIVESTOCK TRANSPORT AND

TRADING COMPANY

Respondent

CORAM: Jenkinson, Carr and Sackville JJ.

PLACE: Melbourne

DATE: 18 February 1997

REASONS FOR JUDGMENT

Introduction

CARR J:

This is an appeal and cross-appeal from orders made by a judge of the Court, Olney J, in proceedings for infringement of patent brought by the appellant, Patent Gesellschaft AG ("PG"). PG is the registered proprietor of Australian letters patent No 500194, for an invention entitled "A long distance livestock carrier" ("the Patent"). The invention relates to an ocean-going ship constructed by conversion of an oil tanker to one for transport of a main cargo of livestock.

The Patent was granted to Mr Christian Kjellerup Hansen by letters patent sealed on 20 March 1980. It was granted on a Convention application, the basic application having been filed in Denmark on 28 November 1975. The term of the Patent was for sixteen years. The Patent was assigned to PG on 9 August 1990.

On 19 November 1992 PG filed an application in this Court seeking relief in respect of the alleged infringement of the Patent by the respondent on 37 occasions between 23 June 1986 and 30 June 1992. To the extent that relief was sought in respect of three alleged infringements which occurred before 19 November 1986 the claim is statute-barred. PG's case against the respondent was that it had infringed the Patent by causing the ship "Mawashi al Gasseem" to enter into Australia and berth at certain identified Australian ports and there to load livestock, in particular sheep, and then to carry such livestock in and from Australia.

The respondent admitted being the owner of the "Mawashi al Gasseem" at all relevant times, but denied having infringed the Patent. The respondent cross-claimed against PG for a declaration that the Patent and each of the claims in its specification were, at all times, invalid.

Orders were made that the questions of infringement and validity be heard separately from the issue of the relief sought by PG. Olney J. published his reasons for judgment in respect of those matters on 21 February 1996. His Honour found that claims 1 and 2 of the Patent were not fairly based upon the specification and that the specification did not describe the invention fully. It followed that the requirements of s.40(3) and (2)(a), respectively, of the Patents Act 1990 (Cth) ("the Act") had not been met and that the Patent was invalid and should be revoked.

Although these findings were enough to resolve the proceedings, the trial Judge dealt with a number of other issues. His Honour found that the claimed invention involved an inventive step, because several of its integers interacted in combination with each other to produce a new product. His Honour also found that Mr Hansen was the inventor and that the Patent was fairly based on the basic Danish application. However, so his Honour found, the invention lacked utility by not providing for mechanical ventilation of the livestock confinement pens in order to deliver a substantial part of the cargo alive. Finally, his Honour found that, had the provisions of s.40 of the Act been satisfied and had the invention been useful, then the respondent would have infringed claim 1 of the Patent.

At the time when his Honour published his reasons, no orders were made. The matter was stood over until 29 February 1996 to give the parties an opportunity to consider the reasons and to make submissions as to the appropriate form of orders including the question of costs. Following submissions from counsel, his Honour reserved the matter for further consideration. On 18 March 1996, his Honour ordered that the application be dismissed, declared that the Patent and each of the claims thereof was at all material times invalid and ordered each party to pay its own costs.

By its notice of appeal, PG challenges the learned trial judge's finding that the Patent was invalid. The challenge extends to each of the three grounds upon which that conclusion was reached, namely the absence of fair basing, sufficiency of description and utility respectively. The respondent has filed a notice of contention putting forward five further bases upon which the Patent should have been held to be invalid and a contention that his Honour erred in finding that the system on the "Mawashi al Gasseem" infringed the Patent. The respondent has also cross-appealed against the costs order.

Background to the Patent

Two then prevalent international situations, each involving a serious economic problem, were described in the complete specification as forming the background of the invention. The first problem was to bridge the gap between the capacity to supply and the unsatisfied demand for livestock, more particularly what was said to be the situation resulting from the huge over-production of sheep in Australia and the very large demand for live sheep in the Middle East, especially Iran. The second problem arose out of the fact that, at that time (November 1975), an ever-increasing tonnage of oil tankers had become unprofitable and were lying idle. This created the opportunity to utilise surplus tanker capacity for the livestock trade.

The claims made in the specification defining the invention were as follows:

"(1) An ocean-going ship constructed by conversion of an oil tanker vessel to one for transport of a main cargo of livestock, said vessel comprising a decked hull enclosing a plurality of bulk storage tanks occupying a major proportion of the hull volume; a multi-storeyed superstructure standing up from the deck of the hull and including a plurality of animal confinement pens in each storey; livestock food conveyor means extending from one or more of said storage tanks to said livestock confinement pens whereby livestock food can be bulk stored in said one or more storage containers and conveyed directly therefrom to each of said confinement pens by said food conveyor means; and livestock water conveyor means extending from another or others of such storage tanks to said livestock confinement pens whereby water can be bulk stored in said another or others of said storage tanks and delivered directly therefrom to each of said confinement pens by said water conveyor means.

(2) An ocean-going ship as claimed in claim 1, wherein the food conveyor means and the water conveyor means are comprised of separate pipelines interconnecting the respective storage tanks with said confinement pens and means operable to cause food and water to be conveyed through the respective pipelines to said confinement pens.

(3) An ocean-going ship as claimed in claim 1 or claim 2, wherein said superstructure defines access corridors extending between adjacent rows of pens, each of said corridors extending upwardly through two storeys of the superstructure so as to provide for accessibility to two rows of pens at each side of the corridor.

(4) An ocean-going ship substantially as hereinbefore described with reference to the accompanying drawings."

It was common ground that claim 1 was a combination claim.

The Legislation

Although the Patent was granted under the Patents Act 1952 (Cth) which was repealed by s.230 of the Act, it was common ground that there was no material difference in the wording of the provisions relevant to the available grounds of revocation in the 1952 Act and the 1990 Act. In these circumstances, the effect of s.233 of the Act is that that Act (and not the 1952 Act) applies to the Patent: NV Philips Gloeilampenfavrieken v Mirabella International Pty Ltd [1993] FCA 404; (1993) 44 FCR 239, at pp.253-254. The grounds which remain material to the present matter are found in s.138(3)(b) and (f) of the Act respectively i.e. that:

. the invention is not a patentable invention;

. the specification does not comply with s.40(2) or (3) of the Act.

Section 40 of the Act relevantly provides:

"Specifications

40.(1) ...

(2) A complete specification must:

(a) describe the invention fully, including the best method known to the applicant of performing the invention; and

(b) where it relates to an application for a standard patent - end with a claim or claims defining the invention; and

(c) ...

(3) The claim or claims must be clear and succinct and fairly based on the matter described in the specification."

The Judgment at First Instance

His Honour's Findings on Whether the Claimed Invention Was A Patentable Invention

His Honour found that the idea conceived by Mr Hansen, expressed in claims 1, 2 and 3 of the Patent involved a combination of:

. the conversion of an oil tanker with a large deck space and substantial below deck storage capacity;

. the erection of an entirely above deck sheephouse;

. the storage of livestock feed and water in the below deck tanks; and

. the supplying of livestock feed and water directly from the storage tanks to the confinement pens.

The judgment is reported at (1996) 33 IPR 426 and the page references below are to that report. His Honour's conclusions were expressed in the following terms [at p.457]:

"Oil tankers had previously been converted to other uses, but never as livestock carriers; above deck sheephouses had previously been used on livestock carriers but only on vessels which also had below deck livestock accommodation; livestock feed had previously been stored below deck but not in tanks; food conveyor systems of varying types were used on all livestock vessels but none had previously involved the supplying of feed directly from the bulk storage tank to the individual confinement pens. Each of these several developments taken in isolation could well be regarded as obvious steps in the evolution of those individual aspects of the art but the combination of the several integers interacted with each other to produce a new product namely an ocean-going vessel capable of transporting very large numbers of sheep over long distances. In my opinion the claimed invention does involve an inventive step."

The findings in this passage are also of some importance in relation to other issues in the case.

His Honour's Findings on Whether the Specification Described the Invention Fully and Whether the Claims Were Fairly Based on the Matter Described in the Specification

His Honour addressed the issues of full description and fair basing together but principally by considering whether claims 1 and 2 were fairly based on the matter described in the specification. In deciding both issues against PG, his Honour focused on the method of supplying food to the pens in which the sheep were to be confined. This was the matter upon which the respondent had placed most emphasis. In short, the question his Honour decided was whether the specification fully described a means whereby the food was "... conveyed directly [from the storage containers] to each of the said confinement pens" (as claimed in claims 1 and 2). His Honour referred to the text of those two claims and some of the description in the specification. His Honour noted that claims 1 and 2 contemplated the livestock food being stored in below deck tanks and conveyed directly therefrom to each of the confinement pens (in a method described in claim 2 as being via pipelines inter-connecting the below deck storage tanks to the confinement pens). His Honour contrasted those claims with the description in the specification of a method of delivery whereby the food was conveyed from the storage tanks below deck to dispensing containers situated on each storey of the sheephouse structure (emphasis added). The relevant portion of the specification relied upon by his Honour (amended to correct two typographical errors in accordance with the common understanding of the parties) was as follows:

"The supply of food and water from the storage tanks to the pens and the removal of manure from the pens can be effected by a/any convenient conveyor means. By way of example there is schematically shown in fig 3 a dispensing container 22 communicating with a conduit within a hollow 11d in a pneumatic conveyor system for supplying food pellets from a storage tank to the dispensing container. There may be one or more such containers in each storey for supplying a suitable number of pens. Similarly, there may be water taps 21 communicating with water conduits within the hollow posts 11c for supplying drinking water from water tanks to the pens."

Figure 3, referred to in this passage, is reproduced below:

His Honour held (at p.455) that, as a matter of construction, "... the patent contemplates that the food would be conveyed from the storage tank to each confinement pen in an uninterrupted stream without the involvement of any intervening agency." Earlier in this portion of his judgment (at pp.454-455) his Honour found:

"The specification provides no clue as to the method of supplying food from the dispensing containers to the confinement pens. According to the evidence, the only known method of supplying food to the confinement pens as at the claimed priority date was by means of wheelbarrows or hand-held buckets. If it is assumed that the specification contemplates that food would be supplied from the dispensing containers to the confinement pens by the only then known means of conveyance, i.e. by wheelbarrow or hand held bucket, then the question arises as to whether the conveyance means so described is a means of conveying feed directly from the below deck storage containers to the confinement pens (claim 1) and whether such means involves the conveyance of food through pipelines interconnecting the below deck storage tank and the confinement pens (claim 2)."

His Honour then (at p.455-456) concluded:

"A system of food conveyance which involves the transfer of food from the storage tanks below deck to dispensing containers on each storey of the sheephouse and further contemplates the further distribution of food from the storage tanks to the confinement pens by some unspecified means but presumably by the drawing off of food from the dispensing containers into a wheelbarrow or bucket or some other conveyance for distribution to the confinement pens is not in my opinion a means of conveying the food from the below deck storage containers directly to the confinement pens. Nor is it a means whereby food is conveyed to the confinement pens through a pipeline interconnecting the storage tanks and the confinement pens.

Having regard to the foregoing, claims 1 and 2 of the patent in suit are not fairly based upon the specification nor is it the case that the specification describes the invention fully. In the circumstances I have reached the conclusion that the statutory requirements have not been met and that the patent is invalid and should be revoked."

His Honour's Findings on Whether the Invention Lacked Utility

In its particulars of objection at first instance, and in its notice of contention on appeal, the respondent complained that the specification did not fully describe the method of ventilating the multi-storeyed superstructure, because it failed to refer to the need for mechanical ventilation. This was one of numerous particulars given of alleged non-compliance with s.40(2)(a) of the Act. In its submissions, but not in its pleadings, the respondent went further and contended that because of such failure, the invention claimed lacked utility. The essence of the respondent's submissions on the latter point (utility) at first instance was that the invention lacked utility because it did not provide sufficiently for the ventilation of the livestock pens to ensure the survival of the stock to the point of destination. The respondent argued that the object of transporting livestock is to have live stock (and not dead stock) at the point of destination.

In his reasons for judgment, his Honour dealt with the failure to refer in the specification to the need for mechanical ventilation in the context of considering the respondent's contention on the matter of utility, but did not consider the application of s.40(2)(a) in those circumstances. His Honour referred to a passage at p.6 of the specification which reads:

"The side walls of the pens 14 may be made of grids 23 as shown schematically in fig 3 so as to provide for [in the reasons for judgment the word "for" was omitted, a matter upon which the appellant relies] adequate flow through ventilation."

His Honour also referred to a sentence at p.3 in the basic Danish application which reads:

"The features defined in claim 4 obviate the need for artificial ventilation."

His Honour then referred to claim 3 of the Patent and the drawings incorporated by claim 4 (showing a superstructure comprising 10 storeys of sheep pens in 5 blocks) and (at p.459) concluded:

"The evidence establishes that such a superstructure if used for the carriage of sheep over long distances particularly in the contemplated trade between Australia and the Middle East would require mechanical ventilation to be provided to the confinement pens if the object of delivering a substantial part of the cargo alive is to be achieved. In the invention described such flow through ventilation as may be available is not adequate to achieve the stated purpose of the invention namely to facilitate the long distance transportation of large numbers of livestock and for that reason I am of the opinion that it lacks utility."

His Honour's Finding on Whether (Assuming Validity) there was Infringement

As his Honour said, this question was posed in a context which assumed the validity of the Patent i.e. that contrary to his Honour's findings, the provisions of s.40 of the Act were satisfied and the invention was useful. On that assumption, his Honour found that the feed conveyance method on the "Mawashi al Gasseem" delivered feed directly to the confinement pens and thus infringed claim 1 of the Patent.

The Issues Raised by the Notice of Appeal

A. Fair Basis (Grounds 1 to 3)

B. Sufficiency of Description (Grounds 4-7)

It was common ground that the test of fair basis is whether the body of the specification provides a real and reasonably clear disclosure of the invention claimed. The origins of the phrase "fairly based", as used in s.40(3) of the Act, are explored in the judgment of the court in CCom Pty Ltd v. Jiejing Pty Ltd [1994] FCA 1168; (1994) 51 FCR 260, at pp.275ff. The rationale for fair basing, as explained in cases such as Olin Corporation v. Super Cartridge Co Pty Ltd [1977] HCA 23; (1977) 180 CLR 236 (at pp.240, 250-251, 263) is that the consideration given by the patentee for the monopoly granted in respect of a valid product claim is sufficient disclosure in the specification to enable the skilled addressee to make the product, once the term of the patent has expired.

This test appears to be well accepted in the contexts of (a) whether a complete specification is fairly based on matter disclosed in a provisional specification or (b) whether a complete specification is fairly based on matters disclosed in a basic application made in a Convention country: CCoM Pty Ltd v. Jiejing Pty Ltd [1994] FCA 1168; (1994) 51 FCR 260 at pp.281-282; Société des Usines Chimiques Rhône-Poulenc v. Commissioner of Patents [1958] HCA 27; (1958) 100 CLR 5; The Mond Nickel Co Ltd's Application [1956] RPC 189 at p.194; Imperial Chemical Industries Ltd's Application [1960] RPC 223 at p.228; Coopers Animal Health Australia Ltd v. Western Stock Distributors Pty Ltd (1986) 67 ALR 390, affirmed (1987) 76 ALR 429; F. Hoffman-La Roche & Co A.G. v. Commissioner of Patents [1971] HCA 3; (1971) 123 CLR 529 at pp.538-9.

In Rehm Pty Ltd v. Websters Security Systems (International) Pty Ltd (1988) 11 IPR 289 at pp.302-303, Gummow J accepted that the characteristic of "a real and reasonably clear disclosure" is the relevant characteristic for determining whether a claim is "fairly based" upon the body of a complete specification (i.e. a comparison within the one document). His Honour observed that this question may not be altogether analogous to questions of fair basing of claims upon earlier documents, such as a provisional specification or basic application. Nonetheless, he adopted the criterion applied to claims based on earlier documents as providing a guide to the approach that should be taken in dealing with what is now s.40(3) of the Act. The question to be asked had been put this way (p.303):

"More succinctly, Mr Blanco White QC would ask whether 'the idea' of the invention claimed in the claim in question was to be found in the body of the specification: Patents for Inventions, 4th ed, SS2- 111."

In Leonardis v. Sartas No. 1 Pty Ltd (unreported, Full Court, 13 June 1996 Judgment No. 449 of 1996) the Full Court of this Court (at p.25) drew attention to the presence of the definite article in the expression "the matter described in the specification" in s.40(3) and contrasted its absence in Reg. 3.12(1)(b) and (c) [which prescribe priority dates in the first two contexts mentioned above], without deciding the precise effect of the inclusion of that definite article. I propose to leave that question for another day, and to follow the approach taken by Gummow J in Rehm.

The specification contains a full description if it makes the nature of the invention plain to persons having reasonably competent knowledge of the subject and also makes it plain, to persons having reasonable skill, how to perform the invention: Edison & Swan Electric Light Co v. Holland (1889) 6 RPC 243 at p.279; Samuel Taylor Pty Ltd v. S.A. Brush Co Ltd [1950] HCA 44; (1950) 83 CLR 617 at pp.624- 625. See also AMP Inc v. Utilux Pty Ltd [1971] 45 ALJR 123 at p.128 and Valensi v. British Radio Corporation Ltd [1973] RPC 337 at p.377.

Mr R.C.Macaw QC, who (with Mr B.J.Hess) appeared for PG, submitted that there was a real and reasonably clear disclosure in the specification of the "direct conveyance feature" in the consistory clause, the description, the statement and the example in the specification.

The relevant part of the consistory clause reads (at p.2a):

"... livestock food conveyor means extending from one or more of said storage tanks to said livestock confinement pens whereby livestock food can be bulk stored in said one or more storage containers and conveyed directly therefrom to each of said confinement pens by said food conveyor means; ...".

We were referred to the following passages in the description:

"Preferably, the food conveyor means and the water conveyor means are comprised of separate pipelines interconnecting the respective storage tanks with the said confinement pens and means operable to cause food and water to be conveyed through the respective pipelines to said confinement pens.

...

Therefore, means must be provided for converting the selected oil tanks into storage tanks, including the provision of connecting the storage tanks with the conduits leading to the pens and disconnecting the storage tanks from the remaining oil tanks."

PG also relied on the passages in the statement and the example which I have set out above (at p.7).

PG contended that the learned trial judge erred in finding that the specification did not fully describe the direct conveyance feature of the claims and therefore did not fully describe the invention claimed. It submitted that there was sufficient in the specification in relation to the direct conveyance feature to enable a skilled addressee to discern and implement the invention, including that feature. Mr Macaw referred to evidence, which he said his Honour had failed to take into account, to the effect that a skilled addressee would in fact have no difficulty providing the direct conveyance feature of the claimed invention. In particular, PG relied upon evidence which, so it was said, showed that a skilled addressee would have no difficulty in providing this feature, by means of pipelines inter-connecting the storage tanks with the confinement pens and means operable to cause food to be conveyed through the pipelines to the confinement pens (a reference to pages 2a and 3 of the specification).

In summary, the appellant's submissions were as follows:

. it is permissible to give general instructions, leaving it to the skilled addressee to work out the means of putting the invention into effect provided that the specification is adequate for that to be done without the exercise of inventive ingenuity;

. the learned trial judge based his finding upon a conclusion that the example contemplated the use of wheelbarrows or buckets being (as his Honour found on the evidence) the only known method of supplying food to the confinement pens as at the priority date (28 November 1975);

. the instruction in the statement set out above that the direct conveyance "... can be effected by any convenient conveyor means" (emphasis added) did not permit the use of wheelbarrows or buckets. The ordinary meaning of the word "conveyor" requires conveyance by mechanical means;

. there was ample evidence that skilled addressees could supply such conveyor means to deliver food directly to the confinement pens;

. the example was consistent with the direct conveyance feature for the livestock food - for instance by gravity feeding from the storage tanks through a "Christmas tree" pipeline distribution system to individual livestock pens;

. the use of the word "similarly" in the description of the water distribution system (found by his Honour to be a direct distribution system) supported the proposition that the exemplified food distribution system was a direct one; and

. although there was no need for the exemplified system to support the direct conveyance feature, where the other support for that feature existed, the exemplified system may itself be read as supporting that feature.

Mr Macaw referred us to passages in the evidence of Messrs Colquhoun and Fleck (experts called by the appellant) and Messrs Grool, Raymond, Benschop and Rasmussen (expert witnesses called by the respondent). As I understand it, the purpose of doing this was to demonstrate what was described as his Honour's "erroneous approach" to the finding of fact that, according to the evidence, the only known method of supplying food to the confinement pens as at 28 November 1975 was by the use of wheelbarrows or buckets. Furthermore, so it was put, this was evidence that the skilled addressees could as at 28 November 1975, supply such conveyor means to deliver food directly to the confinement pens.

On the other hand, Mr D.Shavin QC, who (with Mr A.J. Ryan) appeared for the respondent, relied on his Honour's finding of fact (at pp.454- 455) that:

"[a]ccording to the evidence, the only known method of supplying food to the confinement pens as at the claimed priority date was by means of wheelbarrows or hand-held buckets"

Mr Shavin submitted that this finding was "clearly well founded ... nearly invulnerable ... and should not be disturbed." We were reminded that the trial judge had the benefit of watching extensive cross- examination and assessing the evidence of each witness on the question whether other methods of supplying food to the confinement pens were known at the claimed priority date. The reference to "nearly invulnerable" comes from the decision of the Full Court of this Court (reflecting well-established principles) in Italiano v. Babaro [1993] FCA 241; (1993) 40 FCR 303 at p.326.

In any event, the respondent contended that the evidence upon which the appellant relied comprised carefully selected extracts from persons who were not appropriate addressees. Furthermore, the respondent contended that the learned trial judge had (at p.429) rejected the appellant's expert evidence as lacking objectivity and (at pp.432-433) had clearly accepted the evidence and expertise of Mr Benschop, who his Honour described as "... a consulting engineer who has had extensive experience in the field" [of shipboard feeding systems].

I have read those parts of the evidence (both transcript of oral evidence and affidavit evidence) upon which the appellant relies for its submissions, the further passages upon which the respondent relies as setting that evidence in context and the still further evidence to which the respondent took us as bearing on the factual questions. By the factual questions I mean whether the only known method of supplying food to the confinement pens (as at 28 November 1975) was by means of wheelbarrows or hand held buckets, and whether the skilled addressee could, as at 28 November 1975, have put the invention into effect without the exercise of inventive ingenuity or an impermissible degree of difficulty.

It seems to me that the learned trial judge did not fall into error in making the critical findings relating to sufficient disclosure and fair basing. The appellant attacked those findings by referring us to the evidence of the various expert witnesses whom I have identified above. I do not consider that the attack was a successful one. It is quite clear from the context of his Honour's first finding (taking account of the two sentences which preceded it and the sentence immediately after it) that the relevant supply of food was from the dispensing containers on each storey of the sheephouse to the confinement pens. His Honour's reasons for judgment must, of course, be read as a whole. At p.457, in the context of expressing his reasons for concluding that the claimed invention was patentable as a combination of integers, his Honour found as a fact that:

"... food conveyor systems of varying types were used on all livestock vessels but none had previously involved the supplying of feed directly from the bulk storage tank to the individual confinement pens."

Mr Macaw submitted that there was much more known within the discourse of the relevant universe about this aspect than had been known in the sense of being used on livestock carriers. It was submitted that the latter should not circumscribe the former. One can readily accept that proposition, if there had been a finding that in the discourse of the relevant universe it was known how to supply food from the dispensing containers on each storey of the sheephouse to the confinement pens, even if such a method had not then been used on livestock carriers. However, in my view, it was clearly open on the evidence for his Honour to find that the only known method of supplying food to the pens from the dispensing containers was by wheelbarrows or by hand. It was also open to his Honour to find that a skilled addressee could not devise a system of direct conveyance of food from the storage tanks to the pens without impermissible difficulty.

With the possible exception of Mr Rasmussen, the witnesses on both sides were agreed that the next development after the bucket and wheelbarrow distribution stage, i.e. the "multiple splinter drop spout" or "Christmas tree" system, was not in use on ships in Australia until after November 1975. His Honour so found (see p.433). Mr Rasmussen (in paragraph 15 of his affidavit) refers to a pellet distribution system on the "Al Khaleej", a vessel which he swore had visited Australia before 28 November 1975. However, the system which Mr Rasmussen there describes ends at the various sheep decks, not at the confinement pens. Furthermore, Mr Rasmussen's evidence (albeit on another matter) was rejected by his Honour as "unconvincing". So far as knowledge existing in the discourse of the relevant universe of an as yet unused method, his Honour was, in my opinion entitled to accept the evidence of, for example, Mr Benschop that in 1975 he would have had "great difficulty" in devising such a conveyance system and that there was no known system working at that time. Mr Benschop stressed (see page 488 of the transcript) that the problem was how to convey the feed on a ship. His Honour was also entitled to accept the evidence of Mr Grool. His evidence was that there were means available of conveying food pallets from storage tanks directly to the pens, at least as at 1981, but that the means of which he was aware would have encountered such serious problems (including causing disease to the livestock) that they would have been useless.

The appellant's contention requires us to make a choice between the evidence to which counsel for the appellant took us and the evidence which his Honour chose to accept and, in particular, the evidence of Mr Benschop. It was clearly for the trial judge to decide which expert witnesses he could safely accept as giving reliable evidence. He did so. He criticised the applicant's experts (and gave a striking example of why he did so - the hollow lid example) and I do not consider that it is permissible to interfere with his factual findings.

If I am wrong in my assessment that the learned primary judge sufficiently expressed the basis for his conclusion as being that he chose to prefer the body of evidence adduced by the respondent on this matter, to the appellant's body of evidence, I consider that it is obvious enough that he did so. It is true that there is no express finding of fact in his Honour's reasons that, as at 25 November 1975, a skilled addressee could not have put the invention into effect without the exercise of inventive ingenuity or an impermissible degree of difficulty. However, his Honour cited (at p.453) the relevant authorities upon both fair basing and sufficient description including four of the most important decisions on these matters in the High Court of Australia, namely Svendsen Inc v. Independent Products Canada Ltd [1968] HCA 65; (1968) 119 CLR 156; Samuel Taylor, AMP Inc, and Olin Corp. It is permissible to make inferences about a trial judge's reasoning process by reference to the authorities relied upon by him - see RAIA Insurance Brokers Ltd v. FAI General Insurance Co Ltd [1993] FCA 92; (1993) 41 FCR 164 at p.179. Mr Benschop's evidence (which I have summarised above) was squarely in point and the necessary implication from his Honour's factual conclusion must be that he accepted that evidence.

There was criticism of his Honour's reasons in respect of the matter of food conveyance when contrasted with his conclusions in relation to water conveyance. A close examination of his Honour's reasons (at p.456) discloses that there is no inconsistency of approach. His Honour was well aware of the point being made about the use of the word "similarly" in the specification. However, his Honour noted that there was no reference in the specification to any equivalent to the dispensing containers (on each deck) in relation to the water distribution systems. No such tanks were shown in the illustration. From that his Honour concluded that (unlike the example shown in respect of food conveyance) the drawings illustrated a water conveyance system between the below deck storage tanks and the pens without the intervention of any intermediate dispensing container.

There was also some criticism of his Honour's focus on the use of wheelbarrows or hand-held buckets as the means of conveying food from the dispensing containers on each deck and the pens. It is quite clear that his Honour regarded this stage of the conveyance of food as being of crucial importance, as of course it was. He referred (at p.456) to the distribution of food from the storage to the confinement pens

"by some unspecified means but presumably by drawing off food from the dispensing containers into a wheelbarrow or bucket or some other conveyance". (Emphasis added.)

This led to his conclusion that claims 1 and 2 were not fairly based. His Honour's conclusions were therefore not based exclusively on an assumption that wheelbarrows and buckets would have to be involved.

In my view, these grounds of appeal are not made out. This conclusion is sufficient to dismiss the appeal.

C. Utility (Grounds 8-12)

In its grounds of appeal PG attacked his Honour's finding on the question of utility on the basis, amongst other things, that this point was not pleaded by the respondent.

At the hearing of the appeal, the respondent sought leave to amend its particulars to include the issue of utility. The respondent relied on the fact that, at the trial, full submissions were heard on the questions arising from PG's failure to refer in the specification to the need for mechanical ventilation and evidence was led by PG which was tested in cross-examination. Senior counsel for the respondent contended that the issue of utility was, in substance, included as an issue by the objection based on absence of full description. In these circumstances, so it was put, no injustice would flow from leave to amend being granted to enable the pleadings to accord with the findings of the trial judge: Teoh v. Minister for Immigration & Ethnic Affairs [1994] FCA 1017; (1994) 49 FCR 409 at pp.411, 416-7 and 428. PG, in opposing the application to amend, contended that its case might have been conducted differently if inutility had been alleged as part of this ground of objection. Senior counsel for PG submitted that in those circumstances, evidence may have been adduced by PG at the trial to show, for example, that a livestock carrier without mechanical ventilation would indeed achieve the object said to constitute the implied promise of delivery of a substantial part of the cargo alive. We refused leave to amend.

It is clear from the transcript of the trial (pages 979 and 980) that on two occasions during the course of final addresses, senior counsel for the appellant made the point that the issue of utility was outside the pleading and could not be raised. The respondent did not apply to amend its pleadings. Counsel for the respondent sought to rely on the fact that a submission was made in the alternative, on behalf of PG, that in any event the allegation of utility was not supported by any evidence.

In my view, there is merit in the submission made on behalf of PG that although the two issues are related, they are different. In the present matter, the finding of inutility was predicated on the finding of an implied promise in the specification that a substantial part of the cargo would be delivered alive. The issue of whether the specification described the invention fully, turned (at this stage speaking broadly) on whether there were adequate directions in the specification for a person wishing to implement the invention.

In Water Board v. Moustakas [1988] HCA 12; (1988) 62 ALJR 209 at p.211, there appears the following passage in the joint reasons for judgment of Mason CJ, Wilson, Brennan and Dawson JJ:

"More than once it has been held by this Court that a point cannot be raised for the first time upon appeal when it could possibly have been met by calling evidence below. Where all the facts have been established beyond controversy or where the point is one of construction or of law, then a court of appeal may find it expedient and in the interests of justice to entertain the point, but otherwise the rule is strictly applied."

We were taken to areas of evidence, for example the cross-examination of Mr Grool, where, on behalf of the appellant it was said that if utility had been in issue it would have been appropriate to cross- examine on the matter of utility. Other examples were given of where it would also have been relevant to adduce evidence from various witnesses. It is not sufficient, in my view, for the respondent to say that because the appellant made a submission (in the alternative to its objection) that there was no evidence to support the question of utility, the pleadings should now be amended to allow that issue to be raised. Counsel for the appellant had, as I have noted above, taken the objection and could not have been expected to do more. If the issue had been properly raised at first instance then, in my opinion, it could possibly have been met by the appellant calling further evidence or cross-examining more extensively. In my opinion, applying the principles outlined in Moustakas, it would be unfair to allow the respondent to amend its particulars of objection in the manner foreshadowed.

In those circumstances the issue of utility was not properly before his Honour.

Issues Raised By the Respondent's Notice of Contention

A. Inventiveness

This matter was the subject of the first four paragraphs of the respondent's notice of contention. I find it convenient to rearrange slightly the sequence of those paragraphs for the purpose of setting out the issues raised. The issues raised were:

. whether the combination of integers constituted a manner of new manufacture [including whether the principles discussed in NV Philips Gloeilampenfabrieken v. Mirabella International Pty Ltd [1995] HCA 15; (1995) 183 CLR 655 were applied];

. whether the combination involved an inventive step;

. whether the claimed invention was a mere combination of obvious steps to produce a new product.

In oral argument, but not in his written submissions, Mr Shavin contended that if we were to uphold the learned trial judge's conclusion that there had not been a real or reasonably clear disclosure of the means whereby livestock feed was directly supplied to the confinement pens then that integer should be disregarded when considering whether there was an inventive step. Mr Shavin conceded that this proposition had not been established expressly by authority, but was to be implied from the High Court's decision in Philips.

I do not think that it is necessary, for the purposes of this appeal, to decide that point. However, I shall briefly express a view. In my view, there is no such proposition implicit in the majority judgment in Philips. Philips was concerned with the threshold requirement of inventiveness, as distinct from the further cumulative requirements expressed within the Act, some of which are closely related to the matter of inventiveness. In my opinion, insufficiency of description in the specification or the absence of fair basing (i.e. non-compliance with s.40 of the Act) would not be determinative of the threshold requirement of inventiveness. What Philips explains is that there is always a preliminary or prima facie test of inventiveness. See for example at p.664:

"It simply means that, if it is apparent on the face of the specification that the quality of inventiveness necessary for there to be a proper subject of letters patent under the Statute of Monopolies is absent, one need go no further."

Philips was decided after the learned trial judge reserved his judgment, but a copy was referred to his Honour before judgment was delivered. His Honour made no express reference in this part of his reasons to Philips. (He had referred to that decision earlier in another context). Nevertheless, it is clear from his Honour's reasons that he considered whether the claimed invention involved an inventive step. I have set out above (at p.6) his Honour's reasoning in that regard.

The respondent criticised that reasoning and submitted that it was not enough for the combination of integers to produce something new for there to be an invention. The respondent relied upon passages in the reasons for judgment of a Full Court of this Court in Ramset Fasteners (Aust) Pty Ltd v. Advance Building Systems Pty Ltd (1996) 34 IPR 256 at pp.270-271. In my view, that criticism does not have a sound basis. In Ramset at p.271 the principle was succinctly stated (and then followed by citation of a wealth of authority) in the following terms:

"A combination patent may be valid even if each integer, when considered separately, is well known; but in that case the combination itself must be new: ...".

When his Honour held that the combination of the several integers interacted with each other to produce a new product, namely, an ocean- going vessel capable of transporting very large numbers of sheep over long distances and that this involved an inventive step, he was, in my view, correctly applying the above principle.

His Honour heard the evidence of the witnesses on either side and made the factual findings which led to that legal conclusion. His Honour acknowledged that each of the several developments (conversion of oil tankers, above deck sheephouses, storage of livestock feed in tanks, food conveyor systems) "could well be regarded as obvious steps", but it was the combination of those several integers interacting with each other that carried the day.

In the end, this submission boils down to a complaint about the manner in which his Honour decided these factual matters. In that regard, it is worth noting that Ground 2 of the respondent's notice of contention reads:

"In finding that the combination ... constituted a manner of new manufacture, the conclusion of the learned trial judge was against the evidence and the weight of the evidence."

We were taken to what I consider to be more than sufficient evidence to justify his Honour's factual findings. Mr Shavin submitted that, for there to be an inventive step, some difficulty had to be overcome, some barrier crossed. He referred to a passage from Lockhart J's judgment in R D Werner & Co v. Bailey Aluminium Products Pty Ltd (1989) 25 FCR 565 at p.574 to support the submission.

The respondent complained that his Honour did "not appear to have turned his mind separately to the two questions" of obviousness and the point under section 6 of the Statute of Monopolies. As Mr Macaw pointed out, this was precisely how the respondent had put these matters forward in paragraph 3 of its second amended particulars of objection (i.e. not separately, but together).

In my opinion, his Honour correctly applied the legal principles applicable to obviousness and invention. He found the necessary ingenuity in the subject matter of this patent. This was a quantum leap in the industry. As His Honour pointed out (at pp.432-433), before 1976 the maximum number of sheep that any vessel could carry was about 30,000 but most had a capacity much less than that. The invention provided a means for carrying 50,000 sheep with a much more convenient manner of feeding and watering them. There were several other advantages achieved in terms of cost, conversion time and reduced sheep mortality.

In my view, the matters raised in the first four paragraphs of the respondent's notice of contention have not been made out.

B. Whether there was further non-compliance with s.40(2)(a) of the Act - the method of ventilation.

It was submitted on behalf of the respondent that the specification did not fully describe the method of ventilating the multi-storeyed superstructure in two further respects. The first was in the case of a superstructure less than 18 metres wide, in circumstances where the wind and the ship were travelling at approximately the same speed and in the same direction. The second was in the case of a superstructure greater than 18 metres wide, under any circumstances.

It will be recalled that his Honour dealt with this problem of ventilation in the context of utility. I have expressed the view that, for the reasons given earlier, the matter of utility was not properly before his Honour. I agree with Mr Macaw's submission that it would be inappropriate for this Court on appeal to embark upon a process of fact finding in relation to this question of ventilation, for the purposes of deciding whether there was adequate description in the specification. Furthermore, given my conclusion on the matter of full disclosure and fair basing in respect of direct supply of livestock feed, there is very little purpose in pursuing the matter of ventilation. I do not propose to do so.

C. Infringement - Whether the claims, properly construed, required that the feed be made available not just to each individual confinement pen but to sheep in the confinement pens?

The respondent contended that the learned trial judge erred in finding that the food delivery system on the "Mawashi al Gasseem" fulfilled the requirement of conveying food from the storage tank to each confinement pen in "... an uninterrupted stream without the involvement of any intervening agency" (being the construction placed by his Honour on the word "directly"). The evidence was that in the case of the respondent's vessel, the "Mawashi al Gasseem", the livestock feed delivery system delivers feed through a pipe to each pen but requires a tap to be manually operated in order to fill the feed troughs. His Honour held that this was a system which conveys the feed "directly to the pen". His Honour said that the patent did not claim a system of automatic feeding. The respondent contended that a proper construction of the complete specification was that an automatic feeding system was claimed. The respondent sought to draw a distinction between making feed available to the pen and making feed available to the sheep in that pen. It was clear, so it was put, that feed has not been conveyed to a pen when it is sitting in a pipe outside the pen.

The respondent further contended that the learned trial judge erred by failing to construe claims 1 and 2 as requiring conveyance of feed from the bulk storage tank not simply to each individual confinement pen but also to provide for the feed to be available to the sheep in that pen without the involvement of any intervening agency.

In my opinion, the learned trial judge correctly construed the complete specification and the claims. At p.455 his Honour said:

"The only sensible construction that can be applied having regard to the process being described and the ordinary meaning of the words used, is that the patent contemplates that the food would be conveyed from the storage tank to each confinement pen in an uninterrupted stream without the involvement of any intervening agency."

In my view, the system employed on the "Mawashi al Gasseem" whereby the feed was delivered by pipes and poised immediately above the troughs at each pen, so that the feed fell into the troughs at the turn of a tap, amounted to an infringement of the Patent. There may well be systems where, perhaps using sensors, there is automatic supply of feed to troughs in accordance with the level of consumption by the livestock in each pen. That was not the system described in the complete specification or the claims.

The Cross-Appeal

In a separate judgment, after hearing argument on the matter of costs, his Honour dismissed the application and (in respect of the cross-claim) declared that the Patent was invalid. His Honour ordered that each party bear its own costs. The respondent cross-appeals and says that costs should have been awarded in its favour to a substantial extent.

His Honour received affidavit evidence filed by the applicant and heard submissions from the parties on the question of costs. Having reserved judgment, his Honour published supplementary reasons for his decision that each party should pay its own costs. His Honour held that it was inappropriate to treat the proceeding as if it were two cases i.e. an application for infringement and a cross-claim for a declaration of invalidity. I respectfully agree with his Honour's conclusion in that regard and for the reason given, namely, that the cross-claim was necessary as a defence to the infringement claim.

The applicant's affidavit evidence included calculations of what were said to be the relatively small percentages of Court time and affidavit material devoted to issues decided in favour of the respondent. His Honour held that this was not a case in which a mathematical assessment could be made of the time spent in pursuing particular issues with a view to awarding costs on a pro-rata basis to the party which succeeded on each separate issue. Nevertheless, his Honour accepted the appellant's general assertions and found that much time was occupied and considerable expense was incurred in dealing both at trial and before trial, with issues which were either not pressed by the respondent or on which it failed. His Honour expressly excluded from adverse consideration the attack made by the respondent on the basis that Mr Hansen was not the inventor and had obtained the Patent by making a false declaration to the Patent Office. On the other hand, his Honour criticised the respondent for pressing the question of prior publication, for reasons which he expressed. In that regard his Honour said:

"There is in my view justification to discount the respondent's entitlement to costs to reflect the additional unnecessary expense to which the applicant was put in the respondent's pursuit of this aspect of the case."

His Honour continued:

"It is unnecessary to detail the various issues which the respondent abandoned either before or at trial. There is merit in the applicant's submission that allowance should be made in its favour to recognise the additional unnecessary costs it incurred. The respondent chose, no doubt for tactical reasons, to plead at enormous length many particulars of invalidity which it did not press. It is not possible to accurately assess the costs to which the applicant was thereby put but I am of the view that any allowance in the applicant's favour should be significant.

. . .

The respondent's tactics have occasioned an unnecessary prolongation of the trial and thus have caused the applicant to incur unnecessary expense. On balance I think it is fair to conclude in the facts of this case, given the degree of success on an issue by issue basis enjoyed by the respective parties that justice will be done if each party pays its own costs of the proceeding. I do not regard the respondent's conduct of the case as being so unreasonable as to warrant an order for costs in the applicant's favour."

In his reasons, his Honour referred to a number of well known authorities and, with all due respect, most succinctly set out what his Honour described as the "general thrust" of those authorities.

The respondent, accepting that the matter of costs was one for the discretion of the trial judge, focussed on two issues. The first was the matter of prior publication. The respondent criticised his Honour's implied conclusion that much time and considerable expense were incurred in dealing both at trial and before trial with this issue. Mr Shavin submitted that his Honour fell into error in holding that the respondent had access to all the relevant witnesses whose evidence was critical on this issue, but who proved unreliable. It was "taking matters too far", so it was put, to place an obligation on a party ruthlessly to cross-examine witnesses in a foreign country, whom it proposes to call to give evidence on its behalf, with a view to assessing "precisely how they are going to survive in the witness box in the middle of the trial". Secondly, Mr Shavin submitted that much of the evidence from these witnesses was relevant not only to the matter of prior publication but also to the issues of obviousness, manner of manufacture, fair basing and sufficiency of description. The respondent contended that by holding that the issues canvassed before the Court had been unreasonably or improperly raised, with the consequence that the respondent should have no costs, there had clearly been a miscarriage of the exercise by his Honour of his discretion. Mr Shavin accepted that the respondent, by abandoning a significant number of the particulars of objection, should suffer some penalty in costs, but said that these matters had been abandoned before or at the commencement of the trial. Mr Shavin went further and contended that not only was the issue of prior publication properly and reasonably raised, but not to do so would have left the respondent's legal advisers open to a complaint of negligence. The issue was open. Independent witnesses, not employed by or otherwise accountable to the respondent, were prepared to depose to certain events and meetings. The fact that the trial judge did not accept their evidence did not mean, so it was submitted, that the evidence was "improperly run". Mr Shavin accepted that there should be a "significant discount" on the respondent's costs in the order of 20- 30%, but not 100%. That percentage did not reflect the fact, so it was put:

"... that at the end of the day these proceedings were brought against us, we had to defend them."

Mr Macaw, for the appellant, submitted that the matter of the respondent's access to all relevant witnesses was only one of the considerations which his Honour took into account. In any event, so it was submitted, his Honour's assessment has not been shown to have been inaccurate. In that regard, there was plainly access to the relevant witnesses in order to provide their affidavit material.

In my view, the respondent has not demonstrated any error of principle on the learned trial judge's part in reaching his decision that each party should bear its own costs.

I accept that the matter of access to the witnesses on the question of prior publication played a major part in his Honour's reasoning. I accept also that some of the evidence of those witnesses was relevant to other issues. The factual attack upon his Honour's conclusion on the matter of access is not, in my view, sustained. There was evidence from which his Honour was entitled to draw that inference. That evidence was the very fact that the respondent was able to obtain detailed affidavit evidence from the witnesses concerned. There was also evidence that Captain Pedersen was under a retainer from the respondent. The fact that these witnesses were largely resident overseas was, in my opinion, a matter which his Honour was entitled to discount, given the substantial dimensions of this litigation and the availability of fast long haul air travel.

Furthermore, it is clear from his Honour's reasons that his decision on the question of costs was not totally dependent on the matter of the respondent raising the issue of prior publication unjustifiably. As mentioned above, his Honour referred to the fact that, for tactical reasons, the respondent chose to plead at enormous length many particulars of invalidity which it did not press.

In my opinion, this is a case where the question of costs should be left to the impression formed in the mind of the trial judge when he came to exercise his discretion. The hearing occupied fourteen days. The appeal books contain over 2000 pages (of which some 921 comprised transcript of evidence). Given that no error of principle has been demonstrated, I would not interfere with his Honour's discretion on the matter of costs. I would dismiss the cross-appeal with costs.

Conclusion

The appeal and cross-appeal should each be dismissed. The appellant should pay the respondent's costs of the appeal. The respondent should pay the appellant's costs of the cross-appeal.

I certify that this and the preceding thirty-four

(34) pages are a true copy of the Reasons for

Judgment of Justice Carr.

Associate:

Date: 18 February 1997

IN THE FEDERAL COURT OF AUSTRALIA )

VICTORIA DISTRICT REGISTRY ) No. VG 169 of 1996

GENERAL DIVISION )

On appeal from a judge of the Federal Court of Australia

BETWEEN: PATENT GESELLSCHAFT AG

Appellant

AND: SAUDI LIVESTOCK TRANSPORT AND

TRADING COMPANY

Respondent

CORAM: Jenkinson, Carr and Sackville JJ.

PLACE: Melbourne

DATE: 18 February 1997

REASONS FOR JUDGMENT

SACKVILLE J:

I have had the advantage of reading the reasons for Judgment prepared by Carr J. I agree with his Honour's conclusions and reasoning on the issues raised by the notice of appeal and by the cross-appeal. I do not think it necessary to address the respondent's notice of contention.

I agree with the orders proposed by Carr J.

I certify that this is a true copy of the Reasons for Judgment of the Honourable Justice Sackville.

Associate:

Dated: 18 February 1997

Appearances

Counsel for the appellant: Mr R C Macaw QC and Mr B J Hess

Solicitor for the appellant: Corrs Chambers Westgarth

Counsel for the respondent: Mr D Shavin QC and Mr A J Ryan

Solicitor for the respondent: Finlaysons

Dates of hearing: 8, 9 and 10 October 1996