Smith & Nephew Pty Ltd v Wake Forest University Health Sciences [2009] FCAFC 142 (9 October 2009)

Last Updated: 15 October 2009

FEDERAL COURT OF AUSTRALIA

Smith & Nephew Pty Ltd v Wake Forest University Health Sciences [2009] FCAFC 142

INTELLECTUAL PROPERTY – product combination claim – whether mere collocation of integers – where integer not part of the combination of the invention is an essential integer of the claim but not as a limitation – not all essential integers fail to interact to produce functional result desired – patent invalid

PRACTICE & PROCEDURE – evidence – objection not taken below to conclusory statement by expert – objection not taken as to expertise of expert – cannot object on appeal

PRACTICE & PROCEDURE – interlocutory appeal – disposition on appeal


Patents Act 1990 (Cth)

Australian Broadcasting Corporation v O’Neill [2006] HCA 46; (2006) 227 CLR 57 cited
British Celanese Ltd v Courtaulds Ltd (1935) 52 RPC 171 cited
British United Shoe Machinery Company Ltd v Fussell & Sons Ltd (1908) 25 RPC 631 distinguished
Cenefill Pty Ltd v Australian Sheetpiling Pty Ltd and Others (1996) 35 IPR 64 cited
Firebelt Pty Ltd v Brambles Australia Ltd [2002] HCA 21; 188 ALR 280 followed
Firebelt Pty Ltd v Brambles Australia Ltd [2000] FCA 1689; 51 IPR 531 followed
Fisher & Paykel Healthcare Pty Ltd v Avion Engineering Pty Ltd [1991] FCA 434; (1991) 103 ALR 239 followed
Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd [2001] HCA 8; (2001) 207 CLR 1 cited
Re Klaber’s Patent (1906) 23 RPC 461 cited
Minnesota Mining and Manufacturing Co v Beiersdorf (Australia) Ltd [1980] HCA 9; (1980) 144 CLR 253 followed
Palmer v Dunlop Perdriau Rubber Co Ltd [1937] HCA 43; (1937) 59 CLR 30 followed
Pugh v Riley Cycle Co Ltd (1914) 31 RPC 266 distinguished
Wake Forest University Health Sciences v Smith and Nephew Pty Ltd [2009] FCA 630 cited

Bodkin, C.L. Patent Law in Australia (2008)

SMITH & NEPHEW PTY LTD (ACN 000 087 507) v WAKE FOREST UNIVERSITY HEALTH SCIENCES and KCI MEDICAL AUSTRALIA PTY LTD
(ACN 056 073 468)
VID 458 of 2009

FINN, BENNETT AND MIDDLETON JJ
9 OCTOBER 2009
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION	VID 458 of 2009

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

SMITH & NEPHEW PTY LTD (ACN 000 087 507) Applicant

AND:	WAKE FOREST UNIVERSITY HEALTH SCIENCES First Respondent KCI MEDICAL AUSTRALIA PTY LTD (ACN 056 073 468) Second Respondent

JUDGES:	FINN, BENNETT AND MIDDLETON JJ
DATE OF ORDER:	9 OCTOBER 2009
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1. Leave to appeal be granted.
2. The appeal be allowed.

3. The order of Ryan J made on 15 June 2009 be set aside, and in lieu thereof it be ordered that the application for interlocutory injunction be dismissed.

4. The respondents pay the applicant’s costs of the application for leave to appeal and of the appeal.

5. The parties within 7 days provide to the Full Court written submissions as to the costs of the application before the primary judge.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION	VID 458 of 2009

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:

SMITH & NEPHEW PTY LTD (ACN 000 087 507) Applicant

AND:	WAKE FOREST UNIVERSITY HEALTH SCIENCES First Respondent KCI MEDICAL AUSTRALIA PTY LTD (ACN 056 073 468) Second Respondent

JUDGES:	FINN, BENNETT AND MIDDLETON JJ
DATE:	9 OCTOBER 2009
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

THE COURT

INTRODUCTION

1 This is an expedited application for leave to appeal and appeal heard together from an interlocutory judgment whereby the applicant is the subject of an injunction: see Wake Forest University Health Sciences v Smith and Nephew Pty Ltd [2009] FCA 630. The injunction prevents the applicant from entering the negative pressure wound therapy market until the determination of the proceedings, currently expected to be heard in June 2010.

2 No party argued that the primary judge expressed the incorrect approach in considering whether there was a serious question to be tried.

3 On this question, the primary judge said (at [12]):

In my view, the existence or otherwise of a serious question to be tried can turn either on a perceived difficulty faced by a plaintiff or applicant in making out some element of the cause of action, or on an assessment of the strength or weakness of a defence to the cause of action which the defendant or respondent claims to be available. In some cases, the existence of a serious question may depend on an evaluation of each of these aspects in combination. In the present case, the applicants would have been entitled, in the absence of evidence affirmatively supporting a challenge to the validity of the Patent, to rely solely on their long and undisturbed enjoyment of the Patent and the establishment in some other jurisdictions of the validity of patents in substantially similar terms.

4 The question for our determination is whether or not the applicant sufficiently demonstrated before the primary judge that claim 49 of the patent was invalid, thereby raising a defence to infringement which would prevent there being a serious question to be tried.

5 We have come to the view that the applicant has demonstrated on the evidence presently before the Court, and upon the basis of the construction of claim 49 put forward by the respondents, that the trial judge should have treated claim 49 of the patent as invalid and erred in granting the interlocutory injunction.

6 Before considering his Honour’s reasons, it is useful to understand the patent and its subject apparatus. The patent in suit is for an apparatus for applying negative pressure to a wound. The second respondent has since 1996 produced and marketed in Australia under the trademark ‘V.A.C.’ a system of negative pressure wound therapy which utilises a suction pump to create negative pressure in the area of a patient’s wound and a foam dressing which is sealed in the wound by means of an adhesive dressing. The pump is connected to the wound by tubing through which the negative pressure is applied.

7 The interlocutory application before the primary judge was fought solely on the question of whether claim 49 had been infringed, and it was in this context that the question of invalidity arose. Accordingly, the crucial question on validity concerned claim 49. If that claim is invalid, there is no infringement and the applicant is not entitled to an injunction.

8 Claim 49 reads:

An apparatus for applying negative pressure to a wound beneath a fluid-impermeable seal comprising: a screen means for positioning beneath said seal for preventing overgrowth of tissue in the wound, said screen means being sufficiently porous to allow gases to reach the wound and sufficiently rigid to prevent wound overgrowth, said screen means comprising an open cell polymer foam section configured to overlie the wound such that said negative pressure is maintained within said foam and applied to the wound; a flexible tube having an inlet and inserted into said open cell polymer foam section and an outlet end for extending from beneath said seal and for supplying said negative pressure; and wherein said apparatus is in an aseptic package.

9 It is not in dispute that the integers of the claim, apart from the aseptic package, interact to form a combination. It is not in dispute that the aseptic package plays no part in the application of negative pressure to a wound. The issue is whether claim 49 consists of a ‘mere collocation’ of the combination and the package or whether the package is simply a limitation on the scope of the claim that does not affect the ability to patent the invention under s 18(1) of the Patents Act 1990 (‘the Act’).

PRIMARY JUDGE’S FINDINGS

10 In discussing the principles to be applied in determining whether to grant an injunction, the primary judge rehearsed (at [10]) the following passage of Gummow and Hayne JJ (with support from Glesson CJ and Crennan J) from Australian Broadcasting Corporation v O’Neill [2006] HCA 46; (2006) 227 CLR 57, where their Honours said (at [65]):

The relevant principles in Australia are those explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd [(1968) [1968] HCA 1; 118 CLR 618]. This Court (Kitto, Taylor, Menzies and Owen JJ) said that on such applications the court addresses itself to two main inquiries and continued [(1968) [1968] HCA 1; 118 CLR 618 at 622-23]:

The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief ... The second inquiry is ... whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted.

By using the phrase "prima facie case", their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. That this was the sense in which the Court was referring to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument [(1968) [1968] HCA 1; 118 CLR 618 at 620] . With reference to the first inquiry, the Court continued, in a statement of central importance for this appeal [(1968) [1968] HCA 1; 118 CLR 618 at 622]:

How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks.

11 There was considerable debate before us on whether his Honour properly assessed the competing interests of infringement and invalidity. The applicant argued that his Honour failed to find that the respondents’ case of infringement was weak and that, were the evidence to remain the same at trial, the respondents would ultimately fail. When it came to undertake the evaluative exercise, the applicant says that his Honour erred in favouring the case for infringement over invalidity.

12 However, it was properly accepted by the respondents that if claim 49 was ‘a mere collocation’ of integers rather than a combination (which they did not accept), then claim 49 would be invalid and no serious question of infringement would arise. It is on that matter that we consider the primary judge fell into error.

13 The primary judge said (at [34]):

34 A specific ground on which Smith & Nephew attacks the validity of the Patent is that, insofar as it can be characterised as a "combination patent", it consists only of integers revealed by the prior art which do not interact with each other to produce a new result or product. Rather, they were said to comprise, in the language of the High Court in Firebelt Pty Ltd v Brambles Australia Ltd [2002] HCA 21; (2002) 188 ALR 280, at 285, a "mere collocation of separate parts." Their Honours there approved the analysis of Aickin J in Minnesota Mining and Manufacturing Co v Beiersdorf (Aust) Ltd [1980] HCA 9; (1980) 144 CLR 253, at 266 and 293. In the first of those passages his Honour observed;

‘The patent thus claimed is a combination patent in the proper sense of that term, ie it combines a number of elements which interact with each other to produce a new result or product. Such a combination may be one constituted by integers each of which is old, or by integers some of which are new, the interaction being the essential requirement.’

... ... ... ... ... ... ... ... ...

14 The primary judge then concluded that the issue of novelty raised difficult questions in the light of a prior publication, the Bagdautinov article, and that in view of the competing arguments on novelty, this contributed significantly to his conclusion that there was a serious question to be tried.

CONSIDERATION

15 It seems to us that the primary judge failed to consider, as a separate matter from novelty, the issue of whether claim 49 comprised a ‘mere collocation of separate parts’ and was therefore invalid.

16 A mere collocation of parts, each performing its own separate function, is not patentable. However, a claim may validly combine a number of elements which interact with each other to produce a new result or product. Such a combination may be one constituted by integers each of which are old, or by integers some of which are new, the interaction being the essential element: Minnesota Mining and Manufacturing Co v Beiersdorf (Australia) Ltd [1980] HCA 9; (1980) 144 CLR 253 at 266 per Aitkin J, and Firebelt Pty Ltd v Brambles Australia Ltd [2002] HCA 21; (2002) 188 ALR 280 at [21].

17 As we have indicated, it was accepted by all parties that the integers of claim 49, other than the aseptic package, interact with each other to produce a new product and result. However, the respondents submitted the fact that the aseptic bag does not interact with the other integers of claim 49 does not render the claim ‘a mere collocation’. They submitted that the only effect of including an additional integer such as the aseptic bag is to limit the claim, without affecting the invention in the combination claimed, referring to Pugh v Riley Cycle Co Ltd (1914) 31 RPC 266 per Lord Moulton at 283 and British United Shoe Machinery Company Ltd v Fussell & Sons Ltd (1908) 25 RPC 631 at 659 lines 35 to 45.

18 However, the respondents did not support a construction of the claim as a limitation of the scope of the claim. Rather, they supported a construction of a limitation on the apparatus itself. The aseptic bag was contended to be a feature of the apparatus in a kit form.

19 In this case, the respondents’ contention is that, as a matter of construction, the aseptic package is an essential integer of the combination the subject of the claim. They accept that it does not limit the apparatus in its use, the application of negative pressure. They sought to adopt a "fall-back" position that the package is a limitation on the scope of the claimed monopoly, an optional addition. However, the construction advanced was not of an optional addition. Put another way, the invention claimed by the respondents pursuant to s 18(1) of the Act included the package as an essential integer. In putting forward this construction, the respondents must be confined to that construction both for the purpose of applying s 18(1)(a) (manner of manufacture) and s 18(1)(b) (novelty): see Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd [2001] HCA 8; (2001) 207 CLR 1 Gleeson CJ, McHugh, Gummow, Hayne and Callinan JJ at [21] and footnote 37.

20 It is on this basis we consider the authorities and their application to the construction of claim 49 as contended for by the respondents before the primary judge.

21 In Palmer v Dunlop Perdriau Rubber Co Ltd [1937] HCA 43; (1937) 59 CLR 30 at 73 Dixon J (as he then was) elaborated on the notion of a collocation of integers. His Honour first cited with approval the speech of Lord Davey from Re Klaber’s Patent (1906) 23 RPC 461 where his Lordship said (at 469):

A proper combination for a patent is the union of two or more integers, every one of which elements may be perfectly old, for the production of one object which is either new, or at any rate is for effecting an old object in a more convenient, cheaper or more useful way. But the point in a combination patent must always be that the elements of which the combination is composed are combined together so as to produce one result.

(emphasis added)

22 Justice Dixon discussed what would amount to a patentable combination and what would not, the essential consideration being directed to what the claimed invention, the result of the combination, is designed to achieve. His Honour said (at 73):

... the characteristic which a combination of known integers must posses in order to afford subject matter is mutual relation in the operation of such integers. Separate elements may be brought together and yet each may continue to operate as it did before. In other words, all that the patentee may have done is assemble together things or ideas which apart from sequence, order, position and proximity of association continue to perform their known functions as before. He may in such a case have produced a more convenient and a better appliance or process but he has contributed nothing in doing so which amounts to invention.

23 His Honour (at 75) also cited Lord Tomlin in British Celanese Ltd v Courtaulds Ltd (1935) 52 RPC 171 at 194:

In truth and in fact there is no inter-related working between the integers in the sense that any one of the integers is doing something which it could not do without the presence of one or more of the others.

24 Thus, for the claim of a combination patent to remain valid, the integers must interact to bring about the desired result -- in this matter, the application of negative wound pressure.

25 There is no doubt that claim 49 is a claim to a combination. The question is whether each of the integers of the claim interact to produce negative wound pressure. It is to be asked how, if at all, does the aseptic package interact with the other integers to produce the result of negative wound pressure. It is the mere bag in which the device that ‘does the work’ is stored before use. It is discarded before any negative would pressure is applied. No doubt it is beneficial to have sterile packaging for a therapeutic device, however, the aseptic bag itself does nothing to cause, limit or affect the functional result of negative wound pressure as desired.

26 We observe that claim 49, in talking of an apparatus for applying negative pressure, should be contrasted with, for instance, claim 36 which talks in terms of an apparatus for facilitating the healing of wounds. The aseptic package may facilitate the healing of wounds, but it has nothing to do with the application of negative pressure, the function of the apparatus itself.

27 As indicated above, the respondents pointed to two authorities in support of the submission that the additional integer of claim 49 did not affect its validity. However, those authorities are relevant to an additional integer that limits the scope of the claim, not an integer said to limit the invention.

28 The respondents first pointed to the speech of Lord Moulton in Pugh 31 RPC 266. There his Lordship noted (at 282) the presence in the claim of two limitations neither of which ‘had any bearing whatever on the question of subject matter for Letters Patent’. The limitations his Lordship noted (at 283), were of no use as an element of the invention. Lord Moulton said (at 283):

To put it in legal language, the lubricator is not an element of the combination, but a mere addition to it. It co-operates in no way with the rest of the combination. ... Such an addition is, to my mind, much the same as though a man who thought he had invented a new pair of spectacles, attempted to strengthen his Patent by claiming them only in a case. The only effect of naming such an addition in a claim is to limit the claim without affecting the invention (if any) in the combination claimed. It affects the claim because the Patentee has only asked for the limited monopoly where the addition is present, and he cannot get more than he has asked for. But it does not better his invention, because it is not an element of a combination but merely an optional addition to the article made.

29 The second case relied on was British United Shoe 25 RPC 631. There the English Court of Appeal said (at 659):

... Mr Terrell argued, that assuming the first eight lines of the 5th Claim describe a new combination, the next four lines go on to describe something else, which he says does not act in combination with that which is described in the first eight lines. I will assume that in that he is right. He said that makes the Patent bad; that is to say, he affirms that, if a man in substance says that he claims a particular combination to be used in connection with something else which he goes on to state, because the two together do not constitute that which is, as I’ve defined it, a combination, the Patent is bad. I do not see the argument at all. It appears to me that it only comes to this, -- Granted that Claim 5 describes two things which cannot properly be all called a combination, it does describe that which is properly called a combination and limits the Claim by saying: "I only claim the use of that combination in connection with "another combination." I know of no reason why the patentee should not do that. Why should he not claim a new combination when used in a particular way but not in every way? Why is he bound to claim it when used in every way? I know of no answer to those questions.

30 In Colin Bodkin, Patent Law in Australia (2008) at [2440] reference is made on British United Shoe and Pugh as follows:

Where a combination of features is claimed, one or more of which (or a combination of some of them) is new, the claim is not invalid merely because one or more of the features has no working interrelationship with the new feature (or the new combination of features) (British United Shoe). The patentability of the claim (but not its scope) will depend only on the patentability of the new feature or features (Pugh).

31 However, what is clear about these two authorities is that they are entirely dependent on the construction of the patent claims. In neither case was the addition or limitation construed or contended by the patentee as an essential feature of the combination as claimed. In neither case did the addition or limitation have any bearing on the question of the subject matter of the claims, a matter specifically referred to by Lord Moulton in Pugh 31 RPC 266 at 282 lines 41-3.

32 We note that the specification does state that the apparatus is preferably packed in a sterile condition to avoid the need for sterilisation of the apparatus prior to use. However, claim 49 has specifically been drawn to include the aseptic package which was asserted before the primary judge to be an essential integer of the combination of the claim. The aseptic package should not in these circumstances be treated as a mere optional addition within the claim or as a limitation on the scope of the claimed combination. Therefore, all the integers of claim 49 are to be considered in determining whether claim 49 is a ‘mere collocation’.

33 Once the aseptic package is said by the respondents to be an essential integer and part of the invention claimed, it must interact purposefully and functionally with the other integers to produce the negative wound pressure. It may be said that it has a purpose--to ensure sterility in treating the wound--but it lacks any desirable functional result in the way described by Dixon J in Palmer [1937] HCA 43; 59 CLR 30 and Aicken J in Minnesota Mining [1980] HCA 9; 144 CLR 253.

34 Unlike the case of Pugh 31 RPC 266, for instance, the aseptic package is not an optional extra merely assisting in the presentation of the apparatus, or limiting or adding to the claim. Rather, it is claimed to be an essential feature crucial to the claimed invention and therefore must interact with that apparatus. While the integers that form the actual apparatus might be said to be a new combination, when placed with the essential feature of the aseptic package being part of the invention claimed they form a mere collocation of the apparatus on the one hand and the aseptic package on the other.

35 As can be seen, the resolution of the question of the invalidity of claim 49 depends upon the proper construction of claim 49. It is a matter of looking at the ‘language in the claims’ to determine whether a patentable combination exists, and to determine the co-operation of features, each of which may be known, to produce a new result or a known result in a more useful way: see Firebelt Pty Ltd v Brambles Australia Ltd [2000] FCA 1689; (2000) 51 IPR 531 at [20]. However, as we have indicated, before the primary judge, for the purposes of their arguments on novelty and manner of manufacture, the respondents contended for a particular construction.

36 We consider that the above approach is consistent with the analysis undertaken in considering a combination claim in Fisher & Paykel Healthcare Pty Ltd v Avion Engineering Pty Ltd [1991] FCA 434; (1991) 103 ALR 239 (per Black CJ, Lockhart and Gummow JJ) and applied in Cenefill Pty Ltd v Australian Sheetpiling Pty Ltd and Others (1996) 35 IPR 64 (per Kiefel J).

37 It was submitted in Fisher & Paykel that one integer (integer "b") of the claim did not have the necessary working relationship with the other integers (at p 252).

38 The Full Court made the following observation (p 256):

It has become the practice in a claim for a combination of common integers, to set out in considerable detail the elements or integers. Failure to do so may result in want of compliance with s 40. Also, those drafting such claims should do so in the light of the prior art; this may make them rightly fearful of claiming too much, as Lord Upjohn pointed out in Rodi and Wienenberger AG v Henry Showell Ltd [1969] RPC 367 at 392. Accordingly, as his Lordship also emphasised, there is a need for caution in accepting in an infringement suit the suggestion by the patentee that what appears to be a limitation upon the claimed subject matter is merely the product of a slip of the pen and thus not to be held too readily against the patentee.

39 The Full Court then concluded after a construction of the claim, that integer "b" was essential.

40 It then dealt with the submission that the claimed combination, if so interpreted, would be bad because essential integer "b" was functionally independent of the other integers, so that there was no working interrelation brought about by the collocation of integers.

41 After referring to passages in Palmer v Dunlop Perdriau Rubber Co Ltd [1937] HCA 43; (1937) 59 CLR 30, the Full Court, on the assumption that integer "b" was essential to the claim, came to the view that each integer did interact so that there was provided an entirety which was a patentable combination (at p 257). Thus the attack on validity failed.

42 Whilst the Full Court was considering the grant of a patent under the Patents Act 1952 (Cth), the Full Court applied the principles applicable to combination claims relevant to the Act.

43 In this appeal the respondents have put forward a construction claiming the aseptic package as an essential integer of the combination claimed as the invention. Upon this basis, the only remaining question in this appeal was whether there was a working interrelation brought about by the collocation of integers claimed. On this question, we have found there was not a patentable combination.

44 Therefore, the primary judge should have found that the applicant sufficiently demonstrated that claim 49 was invalid, and no serious question to be tried arose.

OTHER ISSUES

45 There are a number of further observations we should make in light of the submissions presented to us in this appeal.

46 First, the applicant submitted that on the evidence referred to by his Honour, the respondents had no prospect of proving the presence of, at least, the allegedly essential function integer of claim 49, that the screen must be ‘sufficiently rigid to prevent wound overgrowth’.

47 The evidence to which his Honour expressly referred was that of Dr Wilkins, a biomechanical engineer. As to claim 49, Dr Wilkins said by way of conclusionary comments:

In my opinion, based on the materials that I have reviewed, a foam dressing kit as featured in the information sheet at Mr Connor’s exhibit BC-3 would have each of the features of claim 49.

48 This was the only relevant evidence of infringement and the features of claim 49. The evidence of Mr Connor did not take the matter any further.

49 No specific admissibility objection was taken to the conclusionary comment of Dr Wilkins, nor was objection taken to the expertise of Dr Wilkins so as to make his evidence inadmissible. We consider that it is too late in this application to take such specific objections, particularly as to the existence or otherwise of the relevant expertise of Dr Wilkins.

50 In these circumstances, we have proceeded on the basis that the evidence would have been sufficient to prove an infringement of claim 49 if that claim were not invalid.

51 Second, the applicant sought to argue that the primary judge had, in effect, imposed on the applicant an obligation as a matter of law to ‘clear the way’, and relied too heavily on the fact that the applicant embarked on the alleged infringing conduct with its ‘eyes wide open’. We do not consider that the primary judge did raise either consideration to a proposition of law, or that he placed too much weight upon them.

52 We do, however, accept that it would be an error in considering whether the grant of an interlocutory injunction, in the context of an infringement claim, where the validity of the patent is in issue, to impose on a person who seeks to launch an alleged infringing product, an obligation to ‘clear the way’ by revoking the patent. Equally, the fact that a new entrant is prepared to take the risk of being restrained with its eyes wide open, should not be elevated beyond being a factor in the assessment of the many factors relevant to whether to grant an injunction.

CONCLUSION

53 For the above reasons, the primary judge should have concluded on the evidence before him and on the basis of the construction of claim 49 put forward by the respondents, that claim 49 was invalid, and that the respondents in these circumstances failed to demonstrate that there was a serious question to be tried.

54 We should stress that we have approached the question of the validity of claim 49 by reference to the evidence and submissions made as to the construction of claim 49 put forward by the respondents. We have not determined the validity of claim 49 finally, this being a matter for the primary judge at trial. We have merely arrived at the conclusion that the primary judge should not have granted the injunction in light of the evidence and the construction of claim 49 put forward by the respondents.

55 It is therefore appropriate to grant leave to appeal and allow the appeal. The respondents indicated that, if the appeal were allowed, it would be prepared to keep all necessary accounts.

56 The Court proposes to order:
Upon the respondent undertaking to the Court to keep all necessary accounts:
1. Leave to appeal be granted.
2. The appeal be allowed.

3. The order of Ryan J made on 15 June 2009 be set aside, and in lieu thereof it be ordered that the application for interlocutory injunction be dismissed.

4. The respondents pay the applicant’s costs of the application for leave to appeal and of the appeal.

5. The parties within 7 days provide to the Full Court written submissions as to the costs of the application before the primary judge.

I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Finn, Bennett and Middleton.

Associate:

Dated: 9 October 2009

Counsel for the Applicant:	Mr DK Catterns QC with Mr AJ Maryniak
Solicitor for the Applicant:	Blake Dawson
Counsel for the Respondents:	Mr B Caine SC with Ms H Rofe
Solicitor for the Respondents:	Freehills

Date of Hearing:	28 August 2009
Date of Judgment:	9 October 2009