Baygol Pty Ltd v Foamex Polystyrene Pty Ltd [2005] FCA 145 (28 February 2005)

Last Updated: 1 March 2005

FEDERAL COURT OF AUSTRALIA

Baygol Pty Ltd v Foamex Polystyrene Pty Ltd [2005] FCA 145

INTELLECTUAL PROPERTY – patents – infringement – components used to form building footings – preliminary question relating to construction of patent – relevance of documents, material and evidence concerning the history of the patent in the Patents Office


Patents Act 1990 (Cth) ss 116, 117

Catnic Components Ltd v Hill & Smith Ltd [1982] RPC 183 discussed
Prestige Group (Australia) Pty Ltd v Dart Industries Inc (1990) 26 FCR 197 applied
Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKHL 46 applied












BAYGOL PTY LTD (ACN 008 055 212) v FOAMEX POLYSTYRENE PTY LTD (ACN 088 759 264)
NSD 1530 OF 2003

BAYGOL PTY LTD (ACN 008 055 212) v HUNTSMAN CHEMICAL COMPANY AUSTRALIA PTY LTD t/a RMAX (ACN 004 146 338)
NSD 1581 OF 2003

TAMBERLIN J
SYDNEY
28 FEBRUARY 2005

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 1530 of 2003 AND NSD 1581 of 2003

BETWEEN:	BAYGOL PTY LTD (ACN 008 055 212) APPLICANT
AND:	NSD 1530 of 2003 FOAMEX POLYSTYRENE PTY LTD (ACN 088 759 264) RESPONDENT NSD 1581 of 2003 HUNTSMAN CHEMICAL COMPANY AUSTRALIA PTY LTD t/a RMAX (ACN 004 146 338) RESPONDENT
JUDGE:	TAMBERLIN J
DATE OF ORDER:	28 FEBRUARY 2005
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.	The tender is refused.
2.	Costs relating to this question are reserved.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N1530 of 2003 AND N 1581 of 2003

BETWEEN:	BAYGOL PTY LTD (ACN 008 055 212) APPLICANT
AND:	NSD 1530 of 2003 FOAMEX POLYSTYRENE PTY LTD (ACN 088 759 264) RESPONDENT NSD 1581 of 2003 HUNTSMAN CHEMICAL COMPANY AUSTRALIA PTY LTD t/a RMAX (ACN 004 146 338) RESPONDENT

JUDGE:	TAMBERLIN J
DATE:	28 FEBRUARY 2005
PLACE:	SYDNEY

REASONS FOR JUDGMENT

BACKGROUND

1 Each of the respondents, Foamex Polystyrene Pty Ltd ("Foamex") and Huntsman Chemical Company Australia Pty Ltd ("Huntsman") are sued by Baygol Pty Ltd ("Baygol") on the same patent, namely, Australian Patent 584769, in relation to an invention by Mr Peter Koukourou entitled "Building Foundation". Both matters are brought on the basis that there has been infringement by the supplier under s 117 of the Patents Act 1990 ("the Act").

2 In each matter, Baygol alleges that the respondents manufactured components known in the industry as "waffle pods" made of polystyrene which are used by the ultimate end user, namely a builder or concreter, as a way of forming building footings. The infringement issues under s117 are contested and the matter has been listed before me for preliminary hearing on the issue of the proper construction of the patent.

3 The preliminary interpretation question before me is whether the concrete spacer integer in the claims encompasses the use of a plastic spacer.

4 The patent has a number of claims and it is claims 1, 2 and 3 that are relied on in the infringement proceedings. The widest claim is claim 1, which reads as follows:

"1. A method of forming a building foundation, comprising leveling (sic) the supporting ground, forming peripheral shuttering walls, positioning a plurality of box-like hollow members in rows on the levelled ground between the shuttering walls, placing concrete spacers on the ground between the hollow members to separate the hollow members into rows, laying lower reinforcing rods on the said spacers and between the hollow members, in a plurality of rows which intersect at right angles to each other, placing reinforcing bar spacers on the hollow members, and positioning a mesh of upper reinforcing rods on the spacers, and pouring concrete to envelope (sic) said concrete spacers, reinforcing bar spacers, reinforcing rods, mesh, and hollow members and thereby form a foundation with a reinforced slab and a plurality of intersecting reinforced beams." (Emphasis added)

5 It is common ground that since the late 1980s, period concrete spacers, which were originally used in constructing footings, have been replaced by plastic spacers. It is also common ground that the methods used by builders and concreters in forming footings, in which the respondents’ products of construction are used, are methods in which plastic spacers are used in place of concrete spacers.

6 The importance of the construction question is that if the Court were to find, notwithstanding the applicant’s evidence, that it is essential to the working of the invention that the material of which the spacer is made must be concrete and that a variant which employed a plastic spacer in the method was not within the specification, then the infringement application could not succeed in either of the two proceedings even if it had all the other features of the claimed invention.

7 I note that Baygol sought to raise an estoppel argument on the construction question but that is not now pursued.

8 The respondent refers to s 116 of the Act, which allows the Court in interpreting a complete specification as amended to refer to the specification without amendment. The respondent submits that if this is done the Court would find a version of the specification before amendment which simply refers to the expression "spacer" without qualification by the word "concrete" and a final version of the complete specification in which the word "concrete" has been inserted to qualify the term "spacer". Section 116 is framed in narrow terms and does not indicate that recourse may be had to documentation or circumstances surrounding amendments to the patent.

9 Importantly, for the purpose of this application, the respondents contend that the entire file history of the patent can and should be referred to and relied on. The file history includes documents other than the earlier versions of the patent specification such as filed documents which advance reasons for any amendment together with the examiner’s report in support of the construction for which the respondents contend.

10 Baygol objects to the admission of any documents, material or evidence concerning the history of the application in the Patents Office other than the previous versions of the complete specification as specifically provided for by s 116 of the Act. That section, it is said, provides that a court has a discretion, in interpreting a complete specification as amended, to refer to the specification without amendment.

11 This dispute clearly raises the question as to whether the departmental file, and in particular, documents, reports and correspondence and notes relating to the making of amendments are admissible in evidence.

THE OBJECTIONS

12 The respondents submit that having regard to the applicants’ preliminary submissions, it is necessary and appropriate for the Court to consider the Patent Office file. The respondents refer to the speech of Lord Diplock in Catnic Components Ltd v Hill & Smith Ltd [1982] RPC 183 at 243-5 (Catnic):

"My Lords, a patent specification is a unilateral statement by the patentee, in words of his own choosing, addressed to those likely to have a practical interest in the subject matter of his invention (i.e. ‘skilled in the art’), by which he informs them what he claims to be the essential features of the new product or process for which the letters patent grant him a monopoly. It is those novel features only that he claims to be the essential that constitute the so-called ‘pith and marrow’ of the claim. A patent specification should be given a purposive construction rather than a purely literal one derived from applying to it the kind of meticulous verbal analysis in which lawyers are too often tempted by their training to indulge. The question in each case is: whether persons with practical knowledge and experience of the kind of work in which the invention was intended to be used, would understand that strict compliance with a particular descriptive word or phrase appearing in a claim was intended by the patentee to be an essential requirement of the invention so that any variant would fall outside the monopoly claimed, even though it could have no material effect upon the way the invention worked.

The question, of course, does not arise where the variant would in fact have a material effect upon the way the invention worked. Nor does it arise unless at the date of publication of the specification it would be obvious to the informed reader that this was so. Where it is not obvious, in the light of then-existing knowledge, the reader is entitled to assume that the patentee thought at the time of the specification that he had good reason for limiting his monopoly so strictly and had intended to do so, even though subsequent work by him or others in the field of the invention might show the limitation to have been unnecessary. It is to be answered in the negative only when it would be apparent to any reader skilled in the art that a particular descriptive word or phrase used in a claim cannot have been intended by a patentee, who was also skilled in the art, to exclude minor variants which, to the knowledge of both him and the readers to whom the patent was addressed, could have no material effect upon the way in which the invention worked."

...

Put in a nutshell the question to be answered is: Would the specification make it obvious to a builder familiar with ordinary building operations that the description of a lintel in the form of a weight-bearing box girder of which the back plate was referred to as ‘extending vertically’ from one of the two horizontal plates to join the other, could not have been intended to exclude lintels in which the back plate although not positioned at precisely 90 degrees to both horizontal plates was close enough to 90 degrees to make no material difference to the way the lintel worked when used in building operations? No plausible reason has been advanced why any rational patentee should want to place so narrow a limitation on his invention. On the contrary, to do so would render his monopoly for practical purposes worthless, since any imitator could avoid it and take all the benefit of the invention by the simple expedient of positioning the back plate a degree or two from the exact vertical." (Emphasis added)

13 The respondents say that when construing a patent claim the scope of this argument is very limited. It is said that the applicant must show that it would be apparent to any reader skilled in the art that a particular descriptive word or phrase, for example, the expression "concrete" in this case, cannot have been intended by the patentee to have its literal meaning. The respondent says that there is a two-part test. First, the variant must be minor and, second, the variant must have no material effect on the way the invention worked. In that context, it must then be apparent to any reader skilled in the art that the patentee cannot have meant what he prima facie seems to say.

14 The respondents submit that it is not possible to proceed immediately to the question whether the variant under consideration would have a material effect on the way the patented spacer worked.

15 The respondents say that in order to resolve the dispute as to construction it is necessary to ask in the present context whether a builder familiar with the ordinary building operations would read the words "concrete spacer" so as to conclude that the patentee could not have intended to exclude plastic spacers. In order to properly consider this submission, the respondents submit that the history of what actually happened in the Patents Office is important. Facts are preferable to speculation as to what may have occurred. The respondents submit that in applying to amend the specification, reasons were given by Mr Koukourou and that these reasons had the effect of including the word "concrete" in the disputed integer. The respondent says that in the present circumstances the history relating to the amendments and the reasons will throw light on the construction question.

16 Counsel for Baygol identifies the specific documents in the file that are objectionable as correspondence relating to the amendments, the examination of the proposed amendments, the request for leave to appeal and related documents. The objections also encompass all other documents in the file.

17 Counsel for Baygol says that the Catnic questions should not be applied in the way suggested by the respondents. Counsel points out that Lord Diplock poses the preliminary question as being whether the variant in question would have a material effect on the way their invention worked and that this is a factual question to be answered by expert evidence: cf Catnic at 243-4. The construction question only arises, it is said, in the event that this question as to whether the variant would have such a material effect is answered in the negative. I agree with this submission.

18 In support of the contention that the file should not be admitted, Counsel for Baygol also referred to the observations of Gummow J in Prestige Group (Australia) Pty Ltd v Dart Industries Inc (1990) 26 FCR 197 (Prestige) when considering the question of whether the United States doctrine of "file wrapper estoppel" could have any application in Australia. At 211, his Honour said:

"The patent specification is much more than a document setting down a commercial bargain. It is not ‘a written instrument operating inter partes, but a public instrument’: Welch Perrin & Co Pty Ltd v Worrel [1960] HCA 91; (1961) 106 CLR 588 at 610. Provision for it is made in legislation permitting a special monopoly, and the English predecessor to the present standard patent, the issue of which is provided for in Pt VI of the Act, was Letters Patent issued by the Crown. The granting of the modern standard patent is an activity not contractual but quasi-legislative in character. Hence, one should have thought that the restrictions which apply to the admission of negotiations prior to contract as aids to construction ... would apply a fortiori to dealings and procedures preceding the grant of patent protection. Learned Hand J was well aware of the difficulty, saying in Lyon v Boh, supra at 50-1:

‘Ordinarily the final writing, which incorporates a solemn agreement, is taken by the courts as the parties want it taken; that is, it is the sole resort for ascertaining their intentions, for the excellent reason that the parties meant it to be such. All prior negotiations are disregarded, since otherwise the chief purpose of reducing the contract to writing would be frustrated. However, there is the exception, well settled and very recently confirmed by the Supreme Court [Weber Electric Co v Freeman Electric Co 256 US 668], that, if a patentee submits to the rejection of a claim while his application is in the Patent Office, he may not later insist that other claims which he does get are to be regarded as equivalent to that which was rejected.’"

19 Baygol also relies on the reasoning of Lord Hoffman in his recent speech in Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKHL 46 at [30]- [35] (Kirin-Amgen). At [35], his Lordship said:

"... The courts of the United Kingdom, the Netherlands and Germany certainly discourage, if they do not actually prohibit, the use of the patent office file in aid of construction. There are good reasons: the meaning of the patent should not change according to whether or not the person skilled in the art has access to the file and in any case life is too short for the limited assistance which it can provide. It is however frequently impossible to know without access, not merely to the file but to the private thoughts of the patentee and his advisers as well, what the reason was for some apparently inexplicable limitation in the extent of the monopoly claimed. One possible explanation is that it does not represent what the patentee really meant to say. But another is that he did mean it, for reasons of his own; such as wanting to avoid arguments with the examiners over enablement or prior art and have his patent granted as soon as possible. This feature of the practical life of a patent agent reduces the scope for a conclusion that the patentee could not have meant what the words appear to be saying. It has been suggested that in the absence of any explanation for a restriction in the extent of protection claimed, it should be presumed that there was some good reason between the patentee and the patent office. I do not think that it is sensible to have presumptions about what people must be taken to have meant but a conclusion that they have departed from conventional usage obviously needs some rational basis."

20 The speech of Lord Hoffman was endorsed by the other members of the House.

21 In my view, the observations and reasoning of Lord Hoffman in Kirin-Amgen and Gummow J in Prestige, quoted above, are applicable in the present circumstances and strongly support the conclusion advanced by Baygol, namely, that the Patent Office file should not be admitted in evidence in the present case in aid of construction of the integer under consideration. There is, as Lord Hoffman points out, the cogent practical consideration that to admit the file and thereby open up an investigation into all the circumstances could lead to a range of collateral and irrelevant questions and circumstances. The essential question in this matter is the meaning of the language used and that does not depend on whether the person skilled in the art looks at the file or investigates all the circumstances and negotiations that surround the amendment and their relative comparative importance. In Prestige, the objection to examining the Patent Office file was that it did not assist the construction of the specification which is addressed not to the public at large but to persons skilled in the art. This consideration is referred to in the decision of Gummow J in Prestige. There is great force, in my view, in the conclusion of his Honour that the restrictions which apply to the admission of negotiations as aids to the construction of contracts apply a fortiori to dealings and procedures preceding the grant of a patent protection. As his Honour stated at 213:

"... It is not for a third party, wishing to know the ambit of the monopoly to be put to inquiry as to the carriage of the application before the specification took its final form. The authorities in this country have eschewed recourse to extrinsic materials of this kind, and it is not even permissible to resort as of course to the body of the specification to vary or qualify the meaning of terms in the claims: Welch Perrin & Co Pty Ltd v Worrel (supra) at 610; Interlego AG v Toltoys Pty Ltd [1973] HCA 1; (1973) 130 CLR 461 at 479. These principles were applied in this Court in the earlier litigation concerning the Patent, which is presently further in suit. Where the complete specification has been amended before grant, the Court may construe it in its final form by referring to the specification without the amendments but that is the consequence of specific provisions in ... the Act." (Emphasis added)

22 Accordingly, in the present case, I am of the view that the file of the Patent Office cannot and should not be admitted in the present case. I reserve the question of costs in relation to the determination of this issue.

I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin.

Associate:

Dated: 28 February 2005

NSD1530 of 2003
Counsel for the Applicant:	A Franklin SC and J Rawlings
Solicitor for the Applicant:	Griffin Vincent Lawyers
Counsel for the Respondent:	S Minahan
Solicitor for the Respondent:	Rigby Cooke Lawyers Aitken McLachlan & Thorpe
NSD 1581 of 2003
Counsel for the Applicant:	A Franklin SC and J Rawlings
Solicitor for the Applicant:	Griffin Vincent Lawyers
Counsel for the Respondent:	J. Emmerson QC and S C G Burley
Solicitor for the Respondent:	Freehills
Date of Hearing:	14 and 15 December 2004
Date of Judgment:	28 February 2005