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Federal Court of Australia - Full Court |
Last Updated: 19 March 2008
FEDERAL COURT OF AUSTRALIA
Ajinomoto Co Inc v NutraSweet Australia Pty Ltd [2008] FCAFC 34
PATENTS - validity -
inventive step - whether invention obvious to a person skilled in the art
in light of the common general
knowledge at the priority date - proper
construction of ss 7(2) and 7(3) of the Patents Act 1990
(Cth) - prior art information made publicly available - information
that skilled person would be reasonably expected to
have ascertained, understood
and regarded as relevant to work in the relevant art in the patent area -
evidence of work in Australia -
work in closely related areas -
blending - artificial sweeteners - whether evidence supported
conclusion that it had
been shown to be obvious
Held: The appellant’s
patent does not satisfy the test for inventive step pursuant to s 18 of the
Patents Act 1990 (Cth). Evidence of work in Australia need only
be closely related to the relevant art in the patent area.
Patents Act 1990 (Cth) ss 7(2)
and (3), 18
Acme Bedstead Co Ltd v
Newlands Brothers Ltd [1937] HCA 63; (1937) 58 CLR 689, cited
Allina Pty Ltd v
Federal Commissioner of Taxation (1991) 28 FCR 203, cited and
considered
Cape Brandy Syndicate v Inland Revenue Commissioners [1921]
2 KB 403, cited
Catnic Components Ltd v Hill and Smith Ltd [1982] RPC
183, cited
CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187
CLR 384, cited
Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner
of Taxation [1981] HCA 26; (1981) 147 CLR 297, cited
Gambro Pty Ltd v Fresenius
Medical Care South East Asia Pty Ltd (2004) 61 IPR 442, cited and
considered
Grain Elevators Board (Vic) v Dunmunkle Corporation [1946] HCA 13; (1946)
73 CLR 70, cited and considered
Harris v Repatriation Commission
(2000) 62 ALD 161, cited
Hepples v Federal Commissioner of Taxation
[1992] HCA 3; (1991) 173 CLR 492, cited
Hooker v Gilling (2007) 48 MVR 136,
cited
HPM Industries Pty Ltd v Gerard Industries Ltd [1957] HCA 47; (1957) 98 CLR
424, cited
Hunter Resources Ltd v Melville [1988] HCA 5; (1988) 164 CLR 234, cited
and considered
Interlego AG v Croner Trading Pty Ltd [1992] FCA 624; (1992) 39 FCR
348, cited
Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No
2) [2007] HCA 21; (2007) 235 ALR 202, cited, considered and distinguished
Minister
for Resources v Dover Fisheries Pty Ltd [1993] FCA 366; (1993) 43 FCR 565,
cited
Minnesota Mining and Manufacturing Company v Beiersdorf (Australia)
Ltd [1980] HCA 9; (1980) 144 CLR 253, cited and considered
Mullard Radio Valve Co
Ltd v Philco Radio and Television Corp of Great Britain Ltd (1936) 53 RPC
323, cited
NSI Dental Pty Ltd v University of Melbourne (2006) 69 IPR
542, cited and considered
NutraSweet Australia Pty Ltd v Ajinomoto Co Inc
(No 3) [2007] FCA 966
NutraSweet Australia Pty Ltd v Ajinomoto Co Inc
[2005] FCA 1524; (2005) 224 ALR 200
Ormond Investment Co v Betts [1928] AC 143,
cited and considered
Sun World Inc v Registrar, Plant Variety Rights
(1997) 75 FCR 528, cited
Vickers, Sons & Co Ltd v Siddell
(1890) 7 RPC 292,
cited
AJINOMOTO
CO INC v NUTRASWEET AUSTRALIA PTY LTD (ACN 090 591 174) VID 608 OF
2007
AJINOMOTO CO INC v NUTRASWEET AUSTRALIA PTY LTD
(ACN 090 591 174)
VID 731 OF 2007
BLACK CJ, SUNDBERG
AND WEINBERG JJ
17 MARCH 2008
MELBOURNE
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JUDGES:
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BLACK CJ, SUNDBERG AND WEINBERG JJ
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DATE OF ORDER:
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17 MARCH 2008
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WHERE MADE:
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MELBOURNE
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THE COURT ORDERS THAT:
1. The appeal be listed for further hearing on a date to be fixed;
2. Costs be reserved.
Note: Settlement and entry of orders is dealt with in Order 36 of the
Federal Court Rules.
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IN THE FEDERAL COURT OF AUSTRALIA
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|
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VICTORIA DISTRICT REGISTRY
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VID 731 OF 2007
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ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF
AUSTRALIA
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BETWEEN:
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AJINOMOTO CO INC
Appellant |
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AND:
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NUTRASWEET AUSTRALIA PTY LTD (ACN 090 591
174)
Respondent |
THE COURT ORDERS THAT:
2. Within 14 days the parties file and serve written submissions as to the
costs of the appeal.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal
Court Rules.
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ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF
AUSTRALIA
|
|
BETWEEN:
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AJINOMOTO CO INC
Appellant |
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AND:
|
NUTRASWEET AUSTRALIA PTY LTD (ACN 090 591
174)
Respondent |
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JUDGES:
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BLACK CJ, SUNDBERG AND WEINBERG JJ
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DATE:
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17 MARCH 2008
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PLACE:
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MELBOURNE
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REASONS FOR JUDGMENT
THE COURT
1 There are two appeals presently before this Court. The first appeal (VID 731 of 2007) is against the primary judge’s order that Ajinomoto Co Inc’s patent number 727199 be revoked: NutraSweet Australia Pty Ltd v Ajinomoto Co Inc [2005] FCA 1524; (2005) 224 ALR 200 ("the revocation judgment"). The second appeal (VID 608 of 2007) is against his Honour’s subsequent rejection of the appellant’s application to amend its patent: NutraSweet Australia Pty Ltd v Ajinomoto Co Inc (No 3) [2007] FCA 966 ("the amendment judgment").
2 The Court has heard full argument in relation to the revocation judgment. It has determined that the appeal from the amendment judgment should be put over to a date to be fixed.
INTRODUCTION
3 The appellant, Ajinomoto Co Inc (Ajinomoto), is involved in the manufacture and production of artificial sweeteners. So too is the respondent, NutraSweet Australia Pty Ltd ("NutraSweet"), a subsidiary of the NutraSweet Company of the United States of America.
4 The Ajinomoto patent is for what is commonly referred to as an intense sweetener composition. Only a small amount of an intense sweetener needs to be added to a food product in order to obtain the desired sweetness. The comparison is with sucrose. If a sweetener has a higher intensity than sucrose, it is usually referred to as an intense sweetener. Thus, the sweetness intensity of an artificial sweetener is generally expressed relative to sucrose.
5 As the primary judge observed, intense sweeteners provide several benefits. The less sweetener that is required for a particular product, the lower the unit cost of that product. Cost is particularly important in the market for low calorie food and drinks which is one of the fastest growing segments of the food industry. The stability of the sweetener is also important. A sweetener must be stable both as a bulk chemical, and in the product to which it is applied.
6 It is important that an intense sweetener exhibit appropriate "sweetness characteristics". First there is sweetness quality. This refers to the nature of the sweetness itself, and its similarity to sucrose. Next is its "sweetness time profile". This is a reference to the time taken from the onset of the sweetness to reach its peak sweetness intensity (early taste), and the time taken for the taste to wane (aftertaste). It is common ground that sucrose has a relatively quick sweetness impact followed by a fairly sharp, clean, cut-off. Since the object of a high intensity sweetener is to approximate the characteristics of sucrose, the sweetness of a sugar substitute should build and recede in the mouth in a similar way.
7 The search for artificial sweeteners with high intensity has been going on for a considerable time. As at the priority date a number of intense sweeteners were available and relatively well-known. The primary judge noted that saccharin was the oldest of these, with a sweetness intensity approximately 300 times that of sucrose. His Honour observed that aspartame, which is manufactured and sold by NutraSweet all around the world, was discovered in 1965. By 1997 aspartame was the most widely used sweetener commercially available in Australia. It is predominantly used in soft drinks, particularly diet colas, and is typically blended with another well-known intense sweetener, AceK.
8 The Ajinomoto patent has a priority date of 10 March 1997 ("the priority date"). NutraSweet holds an earlier patent for an artificial sweetener (Australian Patent No 664663) which it markets under the trade name "Neotame". The NutraSweet patent (which was accepted in Australia in November 1995) is modelled upon an even earlier patent which it registered in France in 1993. The inventors were two French scientists, Claude Nofre and Jean-Marie Tinti. It will be convenient to refer to this patent hereafter as either the Nofre Tinti patent or the Nofre Tinti specification.
9 The Ajinomoto patent claims as the invention a sweetener composition which comprises a blend of N-[N-(3,3-dimethylbutyl)-L-α-aspartyl]-L-phenylalanine 1-methyl ester (abbreviated as "DMB-APM") with two other well-known intense sweeteners, aspartame and acesulfame K ("AceK"), or either one of them. DMB-APM is in fact Neotame.
10 In 2002 NutraSweet instituted proceedings against Ajinomoto seeking revocation of the Ajinomoto patent. It argued that the Ajinomoto patent was invalid on a number of bases. It claimed that its own earlier patent anticipated Ajinomoto’s claimed invention, and that the Ajinomoto patent therefore lacked novelty. It argued that when compared with the prior art base, as it existed before the priority date, the Ajinomoto patent lacked an inventive step. It also alleged that the Ajinomoto patent was not useful. Finally, it contended that the claimed invention was not a manner of manufacture within the meaning of s 6 of the Statute of Monopolies 1623 (Imp).
11 The primary judge accepted NutraSweet’s challenge to the validity of the Ajinomoto patent on the basis that it lacked an inventive step. He rejected NutraSweet’s other challenges based on novelty and usefulness. He did not deal with its challenge based on manner of manufacture. He ordered that the patent be revoked. He stayed that order pending the hearing and determination of this appeal.
12 NutraSweet has filed a notice of contention. It argues that even if Ajinomoto’s appeal succeeds regarding his Honour’s analysis of the question of obviousness, the Ajinomoto patent should nonetheless be revoked because the blend claimed as the invention fails the test of utility, and is not in any event a manner of manufacture.
THE AJINOMOTO PATENT
13 Put simply, the invention claimed by the Ajinomoto patent is a combination or blend of high intensity sweeteners. The first of these is the compound described as "DMB-APM", or Neotame. DMB-APM is itself a synthesised derivative of aspartame.
14 The invention is said to lie in the combination of Neotame with either or both aspartame and AceK. The Ajinomoto patent claims that a blend of Neotame with one or both of these other intense sweeteners will arrive at a composition the sweetness quality of which is closer to sucrose than any single one of the two or three intense sweeteners used to form the blend. It is important to appreciate that the patent is not concerned with the synthesis or discovery of a new compound. The invention lies in the blend.
15 The Ajinomoto patent refers at some length to the prior art. It notes that DMB-APM was reported to have 10,000 times the sweetness of sucrose while the figure for Ace-K was approximately 200 times that of sucrose. The Ajinomoto patent gained this information from the Japanese translation of the Nofre Tinti patent to which it specifically referred.
16 The Ajinomoto patent then states:
"The profile of the sweetness characteristics of DMB-APM have not been reported in detail. According to the present inventors’ findings, however, the sweetener is extremely weak in early taste ... whereas it is extremely strong in later taste .... Further, it has a strong astringent taste. Accordingly, the sweetness characteristics of DMB-APM are not so well-balanced as those of sucrose. Meanwhile, APM is weak in early taste though not so weak as DMB-APM, whereas it is strong in later taste though not so strong as DMB-APM. ...
On the other hand, AceK (the sweetness level being, like APM, approximately 200 times that of sucrose... is inferior in sweetness quality to DMB-APM and APM. It is stronger in later taste, bitter taste, astringent taste, peculiar taste and irritation, compared with DMB-APM and APM. A variety of improvements including an improvement in sweetness with the combined use of AceK with APM ... have been proposed."
17 The Ajinomoto patent went on to claim that the inventors had found that combining DMB-APM with aspartame and/or AceK at specific ratios resulted in a sweetener composition whose sweetness characteristics were well-balanced, with the early taste being strengthened and the later taste weakened. The inventors claimed that the sweetener composition that they had produced was closer to that of sucrose than that of each sweetener when used alone.
18 The Ajinomoto patent is non-specific when it comes to identifying the ratios required to achieve this result. It speaks of an amount of DMB-APM of between 0.1% and 35% by weight based on the total amount of DMB-APM and aspartame. It says that the best results are achieved when the amount is between 0.3% and 3% by weight.
19 Likewise, the Ajinomoto patent speaks of the use of between 0.5% and 85% AceK based on the total amount of DMB-APM, aspartame and AceK. It indicates a preference for between 1% and 75% by weight.
20 When DMB-APM, aspartame and Ace-K are all combined, the Ajinomoto patent proffers a combination of between 3% and 80% DMB-APM, and a preference of between 3.5% and 60% by weight.
21 It goes without saying that these margins are extremely broad.
22 Moving then to the claims set out in the Ajinomoto patent, they are as follows:
"1 A sweetener composition comprising N-[N-(3,3-dimethylbutyl)-L-α-aspartyl]-L-phenylalanine 1-methyl ester (DMB-APM) and Aspartame (APM) and/or Acesulfame K (AceK) in a ratio which gives sweetness quality thereto closer to that of sucrose than any one of the N-[N-(3,3-dimethylbutyl)-L-α-aspartyl]-L-phenylalanine 1-methyl ester, Aspartame and Acesulfame K.
2. A sweetener comprising N-[N-(3,3-dimethylbutyl)-L-α-aspartyl]-L-phenylalanine 1-methyl ester and Aspartame, wherein the amount of N-[N-(3,3-dimethylbutyl)-L-α-aspartyl]-L-phenylalanine 1-methyl ester is between 0.1% by weight and 35% by weight based on the total amount of the N-[N-(3,3-dimethylbutyl)-L-α-aspartyl]-L-phenylalanine 1-methyl ester and the Aspartame.
3. A sweetener composition comprising N-[N-(3,3-dimethylbutyl)-L-α-aspartyl]-L-phenylalanine 1-methyl ester, Aspartame and Acesulfame K, wherein the amount of the Acesulfame K is between 0.5% by weight and 85% by weight based on the total amount of the three sweeteners.
4. A sweetener composition comprising N-[N-(3,3-dimethylbutyl)-L-α-aspartyl]-L-phenylalanine 1-methyl ester and Acesulfame K, wherein the amount of the N-[N-(3,3-dimethylbutyl)-L-α-aspartyl]-L-phenylalanine 1-methyl ester is between 3% by weight and 80% by weight based on the total amount of the N-[N-(3,3-dimethylbutyl)-L-α-aspartyl]-L-phenylalanine 1-methyl ester and Acesulfame K.
5. A beverage comprising the sweetener composition of any one of the claims 1 to 4.
6. The beverage of claim 5, which is a carbonated beverage.
7. A composition according to claim 1, claim 2 or claim 3, substantially as described herein with reference to the examples."
23 The invention described in the claims is said to relate to a sweetener composition having a "natural sweetness" and therefore being "excellent in its quality" and "closer to that of sucrose" than DMB-APM.
24 It should be noted that the Ajinomoto patent also contains a series of criticisms of the taste of both aspartame and AceK. The criticisms were challenged by NutraSweet. They were ultimately rejected by the primary judge.
THE NOFRE TINTI PATENT
25 The Nofre Tinti patent was originally publicised in Australia on 8 June 1994 as an international application. It was later publicised as an Australian Patent Application and accepted as such. All these events preceded the priority date.
26 The invention set out in Nofre Tinti patent is said to relate to novel compounds derived from aspartame which are useful as sweetening agents, and to their method of preparation. The Nofre Tinti patent describes aspartame as having "excellent organoleptic properties", but as being expensive because of its relatively low sweetening intensity, and its poor stability under certain conditions.
27 It then states:
"It has been discovered, quite unexpectedly, and this constitutes the basis of the present invention, that the sweetening potency of aspartame can be very greatly enhanced by attaching certain radicals, especially appropriately selected hydrocarbon radicals, to the free amine of aspartame; in this way the sweetening potency of aspartame can be increased by a factor of up to 80, the sweetening intensity varying according to the specific nature of the radical R ..."
28 The Nofre Tinti patent continues, after identifying DMB-APM as the "present invention" that it:
"... makes it possible for the first time to provide novel N-hydrocarbon derivatives of aspartame ... which have excellent organoleptic properties associated with a very high sweetening potency of up to 10,000 times the sweetening potency of sucrose on a weight basis, and a stability which is at least similar or greater, the effect of which is to increase the number of possible uses in food preparations, compared with aspartame."
29 Importantly, it specifically contemplates blending DMB-APM with other sweetening agents. It states:
"The sweetening agents according to the invention can be employed in an edible product by themselves, as the only sweetening agent, or in combination with other sweetening agents such as sucrose, corn syrup, fructose, sweet dipeptide derivatives or analogs (aspartame, alitame), neohesperidin, dihydrochalcone, hydrogenated isomaltulose, stevioside, the L sugars, glycyrrhizin, xylitol, sorbitol, mannitol, acesulfame, saccharin and its sodium, potassium, ammonium and calcium, salts, cyclamic acid and its sodium, potassium, and calcium salts, sucralose, monellin, thaumatin and equivalents thereof."
30 The Nofre Tinti patent contains a table of various compounds that the inventors have considered en route to their invention, together with their sweetening potency. Compound six in the table is DMB-APM which is described as having a sweetening potency of 10,000 compared to sucrose. DMB-APM stands out from among the twenty other compounds identified in the table, the next highest of which are compounds eighteen (sweetening potency of 2,500) and compounds five and nineteen (sweetening potency of 2,000).
THE RELEVANT STATUTORY REGIME
31 The conditions which Ajinomoto had to meet to establish a valid patent were those set out in s 18(1) of the Patents Act 1990 (Cth) ("the Act") as at the priority date. Relevantly, that section provided:
"... a patentable invention is an invention that, so far as claimed in any claim:
(a) is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies; and(b) when compared with the prior art base as it existed before the priority date of that claim:
(i) is novel; and
(ii) involves an inventive step; and
(c) is useful; ..."
32 With regard to the requirement that there be an inventive step s 7(2), as it stood at the priority date, was in the following terms:
"For the purposes of this Act, an invention is to be taken to involve an inventive step when compared with the prior art base unless the invention would have been obvious to a person skilled in the relevant art in the light of the common general knowledge as it existed in the patent area before the priority date of the relevant claim, whether that knowledge is considered separately or together with either of the kinds of information mentioned in subsection (3), each of which must be considered separately."
33 Importantly, for the purposes of this appeal, s 7(3) provided:
"For the purposes of subsection (2), the kinds of information are:
(a) prior art information made publicly available in a single document or through doing a single act; and(b) prior art information made publicly available in 2 or more related documents, or through doing 2 or more related acts, if the relationship between the documents or acts is such that a person skilled in the relevant art in the patent area would treat them as a single source of that information;
being information that the skilled person mentioned in subsection (2) could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood and regarded as relevant to work in the relevant art in the patent area."
(Emphasis added.)
34 The primary judge did not appreciate, at the time he published his reasons for judgment, that it was s 7(3) as it stood at the priority date that applied to this proceeding, and not the current version of the section which was amended by the Patents Amendment Act 2001 (Cth).
35 The current version of s 7(3) is in the following terms:
"The information for the purposes of subsection (2) is:
(a) any single piece of prior art information; or
(b) a combination of any 2 or more pieces of prior art information;
being information that the skilled person mentioned in subsection (2) could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood, regarded as relevant and, in the case of information mentioned in paragraph (b), combined as mentioned in that paragraph."
36 The importance of the amendments to s 7(3) so far as this appeal is concerned lies in the excision of the requirement that the skilled person regard the information as relevant "to work in the relevant art in the patent area".
37 It should be noted that the expression the "patent area" is, and was at all relevant times, defined in the Dictionary (Sch 1 to the Act) as, essentially, Australia.
THE PRIMARY JUDGE’S REASONING
38 NutraSweet argued before the primary judge that the invention identified in the Ajinomoto patent was obvious, and therefore failed the inventive step test. In support of that contention, NutraSweet relied upon a prior art base which consisted of the common general knowledge as at the priority date, together with the information contained in a single document -- the Nofre Tinti specification.
39 It was common ground before his Honour that the Nofre Tinti specification was not, as at the priority date, part of the common general knowledge, within s 7(2). It followed that the only basis upon which the Nofre Tinti specification could be considered as part of the prior art base was if it fell within s 7(3). It was also common ground that unless the Nofre Tinti specification did form part of the prior art base, NutraSweet’s challenge based on obviousness would fail.
40 The primary judge appreciated that the information contained in the Nofre Tinti specification could not be considered as part of the prior art base unless the document satisfied all of the conditions stipulated in s 7(3). In his Honour’s reasons for judgment (at [44]-[46]), he found that those conditions were met but he did not address the requirement of s 7(3) in its earlier form that the information be "relevant to work in the relevant art" in Australia
41 The error was brought to his Honour’s attention after he published his reasons for judgment. He did not invite further submissions from the parties, but simply indicated that he would deal with the matter. Subsequently, he issued a corrigendum pursuant to which he replaced the current version of s 7(3), which he had set out in his original reasons for judgment, with s 7(3) as it stood at the priority date. He did not otherwise amend his reasons for judgment. He did not explain why, in his view, the additional requirement that the information be "relevant to work in the relevant art" in Australia had been met. He did not indicate whether that was because he construed that expression in a particular way, or whether he was satisfied, on the evidence, that the condition was met.
42 His Honour’s reasoning on the question of obviousness can be summarised as follows. He referred to s 7(2) and posited the relevant test as being whether, when compared with the prior art, the invention "would have been obvious to a person skilled in the relevant art in the light of the common general knowledge as it existed" at the priority date. He noted that this was to be assessed in light of the common general knowledge together with information in a document "publicly available" which the skilled person could "be reasonably expected to have ascertained, understood and regarded as relevant" and referred to the current version of s 7(3) in that regard.
43 The primary judge next observed that the test for obviousness under the Act differed from that under the Patents Act 1952 (Cth). Under the 1952 Act publications could not be taken into account if they did not form part of the common general knowledge: Minnesota Mining and Manufacturing Company v Beiersdorf (Australia) Ltd [1980] HCA 9; (1980) 144 CLR 253 at 292–293 per Aickin J. He said that by common general knowledge he meant knowledge that was in fact known or used by those who worked in the field of the invention. He said the approach under the former Act was regarded as too narrow, and that one purpose of the 1990 Act was to treat as part of the common general knowledge information publicly available anywhere in the world which the skilled person would find.
44 In construing s 7(3), his Honour first identified the characteristics of the person who was to decide obviousness. That was a "relevantly skilled person". This meant a person who had a "practical interest in the subject matter" of the invention: Catnic Components Ltd v Hill and Smith Ltd [1982] RPC 183 at 242 per Lord Diplock. His Honour found that this "practical interest" might entail a collection of skills and knowledge not found in an individual. Thus the relevant skilled person could be a team. In his Honour’s words (at [28]):
"The skilled addressee is a team which is interested in the investigation of artificial sweeteners (alone or in combination) for industrial application. What this entails is the selection, evaluation and blending of artificial sweeteners. This will require a rudimentary knowledge of chemistry, some of the skills of a food technologist, an understanding of the sensory evaluation of foods, particularly sweeteners, and some appreciation of the commercial use and application of artificial sweeteners. It is not necessary for any member of the team to have the knowledge of a chemist who creates new compounds for use as a sweetening agent."
45 Having identified the "skilled team", his Honour proceeded to deal next with a pivotal point raised by Ajinomoto, namely that there was not in Australia a relevantly skilled person who was able to judge the obviousness of the claimed invention. His Honour explained how the point arose (at [29]):
"According to the evidence, no research is undertaken in Australia to identify or evaluate new compounds which may be blended to improve their sweetness quality. That work is done overseas. So, according to the argument, there is no person or team in Australia skilled in the relevant art. The consequence alleged is that the attack based on obviousness must fail."
46 The primary judge rejected this submission as being inconsistent with both authority and principle.
47 With regard to authority he referred to Gambro Pty Ltd v Fresenius Medical Care South East Asia Pty Ltd (2004) 61 IPR 442 where, as his Honour pointed out, the relevant skilled person was an individual involved in the design and improvement of dialysis machines and where there was no such person in Australia. The primary judge noted that this did not lead Allsop J to conclude that there could be no skilled person who could judge the inventiveness of the claimed invention.
48 With regard to principle the primary judge said (at [31]):
"As regards principle, the argument rests on the unstated assumption, which I do not accept as correct, that a patent can only be struck down for lack of an inventive step if there is some industry in Australia which would be affected by the grant of the patent. First, the assumption reads into the legislation something which is not able to be implied. Second, I simply do not accept the view that when, as here, there is information in Australia, including information in widely circulated international textbooks and journals, which would ordinarily be referred to by a person interested in the area, that information should be ignored when deciding whether an invention is obvious. If such information were to be ignored Australia would become a resting ground for bad patents."
49 His Honour added (at [32]):
"In any event, as the evidence here demonstrates, although the selection, testing and manufacture of blended compounds for use as a sweetening agent does not take place in Australia, there are persons who work in closely related areas who do have an interest in and understanding of the relevant information. Moreover, major manufacturers of intense sweeteners conduct a large part of their research on a global scale and recruit scientists both locally and from other countries, including Australia. That is sufficient, in my view, to consider what would have been in the common general knowledge of the hypothetical skilled addressee."
50 The primary judge then went on to consider, on the merits, whether Ajinomoto’s claimed invention was obvious. He identified in an unexceptional way the various steps that would have to be followed in order to resolve that issue. He considered the position in England, and observed that the position in Australia under the Act was different. He traced the history of the Act back to the 1984 report of the Industrial Property Advisory Committee, Patents, Innovation and Competition in Australia (Report to the Honourable Barry O Jones MP, Minister for Science and Technology, Canberra, 29 August 1984) (the IPAC Report). It was at this point that he set out s 7(2) and (3) of the Act, and added that if a prior publication met each of the conditions contained in s 7(3) it would be considered along with the common general knowledge on the question of obviousness.
51 His Honour described the state of common general knowledge in Australia as at the priority date. He said that the search for an artificial sweetener that had taste characteristics as close to sucrose as possible, and which lacked the undesirable characteristics often associated with artificial sweeteners, had been going on for a considerable time. He said that no one artificial sweetener met all of the desired requirements for an ideal sweetener, especially when used in soft drinks. Importantly he found (at [41]):
"It was therefore common practice to blend intense sweeteners so that the limitations of one sweetener would be offset by the strengths of another. Blending of sweeteners had taken place since the 1960s."
52 The primary judge added that, as at the priority date, the characteristics of blended sweeteners were known. One characteristic was that blending could have a synergistic effect. It was not possible to predict with certainty whether a particular blend would have an additive or synergistic effect. For that reason, blending was described as a "complex" phenomenon, requiring sensory evaluation testing to be carried out. He said that the "odds" favoured a synergistic effect when certain known sweeteners were blended. Aspartame and Ace-K, in particular, were two compounds known for their synergistic effects when blended, especially when blended together.
53 His Honour reiterated that it was common ground that the Nofre Tinti specification was not part of the common general knowledge. He stated, however, (at [44]–[45]):
"It is nevertheless part of the information to be taken into account when considering what the skilled team would think and do. It is to be taken into account because it satisfies the conditions in s 7(3). As to this, the evidence is almost all one way. Each of Dr Bullock, Dr McBride, Dr Lindley and Mr Heyhoe said that if one were to embark upon a project to develop a new sweetener or sweetener blend, a search of the relevant patents would be undertaken. Dr Bullock is currently General Manager of the Sugar Research Institute in Queensland and has past experience as a patent examiner and chemist. He said that searches of patent and technical literature are a critical part of research and development. He explained that there were several obvious reasons for this, including "to familiarise the researcher with up to date developments, to provide inspiration and to ‘avoid reinventing the wheel’." He added that these searches were also necessary to verify that there was "freedom to operate" in the field. Mr Heyhoe, a food technologist with a background in research and development, also put the matter quite firmly. He said that if he had been engaged to develop a new sweetener or blend: "[I]t is inconceivable to me that a literature search which included a search of patent literature would not be done as part of that work."
Only one witness, Mr Garrett, suggested that a literature search might not be undertaken. I say Mr Garrett only "suggested" this because all he said in this regard was that in his work before the priority date as a teacher in food science and technology at the William Angliss Institute he did not read patents. It is, I think, clear that the reason Mr Garrett did not read patents was that his work did not require him to do so. It was enough that he read synopses of patents."
54 Having summarised the evidence, his Honour concluded (at [46]) that once it was accepted, as he did accept, that a patent literature search would have been undertaken by the skilled team, there was no doubt that the Nofre Tinti specification would have been "ascertained" and "understood". That meant that these two requirements in s 7(3) were met. His Honour added that, in the end, he believed that this was accepted by Ajinomoto.
55 His Honour then turned to the third requirement, which he identified as simply that the Nofre Tinti specification would be regarded as relevant. He stated (at [47]–[48]):
"On this point, Dr Bullock, Dr McBride, Mr Heyhoe and Dr Lindley said that they would have regarded the Nofre Tinti specification as relevant to the task of developing a sweetener or sweetener composition. Dr McBride is a consultant psychophysicist with 18 years’ experience in food research at CSIRO. He would have regarded it as relevant because he was aware beforehand that NutraSweet was developing a new generation sweetener. I think that what Dr McBride meant was the compounds in the Nofre Tinti specification were derivatives of aspartame, which was the most commercially successful artificial sweetener as at the priority date, and so were likely to be useful compounds. Moreover, one of the compounds, DMB-APM, had exceptional potency being 10,000 times as sweet as sucrose. Likewise, in Mr Heyhoe’s opinion the Nofre Tinti patent would have been regarded as relevant because "a new sweetener based on Aspartame identifying high sweetener intensities with excellent organoleptic properties and stability would be highly attractive to commercial manufacturers." Similar considerations motivated Dr Lindley to consider the Nofre Tinti compounds as relevant.
Importantly, of the various compounds described in the Nofre Tinti specification, DMB-APM would have been regarded as the most suitable for use as an artificial sweetener. Dr McBride described this compound as the "preferred" compound based on its high intensity sweetness, organoleptic properties and reported similarities to aspartame. The principal reason was its potency. Dr McBride said its high potency would have both cost benefits to manufacturers as well as regulatory advantages because regulators invariably prefer smaller quantities of additives. Dr Bullock also described DMB-APM as "the preferred compound". Even Dr Prescott was prepared to concede that the characteristics of DMB-APM made it "a promising candidate [for] a high intensity artificial sweetener." To be fair, Dr Prescott made this comment in relation to the use of DMB-APM alone, not in combination with other sweeteners. In my opinion the evidence is overwhelming that DMB-APM was a "promising candidate" for blending as well."
56 After a brief discussion of the position in the United States, his Honour stated his conclusion regarding the obviousness of the Ajinomoto patent. He said (at [53]–[54]):
"In my view the evidence does establish that it would reasonably have been expected that a blend comprising DMB-APM and aspartame or aceK, or DMB-APM, aspartame and aceK would give a sweetness quality closer to that of sucrose than any one of those compounds individually. The common general knowledge strongly suggested this result. So did the witnesses. Mr Heyhoe, in particular, was a good witness on this aspect. He said the odds were 70 per cent in favour of synergy. Dr Bullock, whose evidence was compelling on many aspects, also favoured the gambler’s approach and said the chance of a blend resulting in synergy was "odds-on". I also regard as important Dr Bullock’s evidence that his first choice for blending with DMB-APM would have been those sweeteners that had already had commercial success and shown synergy when used in blends. So, aspartame and aceK were primary candidates.
I think this is a clear case of obviousness. This result should not come as a surprise. As long ago as 1993, Dr Eric Walters, a chemist who worked in the field, predicted that "[t]he time may be coming when simply blending sweeteners is no longer patentable because of its obviousness": E Walters, "High-Intensity Sweetener Blends: Sweet Choices" [1993] Food Product Design 83, 84."
57 In reaching that conclusion, his Honour expressly rejected the evidence of Ajinomoto’s experts, Dr Prescott and Mr Garrett, to the effect that the skilled team would have found it surprising that the claimed invention gave a sweetness profile that was closer to that of sucrose. He explained that these experts had based their opinions upon taste profiles given in the Ajinomoto specification that did not accord with common general knowledge. In addition, he accepted the evidence of Dr Lindley and Mr Heyhoe, experts called on behalf of NutraSweet (at [55]). Their evidence was to the effect that the Ajinomoto taste profiles were simply incorrect. Those profiles exaggerated the negative aspects of DMB-APM, aspartame and Ace-K, and therefore overstated the positive aspects of the claimed invention.
58 As previously indicated, his Honour also dealt with NutraSweet’s challenge to the Ajinomoto patent based on lack of novelty (close, but not quite) and its challenge based on lack of utility (rejected). He did not deal at all with the challenge based upon manner of manufacture.
THE APPEAL TO THIS COURT
59 Broadly speaking, Ajinomoto submits that:
• the primary judge erred in permitting NutraSweet’s experts to give evidence as to obviousness;
• s 7(3) of the Act could not be invoked as the basis for reliance upon the Nofre Tinti specification because there was no "work in the relevant art in [Australia]"; and
• the Nofre Tinti specification was only able to be identified as "relevant" with hindsight and because the NutraSweet experts were provided with, and made aware of, the Ajinomoto patent.
60 In substance, these submissions give rise to two principal issues in this appeal. The first is whether, as a matter of construction, the expression "work in the relevant art in [Australia]" in s 7(3) means work that has actually been carried out in this country, or whether it extends to hypothetical work that could have been performed here. The second is whether, on the evidence before his Honour, there had been, before the priority date, any "work in the relevant art" in Australia (assuming that actual rather than hypothetical work is required by the section).
61 In relation to the question of construction, Ajinomoto contends that the language in s 7(3) should be given its ordinary and natural meaning. When the section refers to work, it means real work, and not work in the abstract. Accordingly, NutraSweet was required to demonstrate that such work was actually undertaken. NutraSweet, on the other hand, contends that the language in s 7(3), as it stood at the priority date, should be given a purposive construction. It submits that the term "work", when read in context, meant nothing more than work that might hypothetically be undertaken. On that basis, it made no difference whether there was evidence of such work having been carried out in Australia.
62 In relation to the question of evidence, Ajinomoto relies upon what it says are his Honour’s own findings to the effect that no work of the relevant kind was ever undertaken in this country. NutraSweet challenges that interpretation of his Honour’s reasons. It submits that the evidence pointed overwhelmingly to such work having been carried out in Australia.
CONSTRUCTION OF S 7(3)
History of obviousness as a basis for revocation
63 In Australia, obviousness only became a separate basis for the revocation of a patent after the Patents Act 1952 (Cth) was enacted: Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No 2) [2007] HCA 21; (2007) 235 ALR 202 at [44]. The early cases had made no distinction between novelty and obviousness. However, later cases describe patents that disclose only insignificant differences from prior art as lacking in "subject-matter", the forerunner to what later became the notion of lack of an inventive step.
64 The word "obvious" first emerged in patent law in the late nineteenth century. Lord Herschell, in Vickers, Sons & Co Ltd v Siddell (1890) 7 RPC 292 at 304 advocated the separation of novelty and subject-matter, and in relation to the latter, said:
"And the question remains, whether this ... was so obvious that it would at once occur to anyone acquainted with the subject, and desirous of accomplishing the end, or whether it required some invention to devise it."
65 The distinction between novelty and obviousness has remained unclear both doctrinally and in practice.
66 The early English and Australian patent statutes purported simply to restate the common law: Minnesota Mining at 289–290 per Aickin J. For example, in Australia, s 86(3) of the Patents Act 1903 (Cth) dealt with revocation by providing that every ground on which a patent might at common law be repealed by scire facias should be available as a ground upon which a patent could be revoked.
67 In England, amendments were made in 1932 to the Patents Designs Act 1907 (UK) expressly including, as a ground of revocation, that an invention "is obvious and does not involve any inventive step having regard to what was known or used prior to the date of the patent": see s 3 of the Patents and Designs Act 1932 (Imp), which inserted a new s 25(2) into the Patents Designs Act 1907 (UK). That constituted a different formulation of the old ground of "want of subject-matter" with the test becoming overtly qualitative rather than quantitative: Lockwood at [43]. Curiously, English courts did not regard s 25(2) as having changed the common law.
68 In 1944 a Departmental Committee, chaired by Sir Kenneth R Swan, was appointed in England to consider and report whether any, and if so, what changes were desirable to Patents and Designs Acts (the Swan Committee). The Swan Committee submitted its report in 1947 (Swan Committee, Patents and Designs Acts: Final Report of the Departmental Committee (Departmental Committee, London, 1947) and its recommendations included (at [228]) that subsections (e) and (f) of the statutory grounds for revocation should be as follows:
"(e) That, subject as in this sub-section provided, what is claimed in any claim of the complete specification was not new.
(f) That what is claimed in any claim of the complete specification was obvious and did not involve any inventive step, having regard to what was known or used before the priority date of the said claim."
69 The report of the Swan Committee led to the passing of the Patents Act 1949 (UK). However, s 32(e) and (f) of that Act did not follow the recommendations of the Swan Committee, but instead provided for grounds of revocation expressed as follows:
"(e) that the invention, so far as claimed in any claim of the complete specification, is not new having regard to what was known or used, before the priority date of the claim, in the United Kingdom;
(f) that the invention, so far as claimed in any claim of the complete specification, is obvious and does not involve any inventive step having regard to what was known or used, before the priority date of the claim, in the United Kingdom."
70 It is significant that the Parliament introduced the requirement, both in relation to novelty, and in relation to obviousness, that the knowledge or use that triggered these grounds of revocation be confined to knowledge or use "in the United Kingdom".
71 In Australia, s 100 of the Patents Act 1952 (Cth) replicated the territorial limitation set out in the 1949 United Kingdom statute by providing:
"(1) A patent may be revoked, either wholly or in so far as it relates
to any claim of the complete specification, on one or more of the followinggrounds, but on no other ground:-
...
(e) that the invention, so far as claimed in any claim, was obvious and did not involve an inventive step, having regard to what was known or used in Australia on or before the priority date of that claim;
...
(g) that the invention, so far as claimed in any claim, was not novel in Australia on the priority date of that claim;"
72 In Minnesota Mining, Aickin J stated (at 291) that the language of s 100 was, in all material respects, identical with that introduced by the Patents and Designs Act 1932 (Imp) which, as we have noted, was regarded in England as having merely reproduced the common law. His Honour regarded the Patents Act 1949 (UK) as having formulated the grounds for revocation differently to the way in which they were expressed in the Patents Act 1952 (Cth). However, it is significant that both the 1949 Act, and the 1952 Act, contained the territorial limitations to which we have referred.
The early doctrine of common general knowledge
73 By the early twentieth century, it had been established in England, that in considering obviousness, a court could have regard to any one publication in addition to "common general knowledge": Mullard Radio Valve Co Ltd v Philco Radio and Television Corp of Great Britain Ltd (1936) 53 RPC 323.
74 In Australia, before the 1952 Act, it was accepted that a prior publication, giving information that did not become part of common general knowledge, did not invalidate a subsequent patent unless it supplied enough information to enable a person of proper skill in the art to produce the mechanical device or appliance or carry out the process claimed in the later specification: Acme Bedstead Co Ltd v Newlands Brothers Ltd [1937] HCA 63; (1937) 58 CLR 689 at 707 per Dixon J.
Common general knowledge under the 1952 Act
75 Initially the test for "want of subject-matter" under the 1952 Act was interpreted very broadly as a comparison against everything disclosed by the literature on the subject: HPM Industries Pty Ltd v Gerard Industries Ltd [1957] HCA 47; (1957) 98 CLR 424 at 437–438 per Williams J. In Minnesota Mining the High Court restricted the basis for comparison to common general knowledge alone.
The Industrial Property Advisory Committee Report
76 The IPAC report, to which earlier reference has been made (see [50]), was commissioned shortly after Minnesota Mining was argued before the High Court, and before judgment was delivered. This wide-ranging report into Australia’s patent regime was delivered five years later in 1984 and formed the basis of the Patents Act 1990 (Cth).
77 The IPAC Report noted that "[i]nventiveness is usually determined by applying a test of obviousness, in the light of what previously has been done and disclosed." It continued (at [7.1]):
"Within these parameters, the precise requirements and methods of application of these criteria vary between individual countries. Generally, those in Australia...are less rigorous or ‘lower’, than in most other countries. The main respects in which the Australian requirements are lower are these. First, in relation both to novelty and to obviousness, regard is had only to what previously has been done and disclosed in Australia, whereas the international trend is to look also to what has gone on in other parts of the world, at least insofar as it is publicly recorded or reasonably readily ascertainable. Second, recent decisions of the High Court have held that obviousness is to be determined by having regard to the common general knowledge in the relevant art, and without regard to documents in existence but not part of the common general knowledge, whereas in most other countries all publicly available documents are treated as relevant.
...
The end point that is relevant here is that under the existing Australian law, standard patents, as well as petty patents, are obtainable for inventions which would not qualify for patents in many other countries, including Japan, the US, and EEC countries."
78 For this reason, the IPAC report recommended raising the level of invention required to support a standard patent in line with international standards:
"For the purpose of determining inventiveness, any single prior disclosure or use should be capable of being considered against the background of all that is common general knowledge in the relevant field of art. On this basis the requirement of inventiveness will not be fulfilled if the knowledge imparted by the disclosure or use, combined with what is common general knowledge in the art, would render the claimed invention obvious to a person reasonably skilled in the art.
However, it should not be possible for this purpose to combine two disclosures, two uses, or a disclosure and a use, where neither is within the common general knowledge of the art, except where one disclosure refers to another disclosure or use.
On the other hand, we see as being treated as within the common general knowledge of the art, not merely information which is generally known and used in the art, but also information publicly available in recorded form anywhere in the world which a skilled person working in the art at the relevant time should reasonably have been expected to find, understand, and regard as relevant.
...
Disclosures thus publicly available anywhere in the world, as well as all other publications in the more traditional understanding of that word in the patent context, should be part of the prior art base for the novelty and obviousness requirements of standard patents."
79 The IPAC Report therefore recommended that patent applications be assessed for obviousness against:
• the common general knowledge which includes disclosures in recorded form publicly available anywhere in the world which a skilled person working in the art at the time should reasonably have been expected to find, understand, and regard as relevant; and, if necessary,
• any single document in recorded form which is publicly available anywhere in the world or oral disclosures, openly made, or known uses in Australia, and, if cross-referenced, two such disclosures or uses.
80 In effect, the IPAC Report recommended that the common general knowledge be restricted to those disclosures in recorded form that a skilled person working in the relevant field could reasonably have been expected to find, but that any additional disclosure in recorded form or known use not be so restricted. The additional disclosure or known use must simply be publicly available. If the additional disclosure were in recorded form, it might be publicly available anywhere in the world. If it were a "known use", it would have to be in Australia. Importantly, the IPAC Report did not suggest that there be any limitation of the kind ultimately enacted in 1990 when s 7(3) was first introduced.
The 1990 Act
81 The Federal Government was not prepared to adopt such a broad definition of the prior art base. However, it "raised the threshold of inventiveness", compared with the 1952 Act, by requiring consideration not only of what was "known or used" but also of additional information which was publicly available: see s 7(2) and (3) as enacted in 1990, and as they appeared at the priority date.
82 Contrary to the recommendations of the IPAC Report, s 7(3) of the Act restricted the use of additional publicly available (non-common general knowledge) documents to those that could be expected to be "ascertained, understood and regarded as relevant to work in the relevant art in [Australia]" by the hypothetical skilled addressee.
83 Thus the types of publicly available documents that could be used to broaden the prior art base were qualified in two ways. First, the information contained in those documents had to be reasonably expected to be found, understood and regarded as relevant. Second, the skilled addressee would have had to regard that information as relevant "to work in the relevant art in [Australia]". That is, the requirement of relevance was itself qualified. The document had to have a particular type of relevance. The section did not make clear what was intended by this second qualification.
84 There is no reference to the expression "work in the relevant art in [Australia]" in the explanatory memorandum to the Patents Bill 1990 which simply states (at [13] and [15]):
"An invention is taken to involve an inventive step unless the invention would have been obvious to a person skilled in the relevant art. In assessing whether an invention involves an inventive step, publicly available information from a prior document or prior use may be considered together with the common general knowledge, provided that the information would have been ascertainable, understandable and seen as relevant by a person skilled in the relevant art...The prior art base for standard patents will include documents published anywhere in the world."
85 In the second reading speech, the Honourable Senator Robert Ray, Minister for Defence, said that the most significant changes introduced by the 1990 legislation were those that improved Australia’s "international competitive position". In particular, he mentioned that:
"the standard of patentability for standard patents is strengthened by testing inventions for novelty and inventive step against disclosures in recorded form anywhere in the world rather than, as at present, just in Australia."
86 Therefore, while it is clear that the 1990 Act was intended to allow international documents to be considered in assessing obviousness, these extrinsic sources shed no light on the meaning of the phrase "relevant to work in the relevant art in [Australia]."
The 2001 Amendments
87 The requirement in s 7(3) that the information in question be "relevant to work in the relevant art in [Australia]" was excised by the Patents Amendment Act 2001 (Cth). Neither the explanatory memorandum nor the second reading speech in relation to the amending Act explains why.
88 The Explanatory Memorandum states that:
• the Bill removes references to "in the patent area" from s 7(1) and (2);
• a person skilled in the art will no longer be restricted to a person skilled in the art in Australia; and
• common general knowledge will no longer be restricted to common general knowledge in Australia.
89 In the second reading speech, the Parliamentary Secretary to the Minister for Industry, Science and Resources, the Honourable Warren Entsch, said that the new legislation would:
• expand the prior art base by removing the "in Australia" restriction on oral disclosures, uses and common general knowledge;
• increase the standard of proof an applicant is required to meet in convincing the Commissioner of Patents of novelty or the inventive step to the "balance of probabilities"; and
• require applicants to provide the Commissioner with the results of searches of the prior art base that they have conducted.
90 NutraSweet, confronted with the difficulty that the amendment to s 7(3) must have been carried out for some reason, proffered the submission that it may have been motivated by a desire to keep that section in line with s 7(1)(b) and (2). However, s 7(1)(b) deals with novelty, and s 7(2) deals with common general knowledge without the assistance of any additional piece of prior art information. Moreover, the extrinsic material explains why the territorial limitation was removed in relation to those two matters, but is notably silent in relation to why there should be a change to the conditions under which regard can be had to a publicly available document as a supplement to common general knowledge.
91 Ajinomoto offered a different hypothesis. It submitted that the requirement that there be "work in the relevant art in [Australia]" must have been deleted from s 7(3) because the Parliament recognised that it imposed an undue constraint upon the use of publicly available material which ought to be considered, in conjunction with common general knowledge, when determining obviousness. Ajinomoto submitted that whilst the Parliament may have been entirely justified in arriving at that conclusion, nonetheless NutraSweet’s application for revocation of its patent had to be determined in accordance with the statutory regime that applied as at the priority date. Upon the proper construction of s 7(3), the Nofre Tinti specification did not qualify as a document that could be considered in determining whether or not the Ajinomoto patent revealed an inventive step.
The effect of amending legislation upon the construction of an unamended Act
92 In determining the meaning to be given to s 7(3) in its unamended form, it is necessary to consider the effect of amending legislation upon the construction of an earlier Act. Grain Elevators Board (Vic) v Dunmunkle Corporation [1946] HCA 13; (1946) 73 CLR 70 is an appropriate starting point. In that case, Dixon J, after considering whether the appellant Board was subject to local government rates under legislation that had subsequently been amended to expressly (but only partially) exempt it, said (at 86):
"It would be a strange result if we were to interpret the prior legislation as giving a wider exemption than that conferred by the [later] provision so that the express exemption it makes would prove unnecessary and the qualifications it places upon that exemption would be futile."
93 The principle to which Dixon J alluded in Dunmunkle has been applied on many occasions.
94 In Hunter Resources Ltd v Melville [1988] HCA 5; (1988) 164 CLR 234 Dawson J said (at 254–255):
"In Grain Elevators Board (Vict.) v. Dunmunkle Corporation Dixon J. expressed the view that an amending Act might be taken into account in the interpretation of the prior legislation, at least to avoid a result that would render the amending legislation unnecessary or futile."
(Footnote omitted.)
95 Dawson J, however, went on to make express reference to the limitations of this reasoning. For example, his Honour referred to the decision of the House of Lords in Ormond Investment Co v Betts [1928] AC 143 which discussed the construction of ambiguous legislation that had subsequently been amended. Lord Buckmaster (at 156) considered the following statement by Lord Sterndale MR from Cape Brandy Syndicate v Inland Revenue Commissioners [1921] 2 KB 403 at 414 to be an accurate expression of the law:
"I think it is clearly established in Attorney-General v Clarkson that subsequent legislation on the same subject may be looked to in order to see what is the proper construction to be put upon an earlier Act where that earlier Act is ambiguous. I quite agree that subsequent legislation, if it proceed upon an erroneous construction of previous legislation, cannot alter that previous legislation; but if there be any ambiguity in the earlier legislation then the subsequent legislation may fix the proper interpretation which is to be put upon the earlier."
(Footnote omitted.)
96 When amending legislation is used to assist in the proper construction of earlier legislation, it must be used with caution. In Allina Pty Ltd v Federal Commissioner of Taxation (1991) 28 FCR 203 at 212 the Full Federal Court (Lockhart, Burchett and Gummow JJ) warned of the limitations of such use:
"There was some debate before us as to the circumstances in which courts are entitled to examine a later statute to determine whether it throws any light upon the interpretation of an earlier statute. Plainly this course can be taken when the words of the earlier statute are ambiguous, but if the words of the earlier statute are clear, little assistance may be gained from the later statute. Also, care must be exercised to ensure that the words in the later statute have not been inserted to remove possible doubts".
97 In DC Pearce and RS Geddes, Statutory Interpretation in Australia (6th ed, Butterworths, 2006), the learned authors observe (at [3.34]) that in Allina the Court had to interpret a provision of the Income Tax Assessment Act 1936 (Cth) as it stood prior to its amendment by a later Act. Not discerning any ambiguity in the words in question, it declined to interpret them by reference to the amending words. See also Sun World Inc v Registrar, Plant Variety Rights (1997) 75 FCR 528 at 541–542.
98 In Interlego AG v Croner Trading Pty Ltd [1992] FCA 624; (1992) 39 FCR 348 at 382, Gummow J, with whom Black CJ and Lockhart J relevantly agreed, reiterated the need to ensure that the amending legislation was not merely intended to remove doubt:
"There is a line of authority that an amendment may be taken into account in determining the scope of the prior legislation, at least to avoid a result which would render the amendment unnecessary, or futile or deficient ... . But in doing so, caution should be exercised .... It is, after all, a curious way of revealing parliamentary intention at the time of passing the earlier provision. As was observed by Viscount Haldane LC in Re Samuel [1913] AC 514 at 526:
‘It is not a conclusive argument as to the construction of an earlier Act to say that unless it be construed in a particular way a later enactment would be surplusage. The later Act may have been designed, ex abundante cautela, to remove possible doubts.’"
99 In Hepples v Federal Commissioner of Taxation [1992] HCA 3; (1991) 173 CLR 492 at 539–540 McHugh J expressed similar misgivings.
Resolution of construction issue
100 The question is whether the phrase "work in the relevant art in [Australia]" in s 7(3) (as it stood at the priority date) should be understood as requiring evidence of actual work in that art in this country, or whether it should be read simply as though the words "if any" appeared after the word "work".
101 Because the question is one of construction it must be resolved by reference to the language used by the Parliament, but read in the legislative context. Regard must be had to the history of the Act and the object the language was intended to achieve: see Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation [1981] HCA 26; (1981) 147 CLR 297. See also s 15AA of the Acts Interpretation Act 1901 (Cth).
102 As Dawson J observed in Mills v Meeking [1990] HCA 6; (1990) 169 CLR 214 at 235:
"[T]he literal rule of construction ...must give way to a statutory injunction to prefer a construction which would promote the purpose of an Act to one which would not, especially where that purpose is set out in the Act."
103 In CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 Brennan CJ, Dawson, Toohey and Gummow JJ observed that:
"... the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses "context" in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy. Instances of general words in a statute being so constrained by their context are numerous. In particular, as McHugh JA pointed out in Isherwood v Butler Pollnow Pty Ltd, if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance. Further, inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which, by the steps identified above, is reasonably open and more closely conforms to the legislative intent."
(Footnotes omitted.)
104 As previously indicated, the 1990 Act was enacted in response to the 1984 IPAC Report which recommended an expanded prior art base against which obviousness was to be assessed. However, the recommendations contained in the IPAC Report were not adopted in their entirety. When enacted, s 7(2) and (3) expanded the available prior art base for an obviousness challenge, but did so only to a limited degree, and specifically with a territorial qualification.
105 As we know the territorial limitation in s 7(3) was removed in 2001. The expression "patent area" was also removed from s 7(1)(b), which deals with novelty. However, the expression "as it existed in the patent area" was retained in s 7(2), which deals with the meaning of an "inventive step", and s 7(4) which deals with the meaning of an "innovative step".
106 The question then is, why was the territorial limitation removed from s 7(3)? On NutraSweet’s case, this was done merely in an effort to achieve symmetry with the change made to s 7(1)(b), although that dealt with an entirely different basis for revocation, and was the subject of specific explanation in the extrinsic material.
107 Ajinomoto argues that prima facie, the words of a statute should be given their ordinary and natural meaning. It contends that there was never anything unclear or ambiguous about the expression "relevant to work in the relevant art in [Australia]". It argues that, in the context of s 7(3), as it then stood, the word "work" meant exactly what it said. It was a precondition to the use of any information, over and above the common general knowledge, that work of the relevant kind had been undertaken in Australia. Where, as Ajinomoto submitted, no such work had been undertaken in this country, no single document (such as the Nofre Tinti specification) could be added to the common general knowledge to expand the prior art base.
108 Ajinomoto further argues that where the words of a statute are clear and unambiguous, the Court should not have regard to extrinsic materials as an aid to construction. That submission does not accord with s 15AB of the Acts Interpretation Act or with modern principles of interpretation. In any event, Ajinomoto submits, there is nothing in the extrinsic material which is contrary to its primary position.
109 Ajinomoto next submits that the amendment of s 7(3), and the removal of the territorial limitation originally contained therein, must be regarded as having been intended to achieve some effect. It relies upon Dunmunkle in support of that submission. It also refers to what the Full Court of the Federal Court said in Harris v Repatriation Commission (2000) 62 ALD 161 at [54]:
"There is authority that amending legislation can be taken into account in the interpretation of prior legislation, at least to avoid a result that would render the amending legislation unnecessary or futile".
110 It also refers to the following passage from Hooker v Gilling (2007) 48 MVR 136 where McColl JA stated (at [43]–[44]):
"I would also note that an amending Act can be taken into account in the interpretation of the prior legislation, to avoid a result that would render the amending legislation unnecessary or futile: Grain Elevators Board (Vic) v Dunmunkle Corporation [1946] HCA 13; (1946) 73 CLR 70 at 86 per Dixon J; Austereo Ltd v Trade Practices Commission [1993] FCA 301; (1993) 41 FCR 1 at 13–14[1993] FCA 301; ; 115 ALR 14 at 25-6 per Gummow J. The rationale of this proposition is that "it is permissible to ascertain the intention of the legislature with regard to prior legislation by reference to amending legislation": Hunter Resources Ltd v Melville [1988] HCA 5; (1988) 164 CLR 234 at 254–5[1988] HCA 5; ; 77 ALR 8 at 22 per Dawson J; see also Deputy Federal Commissioner of Taxes v Elder's Trustee and Executor Co Ltd [1936] HCA 64; (1936) 57 CLR 610 at 624–626[1936] HCA 64; ; [1937] ALR 27 at 31-2 per Dixon, Evatt and McTiernan JJ.
This proposition is not unlimited. It is said to apply when the words of the earlier statute are ambiguous: Allina Pty Ltd v FCT (1991) 28 FCR 203 at 212; 99 ALR 295 at 303 per Lockhart, Burchett & Gummow JJ. And, it should be noted that there may be the difficulties involved in using an amending Act to construe earlier legislation: Commissioner of State Revenue v Pioneer Concrete (Vic) Pty Ltd (2002) 209 CLR 651; 192 ALR 56; [2002] HCA 43 at [52] per Gleeson CJ, Gummow, Kirby, Hayne JJ."
111 Put simply then, Ajinomoto’s position is as follows. Section 7(3), on its proper construction, requires a party seeking to rely upon the enlarged prior art base to establish, inter alia, that there was, at some point, work in the relevant art in Australia. That condition was included in the section when enacted in 1990 although it was not mentioned in the IPAC Report, and was not in the draft Bill or discussed in the explanatory memorandum. We must take it that there was a reason for its inclusion in s 7(3) when enacted. Moreover, there had to be a reason for its excision in 2001. NutraSweet’s explanation that the limitation was excised simply to keep s 7(3) in line with s 7(1)(b) is unconvincing. The Parliament referred specifically to the reason for amending s 7(1)(b), but made no mention of any reason for amending s 7(3). In any event, as has been noted, s 7(1)(b) deals with novelty, and serves a manifestly different purpose from s 7(3).
112 The construction for which Ajinomoto contends is supported by the fact that it gives the noun "work" its ordinary and natural meaning. Unlike the construction for which NutraSweet contends, it does not require any qualifying words, such as "if any", to be read into the section.
113 There is textual support for Ajinomoto’s submission. If the word "work" were given an expanded meaning so that it included hypothetical work (that is work that was never in fact undertaken in Australia), it is difficult to see why the territorial limitation would ever have been included in the first place. The fact that the skilled addressee must of necessity be a hypothetical figure (rather like the reasonable person) does not mean that the reference to "work" must also be hypothetical. The first is a construct. The second is a noun, capable of being grounded in reality. If one were to accept NutraSweet’s submission, the qualifying phrase, though entirely pointless, would have been included in s 7(3) in 1990 simply to achieve some loose symmetry with the surrounding provisions in s 7(1)(b) and s 7(2). In other words, a meaningless phrase was incorporated merely to achieve an aesthetic outcome.
114 In Pearce and Geddes, (2006) the learned authors state (at [2.22]) that as a general principle no word or sentence in an Act should be regarded as superfluous or insignificant. All words must, prima facie, be given some meaning and effect. This is, however, subject to the overriding consideration that it may be impossible to give a full and accurate meaning to every word. In such cases it is the duty of the court to give the words the construction that produces the greatest harmony and the least inconsistency.
115 In Minister for Resources v Dover Fisheries Pty Ltd [1993] FCA 366; (1993) 43 FCR 565 at 574 Gummow J observed that it was "improbable that the framers of legislation could have intended to insert a provision which has virtually no practical effect". His Honour added that in such a case the court should look to see whether any other meaning produces a more reasonable result.
116 NutraSweet contends that there is a somewhat prosaic explanation for the omission of the territorial limitation in s 7(3) when the Act was amended in 2001. It notes that the original aim was to amend all aspects of s 7 in order to "raise the threshold for obtaining a patent": Senate Economics Legislation Committee, Consideration of Legislation Referred to the Committee: Patents Amendment Bill 2001 (Parliament of the Commonwealth of Australia, Canberra, August 2001) at [1.4], [1.5] and [1.21]–[1.29]. Relevantly, it was initially proposed to amend s 7(2) by expanding the prior art base and removing the "domestic" restriction on common general knowledge (by excluding from s 7(2) the words "in the patent area"). Indeed, the legislative history suggests that it was proposed initially to amend s 7(3) to repeal that subsection in its entirety, and replace it with a provision similar to that which applies in the United Kingdom.
117 However, the proposed amendments were not adopted. While the prior art base was expanded, the "domestic" restriction on common general knowledge was retained in s 7(2). Section 7(3) was retained, but redrafted to exclude the phrase "to work in the relevant art in the patent area". This new form of s 7(3) was first proposed in a second reading of the Patents Amendment Bill 2001 in the Senate on 27 September 2001. The extrinsic materials do not indicate why, when s 7(3) was recast, the phrase was not retained.
118 NutraSweet argues that, having regard to the peculiar circumstances surrounding the amending legislation, resort to the amending Act does not assist in interpreting the earlier form of s 7(3). It submits that there is nothing in the extrinsic material relating to the amending legislation which suggests that the amendment to s 7(3) was brought about by a desire on the part of Parliament to avoid a parochial policy which no longer made any sense. NutraSweet submits that, in the words of the primary judge, if Ajinomoto’s construction were to be accepted, Australia would be a resting ground for bad patents (at least in relation to those patents granted prior to 2001).
119 The expression "relevant to work in the relevant art in [Australia]" should, in our view, be given its ordinary and natural meaning. There is no conflict, when construing this phrase, between a textual approach and a purposive approach. It must be remembered that a purposive approach is not to be equated with an approach that the Court regards as reflecting sound policy. The question is always one of ascertaining the legislative intent. This is done by considering the language and structure of the Act, as well as its objects.
120 In the present case, it may be that the legislature made bad law when it enacted s 7(3) in its original form but that does not entitle the Court, under the guise of a purposive analysis, to distort the ordinary and natural meaning of the language used by introducing a notion conspicuously absent from the text, namely the idea of hypothetical work.
121 There may be some force in NutraSweet’s argument that the territorial limitation came to be excised from s 7(3) by sheer accident when the amendments proposed in the 2001 Bill were not accepted during the course of debate. There are cases where last minute changes to a draft bill have produced peculiar, and unintended, results. This may detract somewhat from the force of Ajinomoto’s reliance upon the Dunmunkle principle.
122 Nonetheless, it must be remembered that the task of a court when construing a statute is not to seek to ascertain the subjective intention of those who voted to enact the Bill. It is rather to discern from the structure, content and text of the statute, including its evident purposes, an objective intention which should be imputed to the legislature. The fact that s 7(3), in its pre-2001 form, may have reflected a parochial, and unwise, approach to the establishment of a prior art base cannot dictate the proper construction of the critical phrase. It is difficult to accept that when the words in question were included in 1990 they were not intended to serve any purpose. It is also difficult to accept that those words were only removed in 2001 because it finally dawned upon the legislature that it had mistakenly included them, for no apparent purpose. Had this been the reason for the deletion of this expression, one would have expected some reference in the extrinsic material to that fact.
123 The idea that giving these words their ordinary and natural meaning would lead to the conclusion that, prior to 2001, Australia was potentially a "resting ground for bad patents" may in fact provide the explanation as to why these words were ultimately deleted. Of course, there is nothing in the extrinsic material which indicates that this was so. Nor, however, is there anything to the contrary. All that can be said is that the general tenor of that material favoured a broadening of the prior art base. That meant that at least after 2001 Australia would approach the question of obviousness in a manner more cognisant of the fact that scientific developments are now appreciated on a global basis.
EVIDENCE OF WORK IN AUSTRALIA
124 Our acceptance of Ajinomoto’s submission regarding the proper construction of s 7(3) does not mean that it is entitled to succeed in this appeal. As previously indicated, the primary judge did not explain why his finding as to obviousness was not affected by his having discovered that he had applied the wrong version of s 7(3) when considering the prior art base.
125 Ajinomoto says that the effect of his Honour’s findings regarding the question of "work" in Australia was that no such work had been undertaken. It focuses, in particular, upon his Honour’s observation (at [29]) that, according to the evidence, no research was undertaken in Australia to identify or evaluate new compounds capable of being blended to improve their sweetness quality. It focuses also upon his conclusion (at [32]) that the selection, testing and manufacture of blended compounds for use as a sweetening agent did not take place in Australia.
126 As we have noted, the primary judge was unconcerned by these findings. He regarded Ajinomoto’s claims as being met by the fact that there was information in Australia, including information in widely circulated international text books and journals, which would ordinarily be referred to by a person interested in a particular area. Moreover, there were persons, in this country, who "work in closely related areas" and who have an interest in and understanding of the relevant information (at [32]).
127 It may be doubted whether these were, in all respects, adequate answers to Ajinomoto’s contentions. However, his Honour went further. He found as a fact (at [41]) that it was "common practice" to blend intense sweeteners so that the limitations of one sweetener will be offset by the strengths of another. He also found that blending of such sweeteners had taken place since the 1960s.
128 Although he did not say so in terms, it is implicit in his Honour’s reasons for judgment that such blending had taken place in Australia. We say that because there was ample evidence to that effect, and it was uncontradicted.
129 NutraSweet’s experts’ evidence on this topic was as follows. Doctor Robert McBride, a consultant psychophysicist based in New South Wales, stated that his work included assessing sweeteners and sweetener compositions and product research and development. This work was done in relation to consumer acceptance of artificial sweeteners in products for such clients as Pepsico and Johnson & Johnson. He said that artificial sweeteners were used in a wide range of products, but their largest commercial application by far was diet soft drinks. According to Dr McBride the objective of those working in the research and development of artificial sweetener compounds is to improve sweet taste by synthesising new sweetener compounds that achieve a taste profile closer to that of sucrose. He stated:
"Using new chemical entities is one way of improving sweetening properties for food and beverage products. The other way is by blending the existing sweetening compounds. Blending is done on a routine basis by food technologists and product developers in the food and beverage manufacturing industry, both in Australia and overseas."
(Emphasis added.)
130 Thomas Heyhoe, a food industry consultant based in Victoria, gave evidence to a similar effect. He stated that using combinations of intense sweeteners in order to overcome the deficiencies of particular intense sweeteners had been the common practice of food technologists and product formulators since at least the 1960s. He further stated that it had been "routine practice in the food and beverage manufacturing industry for more than 40 years". He said that it was general knowledge, both to himself and to others involved in the use and evaluation of intense sweeteners, as at 10 March 1997, that using sweeteners in combination was likely to result in an improved taste profile. He stated, however, that:
"While formulating new products using sweetener combinations is widely undertaken in Australia, the research and development of new sweetener compounds is, and was as at 10 March 1997, undertaken by international corporations such as NutraSweet, Pfizer, Hoechst, Tate & Lyle and Johnson & Johnson."
131 Under cross-examination Mr Heyhoe acknowledged that he had never been involved in inventing intense sweeteners. Rather, all of his work had been with known sweeteners.
132 Dr Graeme Bullock, the General Manager of the Sugar Research Institute in Queensland and a physical chemist, was also called to give evidence by NutraSweet. He stated that since at least the 1960s food product manufacturers had overcome the taste limitations of saccharin by blending it with a less intense sweetener, cyclamate. He said that combinations of sweeteners are, and have long been, well known for showing synergy, including aspartame and saccharin, aspartame and AceK, and the three-way combination of AceK, aspartame and saccharin. Under cross-examination Dr Bullock again stated that "the blending of intense sweeteners is a comparatively common practice, going back for many, many years". He acknowledged, however, that he had no particular experience of actually blending intense sweeteners.
133 Dr Michael Lindley, a food technology consultant from the United Kingdom, testified that blending had long been a standard practice when it came to using sweeteners. He stated that saccharin and cyclamate blends were the norm through the 1960s until cyclamate was banned in the United States and in the United Kingdom. He described the multi-sweetener approach as having been a "routine procedure" for those involved in the development and use of new sweeteners.
134 Under cross-examination Dr Lindley acknowledged, however, that he did not know any Australian companies that were, or are, involved in the research and development of new sweeteners.
135 Mr Colin Garrett, a food technologist based in Victoria, gave evidence on behalf of Ajinomoto. He stated that new artificial sweeteners were developed overseas, and that so far as he was aware, no new artificial sweeteners were being developed in Australia either before or after 10 March 1997. He said that food technologists in Australia, including himself, use the sweeteners that have been developed overseas and then made available in this country "in product development at a practical level". He said he was aware that saccharin and cyclamate blends were being used in Australia as at 10 March 1997.
136 Mr Garrett also stated that he had been involved in blending saccharine and cyclamates in the context of carbonated beverages, in his work at Cohns Industries Ltd, which was based in Swan Hill. He said that during his time at Cohns he:
"... worked on the formulation of low energy (i.e. low calorie) carbonated beverages using artificial sweeteners.... I conducted research into the use of artificial sweeteners in carbonated beverages with the object of creating soft drinks with low calorie content but with taste characteristics as close as possible to their higher calorie counterparts. Other work conducted by me involved research into extending the shelf life of soft drinks and into the stability of specific ingredients, including artificial sweeteners, to ensure that they were suitable for soft drinks."
137 Dr John Prescott, a chemosensory scientist based at James Cook University in Queensland, was also called to give evidence on behalf of Ajinomoto. He stated that as at 10 March 1997 he was aware that artificial sweeteners with different characteristics were sometimes used in combination, or "blended", for the purpose of seeking an improved overall sweetener profile, or a lower overall cost. He stated, however, that the research and development resources required to discover and develop a new artificial sweetener would only be available to a major international company. He said that as far as he was aware, as at 10 March 1997 and at the time he gave evidence, every new artificial sweetener had been developed overseas.
138 Under cross-examination, Dr Prescott agreed that prior to March 1997 it was quite common to blend intense sweeteners to achieve an improvement in their sweetness quality and to overcome deficiencies that were known to exist. However, he disagreed that it was more common than not to do so. The following exchange then took place between Dr Prescott and counsel for NutraSweet, Mr Caine SC:
"Do you agree, first of all, that before aspartame came to Australia in 1983, that saccharine and cyclamates were used as artificial sweeteners in carbonated beverages?---Yes.
Then I want to put to you that after aspartame came to Australia and was approved for use, it was blended with saccharine in carbonated beverages?---Yes.
And it was blended with saccharine overseas in carbonated beverages, and that was reported in the literature?---Yes.
Then ace K was approved I think in about the mid 1980s, for soft drinks?---I’ll take your word for that, yes.
By about the middle of 1994, or certainly by the end of 1994, aspartame and ace K had been used on a substantial scale in Australia in carbonated beverages?---My understand[ing] is that it was 1996 that it was introduced.
By 1996 the two major manufacturers of carbonated beverages, Pepsi and Coca Cola, were using aspartame and ace K in their beverages. Do you accept that?---I – my understanding is that it was introduced in 1996, yes.
I put it to you that it was used by Pepsi prior to 1996 – that is, aspartame and ace K in combination – prior to 1996?---I am not aware of that.
Coca Cola was using it in its carbonated beverages by the middle of 1996?---I accept that.
So by 1996 each of Pepsi and Coke had converted to using aspartame in conjunction with ace K in carbonated beverages?---In Australia, yes.
Aspartame and ace K had been used overseas in carbonated beverages by that time as well?---In some countries, yes.
It had not been used – that is, aspartame had not been used in conjunction with Pepsi and Coke, I think, in the United States, because there was an established taste regime for those products. Do you accept that?---Yes.
So it was not considered desirable to move away from that established taste?---Yes.
But it was reported in the literature that aspartame and ace K were being used in carbonated beverages in European countries?---I believe that’s the case.
And in Canada?---I’m not sure.
You’d agree, wouldn’t you, that so far as carbonated beverages are concerned, Pepsi and Coke – or so far as diet beverages are concerned, Pepsi and Coke have by far and away the lion’s share of the market in Australia?---Yes.
So once those two players had resolved and indeed adopted the use of aspartame and ace K, it’s quite right to say that aspartame and ace K had been used on a very wide scale in Australia?---Once they were adopted, yes.
And that was prior to March 1997, was it not?---Yes."
139 The fact that no new sweetener molecules or compounds were developed in Australia, either before or after the priority date, seems to be undisputed. It also seems to be undisputed that as at the priority date no research was being undertaken in Australia for the purposes of developing new sweetener compounds. However, the evidence as set out above demonstrates that known intense sweeteners have been blended in Australia for many years. In particular, for some time before the priority date known sweeteners had been blended for the purposes of diet soft drinks.
140 The difficulty with Ajinomoto’s submission that there was no "work in the relevant art in [Australia]" is that the Ajinomoto patent is not concerned with the discovery or invention of a new sweetener compound or molecule. Rather, it is concerned with the blending of known sweeteners, or, as the patent itself describes the invention, with "a sweetener composition". Once the art relevant to the Ajinomoto patent is identified as being the art of blending known sweeteners, it becomes clear that there was in fact "work in the relevant art in [Australia]" as at the priority date.
141 It follows that, irrespective of the view taken of the proper construction of s 7(3), there was no impediment to the reception of the evidence of the witnesses called by NutraSweet regarding the issue of obviousness. The requirement in s 7(3) that there be "work in the relevant art in [Australia]", as it stood at the priority date, does not create any barrier to the use of such evidence to expand the prior art base when dealing with that issue.
REMAINING SUBMISSIONS ON BEHALF OF AJINOMOTO
142 This leaves two further submissions on the part of Ajinomoto to be addressed. The first is that the evidence given by the experts called by NutraSweet was insufficient to establish obviousness. That was because, insofar as that issue was concerned, obviousness required the Nofre Tinti patent to be incorporated in the prior art. According to Ajinomoto this could not be done without the use of hindsight, namely knowledge of the Ajinomoto patent. Allied to this submission, it was said that there was nothing in the Nofre Tinti patent which would have made it "stand out" from amongst many other sources of information that would have been gathered at the priority date had the relevant searches been conducted at that time.
143 Mr Hess SC, on behalf of Ajinomoto, stressed that this submission was made on the basis of the evidence led at the trial. He referred to his cross-examination of the NutraSweet witnesses, and what he submitted were concessions on their part that there were many different compounds thrown up by the searches conducted on behalf of each party, and that there was nothing distinctive about DMB-APM (the compound now known as Neotame). In other words, it was submitted that the only reason these experts alighted upon the Nofre Tinti patent, and regarded it as "relevant" to work in the relevant art was because they were aware of the Ajinomoto patent. This was said to be a classic example of the impermissible use of hindsight.
144 The argument was developed as follows. The evidence before the primary judge regarding searches notionally undertaken as at the priority date came from two witnesses, Mr Robert Kemp on behalf of NutraSweet, and Mr Anthony Jennings on behalf of Ajinomoto. Mr Hess elected to reduce the scope of these searches to manageable proportions, and the prior art was said to be contained within exhibits R-6 to R-13 in the trial. The Nofre Tinti specification was contained within exhibit R-11. Neotame was but one of numerous compounds contained within exhibits R-6 to R-13.
145 All that was reported in the Nofre Tinti specification was that compound six (out of some 20 or so referred to in that specification) had a sweetness potency of 10,000 times of sucrose. Compound six is, of course, DMB-APM or Neotame.
146 It was submitted on behalf of Ajinomoto that none of NutraSweet’s experts were qualified to consider the possibility of synthesis of new compounds, which as a matter of logic, had to be added to the compounds to which reference was made in exhibits R-6 to R-13. They may have been skilled in the evaluation of existing sweeteners, and perhaps even in their blending, but this was not sufficient. The work of Messrs Kemp and Jennings threw up prior art which did nothing but reveal patentable synthesised new compounds. There was nothing to choose from among those compounds. The skill which Ajinomoto brought to its invention lay in its decision to use compound six in the Nofre Tinti patent, blended with other well-known sweeteners, to achieve the results claimed in its own patent.
147 Ajinomoto complained that there was no evidence from any of the NutraSweet witnesses as to what a person, relevantly skilled in the art, would have done having carried out the kinds of searches performed by Messrs Kemp and Jennings. It was noted that in Lockwood the High Court emphasised that the person skilled in the art, faced with a presenting problem, had to look forward from the prior art base, and there had to be evidence of what that person would do when faced with such a problem. Moreover, in order for a challenge based on obviousness to succeed, the evidence of what that person would do would have to be regarded as very plain.
148 Ajinomoto accepted that there was evidence from each of the NutraSweet witnesses that they would have conducted searches. It also accepted that the Nofre Tinti specification would have come to light as result of such searches. However, it submitted that there was nothing to indicate that, in that event, the Nofre Tinti specification, and in particular compound six, would have been seen as the solution.
149 Ajinomoto pointed out that the searches would have produced a raft of compounds, including all those described in exhibits R-6 to R-13. There were many of these. It was submitted that there was no evidence from any of NutraSweet’s witnesses as to what would have happened next. That was said to be fatal to NutraSweet’s case.
150 Using the language of s 7(3), Ajinomoto accepted that the Nofre Tinti specification would have been "ascertained". In addition, it accepted that the Nofre Tinti specification would have been "understood", at least treating the skilled persons as a team. However, in Mr Hess’ terms the flaw in NutraSweet’s case came at the next stage. Even assuming that it could be shown that there was work in the relevant art in Australia, further evidence was required in order to establish obviousness. NutraSweet had to demonstrate that compound six, within the Nofre Tinti specification, "stood out from the crowd" and, it was said, there was no evidence to that effect.
151 The transcript of the argument in the appeal is illuminating. When Mr Hess was asked why compound six had to "stand out", his answer was that otherwise it "does not become relevant". When challenged regarding that proposition, given that the requirement of relevance in s 7(3) seemingly involved a relatively low threshold, he referred to a passage in the judgment of Tamberlin J in NSI Dental Pty Ltd v University of Melbourne (2006) 69 IPR 542 at [201] where his Honour stated:
"I am not persuaded on the evidence of the skilled addressee(s) that it could have been reasonably expected that these three articles would have been ascertained by persons skilled in the relevant art before 12 March 1997. Nor am I satisfied that a skilled addressee would have been expected to treat them as relevantly a single source or that any particular attention would have been paid to them."
152 His Honour’s observation regarding the lack of "particular attention" having been paid to the relevant articles, in the particular case before him, can scarcely be elevated to a definitive requirement that the information "stand out" in the way put by Mr Hess.
153 Nonetheless, Mr Hess adhered to his submission that, in the absence of evidence explaining how the Nofre Tinti specification was to be selected from many others, and compound six to be selected from those within that specification, relevance simply could not be established. It would then follow, Mr Hess submitted, that the Nofre Tinti specification could not be used to supplement common general knowledge. NutraSweet’s challenge based on obviousness would therefore fail.
154 According to Mr Hess, he confronted each of the NutraSweet witnesses with the prior art, and asked them, on the assumption that they knew nothing about the Ajinomoto patent, to explain how compound six, or indeed the Nofre Tinti specification as a whole, stood out from the crowd. He submitted that none of them could answer that question. It followed, so he submitted, that the Nofre Tinti specification could not be made relevant, within the meaning of s 7(3).
155 In our view, Mr Hess’ submission must be rejected. There was ample evidence at the trial from the NutraSweet witnesses that having conducted the relevant searches, they would have looked for some new high potency intense sweetener which might blend with other typically used compounds. The Nofre Tinti specification identified compound six as having a potency of 10,000. Mr Hess asked rhetorically, why pick 10,000? Why not pick 5,000 or 3,000? But as, we shall see, the evidence provided answers to these rhetorical questions. Mr Hess also noted that there were a number of compounds which had high potency. Exhibit R-7, for example, listed 116 compounds, a number of which had potencies in excess of 10,000. None of these were DMB-APM. All of them predated that compound. It followed, so Mr Hess submitted, that potency, as an indicator, would be of no assistance.
156 Subsequently, during the course of oral submissions, Mr Hess refined his argument somewhat. He contended that even assuming that the Nofre Tinti specification could be regarded as "relevant", so too, and equally relevant, were all other pieces of prior art that would have been thrown up by the searches. He reiterated his submission that, in the absence of any evidence that any of NutraSweet’s witnesses would have been drawn to the Nofre Tinti specification among that myriad of options, all that those witnesses could point to in this case was obviousness based on hindsight. He reminded the Court of what Aickin J in Minnesota Mining had to say regarding the ease with which a safe can be opened once one has the combination.
157 Mr Hess’ submission is not borne out by the evidence before the primary judge. For example, Dr McBride said that had he been asked by a client in March 1997 to find and evaluate high intensity sweeteners for commercial application, he would have undertaken a review of the technical literature. He would have asked his client to provide him with any relevant patent specifications, or arrange for a patent search to be conducted by a technical searcher. He had no doubt that such a search, conducted at that time, would have identified the Nofre Tinti specification. He said that he would have understood that document to be relevant to the task specified.
158 Dr McBride explained that although he had not heard the name "Neotame" as at March 1997, he was aware that NutraSweet was developing a "new generation" sweetener. He said that he would have been interested in the compound described on page 7 at line 16 of the Nofre Tinti specification (which is in fact compound six) because it is described as having a sweetening potency of up to 10,000 times that of sucrose. In addition, that compound had the greatest sweetening potency of any of the compounds listed in the specification, and appeared to be "the preferred compound" in that specification. He noted that the compound in question was described in the specification as having "identical organoleptic properties" to those of aspartame. That would have led him to the conclusion that the compound was likely to be suited for uses in which aspartame was also used. In the Australian context that meant the compound would have been expected to be suitable to be used in soft drinks, both alone and in combinations.
159 Mr Hess submitted that Dr McBride had resiled, somewhat, from this position under cross-examination. Whether or not that is so is largely a matter of impression. In any event, it was not just Dr McBride who said that DMB-APM would have seemed to be the preferred compound, certainly within the Nofre Tinti specification, and by implication, within the range of information that would have been produced, had a technical search been conducted.
160 Dr Bullock stated that he would have read the Nofre Tinti specification, in March 1997, as expressing a preference for compound six, as well as compounds 12 and 18, over all others referred to therein. He described compound six as being "a particularly advantageous embodiment of the invention". The primary judge referred to his evidence in that regard, when he described Dr Bullock as having described DMB-APM as the "preferred compound" of the Nofre Tinti specification. Indeed Dr Bullock noted that compound six was at least four times more potent than the other compounds listed. This would have made it attractive to people formulating commercial food products.
161 The primary judge also noted that even Dr Prescott, who was called on behalf of Ajinomoto, accepted that the characteristics of DMB-APM made it "a promising candidate [for] a high intensity artificial sweetener". His Honour concluded (at [48]) that the evidence was "overwhelming" that DMB-APM would not only be a promising candidate, in isolation, but also for blending as well.
162 Mr Hess submitted that all of this evidence was flawed, and should have been disregarded. First, it was confined to the Nofre Tinti specification, and in his submission each of these witnesses only focussed upon that specification as a result of impermissible hindsight. They were given the document. They did not discover it independently by their own endeavours. Next their evidence was confined to the Nofre Tinti specification. They did not consider the vast array of prior art that included many other compounds. Finally, none of these witnesses could themselves differentiate compound six from the other compounds mentioned in Nofre Tinti when pressed on this point.
163 We are unable to accept these submissions. The evidence clearly establishes that, when confronted with the task of seeking out an artificial sweetener that was closer to sucrose than existing sweeteners, a technical search would soon have uncovered the Nofre Tinti specification. Plainly, that specification would have been read, and understood, by persons skilled in the art of blending artificial sweeteners. Equally plainly, compound six would have "stood out" as a prime candidate, if not the obviously preferred compound. That is sufficient to satisfy the requirements of s 7(3). There is no "hindsight" involved in looking at the Nofre Tinti specification, and reconstructing what these witnesses would have made of it in 1997.
164 It follows that the appeal in relation to the revocation of the
Ajinomoto patent must be dismissed. There is therefore no need
to deal with the
Notice of Contention. That leaves the amendment appeal to be determined at a
future date.
Given that a good part of the argument was taken up by the
construction point, on which Ajinomoto was successful, the Court will direct
that parties file and serve written submissions on the question of costs.
Associate:
Dated: 17
March 2008
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URL: http://www.austlii.edu.au/au/cases/cth/FCAFC/2008/34.html