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Federal Court of Australia |
Last Updated: 9 March 1998
Patents - Infringement - garden edging products - exclusive rights conferred on patentee to "exploit" invention - whether respondent exploited invention by making and by using the invention in the manufacture of garden edging - whether alleged infringer has omitted an essential integer - use of invention as a transitory step in the production of an article which in its final form differs from the patented invention - whether use of product was unimportant or trifling
Words and Phrases - "exploit", "make" and "use"
Patents Act 1990 (Cth) ss 13, 230, 233, Schedule 1
Olin Corporation v Super Cartridge Pty Ltd [1977] HCA 23; (1977) 14 ALR 149 (cited)
Nicaro Holdings Pty Ltd v Martin Engineering Co. (1990) 91 ALR 513 (cited)
Decor Corporation Pty Ltd v Dart Industries Inc. (1988) 13 IPR 385 (applied)
Catnic Components v Hill and Smith Limited [1982] RPC 183 (cited)
Radiation Ltd v Galliers & Klaerr Pty Ltd [1938] HCA 17; (1938) 60 CLR 36 (followed)
Walker v Alemite Corporation [1933] HCA 39; (1933) 49 CLR 643 (followed)
Populin v H B Nominees Pty Ltd [1982] FCA 45; (1982) 41 ALR 471 (cited)
Dunlop Pneumatic Tyre Co Ltd v British and Colonial Motor Car Co (1901) 18 RPC 313 (cited)
Badische Anilin und Son Fabrik v Chemische Fabrik vormals Sandoz (1903) 20 RPC 413 (cited)
Smith Kline & French v Attorney-General (NZ) (1991-1992) 22 IPR 143 (applied)
Saccharin Corp v Anglo-Continental Chemical Works Ltd (1900) 17 RPC 307 (applied)
Beecham Group Ltd v Bristol Laboratories Ltd (1978) 95 RPC 153 (cited)
Matter No. SG99 of 1996
BEDFORD INDUSTRIES REHABILITATION ASSOCIATION INC v PINEFAIR PTY LTD & ORS
VON DOUSSA J
ADELAIDE
5 MARCH 1998 IN THE FEDERAL COURT OF AUSTRALIA BETWEEN: Applicant AND: First Respondent
ronald john porter
Second Respondent JUDGE:
SOUTH AUSTRALIA DISTRICT REGISTRY SG 99 of 1996
bedford industries rehabilitation association inc
pinefair pty ltd
VON DOUSSA J DATE OF ORDER: 5 MARCH 1998 WHERE MADE: ADELAIDE
THE COURT ORDERS THAT:
(1) The applicant bring into Court minutes reflecting the Reasons for Judgment published this day.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
|
IN THE FEDERAL COURT OF AUSTRALIA | |
| SOUTH AUSTRALIA DISTRICT REGISTRY | SG 99 of 1996 |
|
BETWEEN: | bedford industries rehabilitation association inc
Applicant |
|
AND: | pinefair pty ltd
First Respondent
ronald john porter Second Respondent |
JUDGE:
VON DOUSSA j DATE: 5 march 1998 PLACE: ADELAIDE
The applicant seeks declarations, injunctions, and other remedies for infringement of Australian Patent No. 564517 ("the Patent") and for a breach of a Deed of Settlement and Release ("the Deed") between the applicant ("Bedford") and the respondents dated 1 July 1996.
Bedford is an incorporated and not for profit association in South Australia. Bedford's primary purpose is to provide vocational training, personal development and support to people with disabilities. Bedford seeks to fulfil its aim by conducting a variety of businesses in which it employs several hundred people with disabilities.
In September 1995 Bedford acquired certain assets of a company then known as Rolapak Pty Ltd which was in the process of being wound up. The assets included all assets in relation to a garden edging product known as "Rolapak Ezy-Edge" which had been manufactured by Rolapak Pty Ltd since 1982. The assets included all intellectual property relating to that product. In consequence of the acquisition Bedford became, and remains, the registered proprietor of the Patent.
In brief, Rolapak Ezy-Edge consists of generally half round elements of treated pine log, arranged side by side, and joined by two strands of wire affixed with staples along the flat rear face of the post elements. The two strands of wire by which the post elements are joined provide a continuous banding system which is applied to the post elements mechanically in an automated process. Rolapak Ezy-Edge generally comes in rolls of three metre lengths and is available in a variety of heights including 150 mm, 200 mm, 240 mm and 300 mm. A three metre roll has roughly 32 post elements. Rolapak Ezy-Edge is used as a retaining and decorative feature for edging garden beds. It is sold to major retailers and hardware chains throughout Australia.
The shareholding in the first respondent ("Pinefair") is owned by the second respondent, Mr Porter and his wife. Mr Porter is a director of the company, and it is admitted in the pleadings that he is in effective control of Pinefair's business. Pinefair's primary business is the manufacture of kit furniture and garden edging. In early 1992 Mr Porter saw garden edging manufactured by a company called Pine Tec, and approached Pine Tec with a view to Pinefair manufacturing the product for them. Pinefair did so over the next two years. The Pine Tec garden edging was manufactured by hand, each post element being joined to the next by a plastic joining piece separately stapled to adjacent post elements. Mr Porter attempted to develop a machine to automate the process but was not able to do so.
In mid 1995 Rolapak Pty Ltd approached Mr Porter to manufacture Rolapak Ezy-Edge, but whilst the proposal was still under consideration, Rolapak Pty Ltd went out of business, and the Rolapak Ezy-Edge assets were later acquired by Bedford. Shortly after Rolapak Pty Ltd ceased business, a major customer of the company, the Big W chain store, approached Pinefair and asked if it could supply garden edging as its former sources of supply from Rolapak Pty Ltd had become uncertain. Pinefair, through Mr Porter, then developed a garden edging product ("the Pinefair product"). It utilised half-round elements of treated pine log, arranged side by side in a form visually similar to, and of comparable sizes to, the Rolapak Ezy-Edge product. However, the post elements were connected by an extruded plastic strip which varied between 108 and 112 millimetres wide and extended for the complete length of the assembled garden edge. Along the length of the plastic strip, every 80 millimetres was a 40 mm by 40 mm square cut out. Mr Porter developed the plastic strip from reclaimed plastic waste. The plastic strip was affixed to each pine log segment by four staples.
Over a period of four to six months Pinefair, through Mr Porter, developed a process and built a machine to enable the Pinefair product to be manufactured mechanically. Photographs in exhibit RJP1 to Mr Porter's affidavit depict the machine. Half-round elements of treated pine log, approximately 600 mm in length are fed on a conveyor, flat rear face upwards, under a tower of staplers. Four runs of continuous plastic strip from reels are fed over the upper surface of the post elements and affixed to them by staples as the post elements and the plastic strips pass under the stapling tower, such that four staples are inserted through each plastic strip as it passes over the flat rear surface of a post element.
As the post elements emerge from under the staplers, in the configuration being described, the 600 mm lengths have stapled to them four plastic strips. The post elements then pass through saws that cut them into four separate edging materials. After the edging materials leave the saws, they are separated into lengths for packaging by manually cutting the plastic strip once the required length, say three metres, has emerged from the machine.
The machine can be set up in different configurations so that instead of producing four runs of edging material 150 mm high (the process just described), it produces edging materials with a 200 mm or 300 mm height.
The functional properties and aesthetic features of the product so produced are for practical purposes identical with Rolapak Ezy-Edge. The mechanical process just described is still used by Pinefair, but with a modification that was installed at about the time the Deed was executed, following the events now to be described.
In September 1995 Bedford became aware of the Pinefair product in Big W stores, being sold under the name Rola-Edge. Bedford sent a letter of demand to Pinefair complaining that the get up of its product, and its packaging including the name Rola-Edge, infringed Bedford's intellectual property rights, and constituted misleading and deceptive conduct. Bedford also alleged infringement of the Patent.
As a consequence of Bedford's demands, Pinefair changed the name of its product to "Roll-a-Edge", and made some changes to the get up of its packaging. No changes were made to the features of the product itself. Bedford considered that the Roll-a-Edge product infringed its rights in the same way as had the Rola-Edge product. Bedford commenced proceedings in this Court, Action no. SG 84 of 1995 ("the First Proceedings") seeking relief against Pinefair and Mr Porter. Bedford alleged misleading and deceptive conduct contrary to s 52 of the Trade Practices Act 1974 (Cth), passing off, breach of trademark, and infringement of claims in the Patent. Pinefair and Mr Porter denied all of these allegations, and by way of cross-claim pleaded that the Patent was invalid.
On 27 November 1995 Branson J granted an interlocutory injunction pending trial restraining Pinefair, its servants and agents, from promoting its product in packaging substantially similar to Bedford's packaging. The action however did not proceed to trial as the parties reached a settlement following a conference between solicitors and officers of both corporations held in South Australia on 26 April 1996. Following that conference, and subsequent negotiations in writing between the solicitors for the parties, the Deed was executed on 1 July 1996. The terms of the Deed are said to be confidential between the parties. It is sufficient for present purposes to note that included among the terms agreed were clauses relating to packaging and trademarks, cross releases by each party of the other in connection with the claims and liabilities arising before 1 July 1996 connected with or incidental to the Patent as set out in the First Proceedings, and agreements to discontinue the claim and cross-claim. It is necessary to set out two clauses the meaning and effect of which is directly raised in the present action. Those clauses are as follows:
"4. Garden Edging Banding
Pinefair and Porter agree that they will not either collectively or individually use in the manufacture of its products, or in any way or capacity be involved or associated in any business which uses in the manufacture of its products, after the 1st day of July 1996, a continuous banding system as described in Australian Patent No. 564517 and will utilize a banding system which is completely broken and separated at each element of garden edging.
5. Release
5.1 ...
5.2 ...
5.3 The parties further agree that they are hereby estopped from bringing any claim, action or suit of any nature in the future which contains any claim made either by way of claim or cross claim in the Proceedings, and that this Deed can be relied upon by either party as a bar to any such action, claim or suit."
In October 1996 employees of Bedford purchased from Big W stores in South Australia, and from Queensland Cement Distributors Pty Ltd, garden edging manufactured and distributed by Pinefair which Bedford considered infringed claims in the Patent and constituted a breach of cl 4 of the Deed of Settlement. The present proceedings were commenced by Bedford on 22 November 1996.
The particulars of infringement identify three rolls of edging material which have been introduced into evidence through Mr Stewart, the sales manager of Bedford, as BS-A, BS-B and BS-C. BS-A was purchased from the Kilkenny store of Big W on 25 October 1996, and BS-B was purchased from the Marion store of Big W on 12 October 1996. BS-C was purchased from Queensland Cement Distributors Pty Ltd on 23 October 1996.
BS-A and BS-C are identical, but BS-C was introduced into evidence as it was being marketed under the product name "Gold Medal" whereas the Pinefair product sold through Big W was marketed under the brand name "Pine Edge". There is a dispute between the parties, which remains to be decided at a later date, whether the Pinefair product marketed under the brand name Gold Medal was part of the subject matter of the First Proceedings and therefore subject to the release in the Deed.
At about the time that the Deed was executed Pinefair modified the mechanical process by which its garden edging product is made. The modification consists of an automatic cutter intended to completely sever the plastic strip at each post element. The cutter has knife blades designed to make a cut running parallel with the post elements at about the centre of each post element. Where the cuts are successfully made, they have the effect of cutting the plastic into pieces so that each piece is then affixed by two staples to one side of a post element, and by two staples to the adjacent edge of the next post element in the edging material. The cutting mechanism is installed as the last mechanical process in the machine after the saws. It is situated approximately one metre from the tower of staplers, so that between the insertion of the staples that affix the plastic strip to the post elements, and the point where the plastic strip is automatically cut, there would be some 10 or 11 post elements affixed to the still intact plastic strip.
Exhibit BS-B is an example of the Pinefair product made in the modified machine, but at a time when the cutting mechanism had not been perfected. At approximately every eleventh or twelfth post element the cutting mechanism did not operate with the result that three post elements were joined by plastic strip that was not cut at all. At other times whilst the mechanism operated, on some occasions, the knife blades made incomplete cuts with the result that the strip was only partially cut, and remained joined about mid-way between the edges of the strip.
Mr Porter has given evidence that exhibits BS-A and BS-C are Pinefair products that were manufactured and distributed by Pinefair before the settlement of the First Proceedings, although, it seems, they were purchased later from stock held after that date by Big W and Queensland Cement Distributors. Exhibit BS-B is an example of the configuration of the Pinefair product manufactured shortly after the settlement when the automated cutting process was still experiencing teething problems. These faults, Mr Porter says, have now been rectified.
By their defence and counter claim, twice amended, the respondents deny Bedford's claims of infringement and breach of cl 4 of the Deed. In the alternative they allege that the interpretation of the Deed contended for by Bedford in support of the alleged breach of cl 4 arises from uncertainty and ambiguity in the terms of the Deed such that a court cannot be objectively certain as to its interpretation. In the further alternative it is alleged that the parties in negotiating and settling the terms of the Deed did so under a mutual mistake in that there is an insoluble ambiguity in the terms of the Deed, and therefore the parties were not ad idem. The pleadings do not specify whether these matters are alleged to render the whole Deed void or unenforceable, or only cl 4. The Deed contains a clause to the effect that if any provision of the Deed is void or unenforceable, that does not affect the validity or enforceability of the remaining provisions of the Deed.
Notwithstanding the pleading just mentioned, the respondents seek to set up cl 5.3 of the Deed by pleading that Bedford is estopped from bringing any claim for infringement of the Patent as the same claims were made in the First Proceedings in respect of which releases were given.
Finally, the respondents, by cross claim, plead that the Patent is invalid on a number of grounds including anticipation and disclosure by publication of the alleged invention before the priority date. The respondents seek an order that the Patent be revoked.
By its reply Bedford seeks to rely on cl 5.3 of the Deed as a bar to the cross claim.
Pursuant to a pre-trial direction the matter has come on for trial on all issues raised in the pleadings, save for the issues of invalidity and damages or other pecuniary relief.
The complete specification of the Patent was published and became open to public inspection on 21 February 1985. A standard patent was granted under the Patent Act 1952 (Cth). That Act was repealed by s 230 of the Patents Act 1990 (Cth) which came into operation on 30 April 1991. Section 233(1) of the Patents Act 1990 provides that the 1990 Act shall apply in relation to a standard patent granted under the 1952 Act as if the patent had been granted under the 1990 Act. The issues of infringement, and validity, raised in this proceeding must therefore be determined under the provisions of the 1990 Act.
The complete specification describes the invention as "Garden Edging", and the body of the specification commences with a preamble containing the following general description:
"This invention relates to edging material for use as an edging for gardens, lawns, paths, drives and the like areas. The invention relates particularly to an edging material which is also able to be used to retain earth or other material such as garden toppings."
Then follows a brief description of prior art in the field relating to edging materials and a statement of particular respects in which these materials are unsatisfactory. The objects of the invention are then set forth, as follows:
"It is therefore desirable to provide an edging material which is relatively easy to use and locate in place and which is aesthetically attractive.
It is also desirable to develop a garden edging which is relatively economical to manufacture and which can be packaged and transported for sale and use.
It is also desirable to have a garden edging which will conform to desired garden shapes, including curves.
An object of the invention is to provide an edging material for use around gardens and as a low retaining wall which can be quickly and easily located in place on site.
A further object is to provide an edging constructed or formed of relatively inexpensive materials, preferably mainly natural materials."
The consistory clause follows, and its terms exactly mirror claim 1 in the Patent. Claim 1 reads:
"Edging material suitable for retaining earth comprising an assembly of a plurality of post elements each of generally half-round cross-section with side edges defined by the intersection of a substantially flat rear face and a curved front face, the elements being disposed in side-by-side relationship with the side edges of adjacent elements either abutting or being slightly spaced, elongated band means connected by connecting means to each element whereby the assembly is able to be deformed about axes parallel to said elements but not significantly about transverse axes, said band means either extending along the rear faces of the elements in which case the connecting means comprises staples interconnecting the band means with the said rear face of each element or passing through holes extending laterally through each element substantially parallel to the rear face thereof, which holes constitute said connecting means."
Following the consistory clause, the body of the specification then states:
"In a preferred embodiment of the invention, the band means comprises two strands of steel wire, preferably galvanized wire, each strand being connected to each post by at least two fasteners whereby the edging is deformable about axes parallel to the post elements by bending of the wires.
This bending enables lengths of the edging to be rolled into substantially spiral packs for transportation and also permits the edging, in use, to define curves and angular changes of direction."
Bedford's product, Rolapak Ezy-Edge, applies the preferred embodiment.
The body of the specification goes on to describe the invention by reference to accompanying drawings, and concludes with the statement of 10 claims which define the monopoly claimed.
Bedford alleges that Pinefair's product infringes claim 1, and also claim 4. Claim 4 is as follows:
"4. Edging as claimed in any one of claims 1 to 3 wherein adjacent elements are separated by gaps of about 5mm to permit flexure of the assembly about axes located on the rounded side of the posts."
It is convenient to consider first the claim for infringement. In order to succeed on this aspect of the case, Bedford must show that the respondents have exploited the garden edging which possesses each of the integers of claims 1 and 4: see Patents Act 1990, s 13, Olin Corporation v Super Cartridge Pty Ltd [1977] HCA 23; (1977) 14 ALR 149 at 157, Nicaro Holdings Pty Ltd v Martin Engineering Co. (1990) 91 ALR 513 at 527-528. The meaning of "exploit" is defined in Schedule 1 of the Patents Act 1990 , to include, in relation to an invention, where the invention is a product, "make, hire, sell or otherwise dispose of the product, offer to make, sell or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things".
The integers combined in claim 1 appear to be seven in number:
1. Edging material suitable for retaining earth comprising an assembly of a plurality of post elements...
2. each of generally half-round cross-section...
3. with side edges defined by the intersection of a substantially flat rear face and a curved front face...
4. the elements being disposed in side-by-side relationship with the side edges of adjacent elements either abutting or being slightly spaced...
5. elongated band means connected by connecting means to each element...
6. whereby the assembly is able to be deformed about axes parallel to the said elements but not significantly about transverse axes...
7. said band means either extending along the rear face of the elements in which case the connecting means comprises staples interconnecting the band means with the said rear face of each element or passing through holes extending laterally through each element substantially parallel to the rear face thereof, which holes constitute the said connecting means.
The last of the integers describes two quite different fastening systems. It is the first which is relevant to these proceedings as the plastic strip utilised in the Pinefair product is said to constitute the "band means" which extends along the rear face of the half-round post elements, and is affixed to them by staples.
The first of these integers describes the function of the product and its assembly. It requires that the claimed product be suitable for retaining earth, and to be "an assembly" which has two or more post elements. A particular number of post elements, as long as there are at least two to meet the requirement of "plurality", is not part of the integer. The Pinefair products, and other examples of garden edging tendered as exhibits, are generally packaged and sold in about three metre lengths each length comprising approximately 32 post elements. However, in my opinion the integer is met so long as the edging material comprises two or more post elements. The edging material may consist of short lengths of only two or a few post elements, or of long lengths consisting of many post elements. In its commercial application one of the features of the product is that it can be cut or joined to fit the size of the garden to which the edge is being installed.
Counsel for the respondents contended that if only two or three post elements were connected together, the resulting product would meet neither the requirement that it be edging material suitable for retaining earth, nor would it be "an assembly". As the usual packaged commercial length has roughly 32 post elements, it was suggested that a short length comprising only three, or even four or five, post elements was at best a "sub-assembly". I do not accept that submission. The word "assembly" means "the coming together of two or more persons or things" (The Shorter Oxford English Dictionary). Whatever the length of edging material, if there are two or more post elements connected together, there is an assembly of a plurality of post elements. A functional feature of the invention, required by the sixth integer, is that the assembly is able to be deformed about axes parallel to the post elements but not significantly about transverse axes. Whatever the length of the assembly, each end of the assembly will in its contemplated use be fixed upright in some manner, for example with a spike. Even an assembly of two or three post elements so fixed would be suitable for retaining earth.
The Pinefair product in its different configurations has the integers numbered 2 to 4, and 6. Central to the dispute between the parties is whether the accused Pinefair product contains the fifth integer. If it does, so that the post elements are "elongated band means connected...", then the last integer is also present.
Bedford adduced evidence from Mr Neil Williams, a horticultural journalist and consultant with many years practical experience in the gardening industry, and from Dr Manfred Zockel, a Doctor of Philosophy in Mechanical Engineering, to explain the features of the claims in the patent. Both experts were agreed that the claims do not incorporate technical terms, and that the word "elongated" in the fifth integer is not a technical term. It is not a term that has special engineering meaning. The witnesses sought to apply to the term its ordinary English meaning, relevantly "lengthened, extended; long in proportion to its breadth": The Shorter Oxford English Dictionary.
If the expression "elongated band means" stood alone in claim 1, there could be a question whether the integer was met if the band means were constituted by a series of separate items of flexible material affixed to each of the post elements, eg like the plastic pieces which join the post elements in the Pine Tec product, so that the material pieces are longer in height than they are wide when measured along the length of the edging material. However, in construing the scope of the claim, the expression "elongated band means" does not stand alone. It must be read in the context of the whole claim, and if there be any remaining lack of clarity it is permissible to resort to the body of the specification to define or clarify the meaning of words used in the claim: Decor Corporation Pty Ltd v Dart Industries Inc. (1988) 13 IPR 385 at 391, 397-398.
In my opinion it is clear from the concluding part of claim 1, that I have described as the last of the integers, that the elongated characteristic of the band means is to be determined by comparing the length of the band means measured along the length of the edging material (i.e. along the transverse axes of the post elements), as against its width measured at right angles to the first mentioned measurement. This follows from the requirement that the band means, where the connecting means comprises staples interconnecting the band means with the rear face of each element, "extend(s)...along the rear face of the elements", and from the alternative requirement that the elongated band means pass "through holes extending laterally through each element". If I am wrong in this interpretation of claim 1, I consider that resort to the body of the specification leaves no doubt that this is the intended scope of claim 1.
The fifth integer requires that the band means affixed to the rear of each post element be long in proportion to its width when measured along the transverse axes of the post elements. The integer does not specify that the band means shall consist of either one or a plurality of lengths of material. In the preferred embodiment the band means comprises two strands of steel wire, but any band means of flexible material would achieve the purpose required by the sixth integer if it provides support and strength to the post elements near to the top and bottom edges. The description of this integer would be met by a single length of material, such as an extruded plastic strip like that applied by Pinefair to its product, so long as the requirement that the band means be "elongated" is present.
Evidence was led from the expert witnesses that the use of an elongated band is also consistent with the stated desire in the specification that the edging be relatively economical to manufacture. They considered that this could be achieved with an elongated band in more or less continuous form which can easily be placed along the rear face of the post elements and affixed thereto by a simple mechanised stapling process, thereby achieving savings in the manufacturing process associated with a reduced labour input and the relative speed and accuracy of a mechanised process. Whilst in the interpretation of the scope of a claim it is necessary that the specification be read as a whole, and that it be understood as addressed to a person skilled in the relevant art, to "those likely to have a practical interest in the subject matter of the invention" (Catnic Components v Hill and Smith Limited [1982] RPC 183 at 242), in my opinion the fact that an elongated band in more or less continuous form maybe one of the ingredients in the process of manufacture does not assist in determining whether an integer descriptive of a product, has been infringed. Both claims 1 and 4 are product claims, not process claims.
Mr Williams and Dr Zockel gave evidence that the accused Pinefair products appear to have been manufactured by a mechanical process in which the plastic strip had initially been connected to the post elements as a continuous strip, and subsequently cut at each post element. This evidence, which was later confirmed to be correct by Mr Porter's evidence, was led not in an attempt to elevate the product claims to process claims, but to raise the inference that in the manufacturing process a product was created which infringed the patent, at least until the cutting process occurred. In other words, at a point in the manufacturing process, after the plastic strip was affixed to the post elements, there existed a product which contained all the integers of claim 1 (and claim 4, as the post elements were approximately 5 mm apart). In particular there were at that stage two or more post elements "elongated band means connected".
I turn to the Pinefair products alleged in the Particulars of Infringement to infringe the Patent. The Pinefair products exhibit BS-A and BS-C, for their full length of approximately three metres, are connected by a single continuous plastic strip and, in my opinion, contain each of the integers of claim 1. As the post elements are approximately 5 mm apart, they also contain all the integers of claim 4. In my opinion, these exhibits infringe the Patent.
The Pinefair exhibit BS-B, contains vertical cuts which completely sever the plastic strip at the rear face of some, but not all, of the post elements. In some instances, because the cut does not extend across the full width of the band, the band is not completely broken across three, four or in two instances five post elements. In these instances I consider the plastic strip retains the characteristic of being longer than it is wide along the transverse axes to the post elements, and therefore meets the description of an "elongated band". This is also the case at the eleventh or twelfth post element where there is no cut at all so that three post elements are joined by an uncut section of plastic strip.
It was also contended on Bedford's behalf that exhibit BS-B infringed the Patent because at either end of the edging material there is a piece of plastic affixed by two staples that is longer than it is wide measured along the transverse axes of the post elements. The function of these plastic flaps is not clear. In exhibit BS-B, these are attached only to one post element, and do not form a connecting band between two post elements. I am not persuaded by the evidence that the presence of these flaps makes exhibit BS-B an infringing article.
I understood the respondents to acknowledge that BS-A and BS-C would infringe claims 1 and 4 of the Patent, assuming the Patent is valid. However they say that those articles are covered by the release contained in the Deed. Further, without conceding that exhibit BS-B wherever the plastic strip has not been completely severed constitutes an infringement, the respondents say that the number of units of the Pinefair product that were manufactured with incomplete cuts would be very few, and any damages suffered by Bedford would be small. These would be matters for investigation if the respondents' defences based on the Deed and invalidity otherwise fail.
The more important issue canvassed at trial is whether, assuming Pinefair's manufacturing process now completely severs the plastic strip at each post element, the present Pinefair product, of which exhibit RJP6 is an example, infringes the Patent. In this form, at the last mechanical step in the manufacturing process, the plastic strip is cut at each post element. The plastic material is then in pieces, approximately square in shape (disregarding the 40 mm x 40 mm cutouts), and each piece is stapled on one side to one post element, and on the other side to the adjacent post element. Insofar as there is any difference between length and width of the plastic pieces, the greater length is along the vertical height of the post elements, not along their transverse axes. Each single piece of plastic material operates as a single hinge between the two post elements to which it is stapled. The respondents contend that in the finished product, the post elements are not "elongated band means connected", and that integer of claim 1 does not exist.
Moreover, the respondents contend that the present Pinefair product, in its finished form, does not possess "band means ... extending along the rear faces of the elements" as required by the last of the integers.
Counsel for Bedford, however, contend that to modify the manufacturing process of what were, before the modification, infringing articles by simply cutting the plastic strip at each post element, results only in a colourable and immaterial variation, and that the present Pinefair product continues to take the benefit of the invention in a way that constitutes an infringement of the Patent. Bedford relies in particular on Radiation Ltd v Galliers & Klaerr Pty Ltd [1938] HCA 17; (1938) 60 CLR 36 at 51, per Dixon J, Commonwealth Industrial Gases Ltd v MWA Holdings Pty Ltd [1970] HCA 38; (1970) 180 CLR 160 at 167 per Menzies J, and Catnic Components Ltd v Hill and Smith Ltd at 240-243 per Lord Diplock.
These submissions raise the question whether the requirements in Claim 1 that the assembly of post elements be "elongated band means connected ... said band means ... extending along the rear faces of the elements" specify the elongated band means of connection as an essential integer that confines the particular form of construction of the invention. If so, a form of construction of edging material that omits the elongated band means of connection will not infringe the Patent:
"Once it is determined that the discarded features are essential to the claim, the substitution of other means of performing the like function cannot amount to infringement by colourable variation, or by the use of a mere mechanical equivalent. The changes are not insubstantial variations in detail under colour of which the thing claimed is taken. They are not other mechanical embodiments of the inventive idea for which protection has been obtained. The claim itself makes them cardinal. The intention of the appellant to take advantage of the narrowness of the monopoly is, of course, immaterial." (Walker v Alemite Corporation [1933] HCA 39; (1933) 49 CLR 643 at 657, per Dixon J).
In Radiation Ltd v Galliers & Klaerr Pty Ltd, Dixon J, in the passage relied on by Bedford, said at 51:
"But, on a question of infringement, the issue is not whether the words of the claim can be applied with verbal accuracy or felicity to the article or device alleged to infringe. It is whether the substantial idea disclosed by the specification and made the subject of a definite claim has been taken and embodied in the infringing thing."
However, Dixon J later said at 52:
"Sometimes a claim, particularly a claim for a combination, is expressly confined to a particular form of construction or the like, and in such a case it is useless for the patentee to complain that his idea of what he calls his principle has been applied in a different construction or has been expressed by means of a mechanical equivalent of some element which his claims make of the essence of his monopoly."
The judgment of Menzies J at 168 in Commonwealth Industrial Gases Ltd v MWA Holdings Pty Ltd recognises this principle.
The above passages put in another way the principle that "...if, on its true construction, the claim in a patent claims a particular combination of integers, and the alleged infringer ... omits one of them he will escape liability": Populin v H B Nominees Pty Ltd [1982] FCA 45; (1982) 41 ALR 471 at 475.
In my opinion, the requirement that the assembly of post elements be elongated band means connected is an essential integer, and the Pinefair product, in its present form with the plastic strip completely cut at each post element, does not contain this essential integer, and does not infringe claim 1. It follows also that the product does not infringe claim 4. I consider that edging material that has a means of joining each post element to the next one that is not elongated along the transverse axes of the post elements does not infringe the Patent.
However, in the manufacturing process, between the point where the staples are inserted to affix the continuous plastic strips to the post elements, until the automatic cutting mechanism severs the strip into segments at each post element, there exists a length of edging material wherein post elements are elongated band means connected. At that point in the manufacturing process, I consider there exists edging material which infringes claims 1 and 4.
In my opinion, by creating the invention in this way as a stage in the manufacture of the Pinefair product, the respondents are exploiting the invention contrary to the exclusive rights conferred on the patentee by s 13 of the Patents Act 1990 . The definition of "exploit" in Schedule 1 of the Patents Act 1990 includes both "make" and "use". In my opinion, the manufacturing process employed by Pinefair involves both making and using the invention the subject of the Patent.
The grant of an exclusive right to "exploit" the invention provided by s 13 of the Patents Act 1990 replaced the traditional formulation of the exclusive right granted by a patent "to make, use exercise or vend". The explanatory memorandum to the 1990 Act says in relation to s 13 and the definition of "exploit":
"This definition, when read with clause 13, constitutes a codification of the scope of patent rights. It avoids some obscure language in the present Act which refers to the right to `make, use, exercise and vend' the invention."
As the author observes in Lahore "Patents, Trade Marks and Related Rights", at para 24,000 the definition attempts to encapsulate the decisions in which these words "make, use, exercise and vend" have been interpreted. It is not necessary in this judgment to explore the full meaning and extent of the total definition. For present purposes it is sufficient to observe that there seems to be no reason to doubt that in the definition the words "make" and "use" carry the same meaning as has been given to those words in the former legislation.
The word "make" is an ordinary English word with wide meaning. Terrell on "The Law of Patents" 14th Ed 1994, p 176 observes that for this reason, no difficulty should arise with the word. Where the invention is a product, what must be made is the whole product, not constituent parts, and the "making" is not complete until the final step is carried out which results in the complete infringing article: see Lahore at para 18,205. In the present case, the final step to complete the infringing article has occurred before the cutter severs the plastic strip at each post element.
The word "use", in the traditional formulation of the patentee's exclusive rights, has been held to include the exhibition of an article for trade purposes: Dunlop Pneumatic Tyre Co Ltd v British and Colonial Motor Car Co (1901) 18 RPC 313. In that case a motor car exhibited at a trade fair was fitted with tyres manufactured abroad according to the specification of the letters patent. The case was decided on the footing that the defendant did not intend to sell the tyres, and if the car has been sold, different tyres would have been fitted. Lord Alverstone LCJ said, at 315:
"... I do say if a person uses an invention to present his goods for sale, and intending the thing exhibited to represent what he is going to sell, and if part of that thing is an article which is an infringement and is serving a useful purpose during that time by being exhibited as part of the machine, I think it is a user of the invention."
See also Badische Anilin und Son Fabrik v Chemische Fabrik vormals Sandoz (1903) 20 RPC 413.
In Smith Kline & French v Attorney-General (NZ) (1991-1992) 22 IPR 143 the question was whether the importation by a generic drug manufacturer of a drug into New Zealand which embodied the plaintiff's invention for the sole purpose of obtaining the consent of the Minister of Health to distribute the drug in New Zealand after the plaintiff's patent expired infringed the plaintiff's sole privilege to "make, use, exercise and vend the invention". In holding that there had been an infringement Cooke P said, at 145:
"In my opinion, as a matter of the ordinary use of language, whether now or (one would suppose) in earlier centuries, to send an embodiment of the invention to a government authority for approval is plainly a use of it. Without doubt, too, Douglas acted for the commercial advantage or springboard of being more ready to launch into the market when the patent expired. This seems to me an infringement of both the letter and the spirit of the grant."
Hardie Boys J, after referring to cases dealing with the experiment principle, said at 149:
"These cases serve to delineate not only the limits of the experiment principle, but also the bounds of permissible activity, between what is and what is not use for commercial advantage. Doubtless experimentation will usually have an ultimate commercial objective; where it ends and infringement begins must often be a matter of degree. If the person concerned keeps his activities to himself, and does no more than further his own knowledge or skill, even though commercial advantage may be his final goal, he does not infringe. But if he goes beyond that, and uses the invention or makes it available to others, in a way that serves to advance him in the actual market place, then he infringes, for the market place is the sole preserve of the patentee."
Both Cooke P and Hardie Boys J referred to the speech of Lord Wilberforce in Pfizer v Ministry of Health [1965] AC 512. His Lordship at 573 held that to import an invention, and to package and label it ready for supply constituted a use of the invention. So too did the holding of the invention in stock for trade amount to a use of the invention. Whilst the mere possession of the invention did not constitute an infringement, possession combined with the intention of using it in trade constituted a use: see at 572.
In the present case the creation of edging material that has all the integers of claim 1 of the Patent as a step in the manufacture of the Pinefair product constitutes a "use" of the invention as the respondents are taking commercial advantage of the invention to advance them in the market place, even though at the point of sale the Pinefair product has been altered so that it no longer possesses all the integers of the claim.
The use of an invention as a transitory step in the production of an article which in its final form differs from the invention has been considered in a number of cases. In Saccharin Corp v Anglo-Continental Chemical Works Ltd (1900) 17 RPC 307 the patented invention was a process for manufacturing of toluene sulpho chloride. The defendant had used the patented process to produce toluene sulpho chloride which it then used in the manufacture of saccharin which it imported into England. Buckley J held there was an infringement, saying, at 319:
"If the patented process were the last stage in the production of the article sold, the importation and sale of the product would, in my opinion, plainly be an infringement. Does it make it any the less an infringement that the article produced and sold is manufactured by the use of the patented process which is subjected to certain other processes? In my opinion it does not. By the sale of saccharin, in the course of the production of which the patented process is used, the Patentee is deprived of some part of the whole profit and advantage of the invention, and the importer is indirectly making use of the invention."
The House of Lords qualified the scope of Buckley J's test in Beecham Group Ltd v Bristol Laboratories Ltd (1978) 95 RPC 153 by adding a rider that for there to be an infringement the process must have played more than an unimportant or trifling part in the manufacture abroad of the product, each case depending on its own merits: see Lord Diplock, with whom the other members of the House agreed, at 200-201, and Lord Simon of Glaisdale at 203-204; see also Wilderman v F W Berk & Co Ltd (1925) 42 RPC 79.
Although the Saccharin case was concerned with the application of the doctrine of infringing importation of an invention that was a process, the meaning given to the notion of "use" in my opinion applies to the present case. The creation of the garden edging that has all integers of claim 1 and its subsequent use in the manufacture of the Pinefair product was not an unimportant or trifling part of the manufacture, rather it was the sole ingredient for the finished product, and the only additional step to produce the Pinefair product was the cutting of the plastic strip.
I turn to Bedford's allegation that the respondents have broken the terms of cl 4 of the Deed. By its terms Pinefair and Mr Porter agree that they will not either collectively or individually after 1 July 1996 "use in the manufacture of its products, or in any way or capacity be involved or associated in any business which uses in the manufacture of its products...a continuous banding system as described in Australian Patent No. 564517 and will utilize a banding system which is completely broken and separated at each element of the garden edging".
The respondents contend that cl 4 is descriptive of the final products, not the process of manufacturing the products, and that the Pinefair products in their final form do not have a continuous banding system as described in the Patent. On this construction however, the respondents concede that the Pinefair products in their present form would contravene cl 4, if it is otherwise enforceable, because whilst the banding system is completely broken, it is not separated at each element. Counsel for the respondents, in support of this construction, argues that the dispute which the Deed was intended to settle was a dispute over a patent for a product, not a process, and that there would have been no reason for the respondents to agree to a contractual term that extended to Bedford protection against a process of manufacture.
This is an attractive argument, but I consider the meaning conveyed by the words of the clause is clear, and is inconsistent with the construction contended for. The expression "use in the manufacture" twice appearing in negative stipulations in the clause, and the expression "utilize" in the positive stipulation are, in my opinion, descriptive of the process of manufacture.
In my opinion cl 4 is to be construed so as to impose on the respondents in the manufacture of its products a prohibition against the use of a continuous banding system as described, and an obligation to utilise a banding system which is completely broken and separated at each element of the garden edging. I consider both requirements are not merely directed to the features of the end product, but to the process of manufacture.
The description of "a continuous banding system as described in Australian Patent No. 564517" refers to the elongated band means by which the post elements in the product are joined together, that is to a banding system where the joining material has a greater length along the line of the garden edging that it has width.
I reject the respondents' contention that cl 4 of the deed of settlement is unenforceable by reason of uncertainty or ambiguity in its terms. I think the meaning of the words used is clear.
The respondents further plead that the parties in their negotiations were not ad idem as the respondents made it clear to Bedford that they intended to adopt a manufacturing process that cut the banding system immediately prior to the product being packaged and offered for sale to the public, in the manner now achieved by the perfected cutting system. The relevant clauses of the amended defence read:
"7. In the further alternative the parties in negotiating and settling the terms of the settlement agreement did so whilst subject to a mutual mistake in that there is insoluble ambiguity in the terms of the settlement agreement and in particular clause 4 thereof in that the interpretation argued for by the applicant with respect to clause 4 is not the only reasonable interpretation to be placed upon the words ... and therefore the parties were not ad idem.
8. The parties were not ad idem in that the Respondents offered at both the conference of the 26th April and in subsequent correspondence to `split the band or the back' or `break the back' of its product and in so offering made it clear to the Applicant that it intended to cut or split the back of the banding immediately prior to the product being packaged and offered for sale to the public.
9. The Respondents believed that the Applicant was well aware that this was what the Respondents intended to do in both offering to accept a settlement based on such an offer and in entering into the settlement agreement.
9.2 The Respondents refer to the correspondence between the solicitors for the parties of the 22nd, 24th and 30th May 1996 and to the use of the words:
* `break the band' in Phillips Fox letter of the 24th May 1996
* `split banding' in Phillips Fox letter of the 24th May 1996
* `a banding system which is broken at each element' in Norman Waterhouse's letter of the 30th May 1996
`breaking the band' and `if the banding was broken' in Norman Waterhouse's fax of the 22nd May 1996."
The evidence of those present at the conference on 26 April 1996 on behalf of Bedford is to the effect that Bedford said that they required Mr Porter to stop breaching the patent by using the "continuous" banding that he was then using. They used the expression "continuous band" and not the expression "elongated band means" contained in claim 1 of the patent. Bedford required the respondents to "break" the band so that it could not be said to be continuous, and therefore in breach of the patent. These witnesses say that there was no discussion at all at the meeting concerning what was meant by "breaking" the band, or as to when or how that was to be achieved. They say that at one point in the discussion Mr Porter said words to the effect "if you want me to break the back, I can break the back. I can make a machine that can do it, I've made machines like this with my bare hands". Bedford responded by saying that they wanted the respondents to stop infringing the patent. An employee of Bedford, Mr Jones, said words to the effect "you know what you have to do because you used to produce a product for Pine Tec that quite clearly does not infringe our patent and you know the reasons why Pine Tec manufactured garden edging that way." The reference to the Pine Tec product was a reference to the garden edging which Mr Porter had earlier made where discrete pieces of plastic material were separately applied to adjacent post elements.
In his cross-examination Mr Porter agreed that on 26 April 1996 there was no discussion about whether the respondents would cut the plastic strip before or after it was attached to the logs, and he did not deny that Mr Jones had put to him that he could produce a product in the manner that the Pine Tec product had been made without infringing the Patent. Rather, he said that the conversation could well have taken place. He agreed that he did not disclose to Bedford the method of manufacture which he had in mind at the time, namely to simply cut the plastic strip at each post element in the manner now achieved by his modified machinery.
On this evidence, the respondents did not make it clear to Bedford that they intended to cut or split the back of the banding at each post element immediately prior to the product being packaged and offered for sale to the public. On the contrary, the evidence shows that had this been disclosed, Bedford would have immediately protested, saying that the product would continue to infringe the patent. The evidence indicates not that Bedford understood what Mr Porter had in mind, but that Mr Porter understood that Bedford had in mind that to avoid future infringement, it would be necessary for Mr Porter to manufacture a product like the Pine Tec product in which the post elements were joined by pieces of plastic material that were completely separated at each post element.
The correspondence which occurred between the conference and the execution of the Deed in my opinion does not assist the respondents' case. The first communication following the conference was from Bedford's solicitors to the respondents' solicitors proposing terms of settlement, one such term being "your client cease manufacturing its product using any form of continuous banding...". By letter dated 3 May 1996 the respondents' solicitors put forward counter proposals. One of those proposals would include an agreement by the respondents to "cease manufacturing its products using any form of continuous banding...". On 22 May 1996 Bedford's solicitors said:
"We have conferred with Mr Vinnall [the respondents' Patent Attorney] regarding this issue and he confirms our view that to avoid a breach of the Patent the banding must not join or span more than two elements continuously. In other words the banding must be broken at each element. If you wish to discuss the requirements of the Patent please telephone Mr Vinnall before close of business on Friday..."
On 24 May 1996 the respondents' solicitors wrote to Bedford's solicitors saying:
"I have taken up your kind invitation to discuss the matter directly with Mr Vinnall who whilst he did the best to convince me of your client's claim, did not convince me. Nevertheless in order to resolve the matter, our client will break the band at each element as you request."
Reference to this extrinsic material tends to confirm that in the negotiations Bedford was seeking the agreement of the respondents to desist using in the manufacturing process a continuous band system, and to revert to producing a product, like the Pine Tec product, where the post elements were joined with individual pieces of material applied separately. The extrinsic material also suggests that Mr Porter well understood that this was the requirement of Bedford. Clause 4 of the Deed, as I consider it should be interpreted, achieves that result.
The evidence does not establish the matters alleged in paragraph 7 to 9 inclusive of the defence. I consider the manufacturing process adopted by the respondents after 1 July 1996, as described by Mr Porter, constitutes a breach of cl 4 of the Deed.
Bedford is entitled to the protection of cl 5.3 of the Deed in answer to the cross-claim alleging invalidity of the patent. The allegations made in the cross-claim are in substance a repetition of the matters raised in the cross-claim in the First Proceedings. By cl 5.3 Bedford is entitled to rely upon the deed as a bar to the cross-claim.
For these reasons I consider that Bedford is entitled to declarations that the conduct of the first respondent constitutes an infringement of the Patent, and a breach of the Deed, as alleged in paragraphs 1 and 2 of the application, and an injunction against the respondents from using in the manufacture of its garden edging products, or in any way or capacity being involved or associated in any business which uses in the manufacture of its garden edging products, a continuous band system as described in the patent without the licence or authority of Bedford. Bedford is at liberty to bring into Court minutes of orders which reflect these reasons for judgment, and to list the matter for the trial of outstanding issues related to consequential relief.
As cl 5.3 of the Deed constitutes a bar to the cross-claim, the cross-claim should be dismissed.
|
I certify that this and the preceding twenty four (24) pages are a true copy of the Reasons for Judgment herein of the Honourable
Justice von Doussa |
Associate:
Dated: 5 March 1998
|
Counsel for the Applicant: | Mr B Caine with Mr M Roder |
| Solicitor for the Applicant: | Norman Waterhouse |
| Counsel for the Respondent: | Mr D Catterns QC with Mr D Hart |
| Solicitor for the Respondent: | Phillips Fox |
| Date of Hearing: | 30 September 1997 |
| Date of Judgment: | 5 March 1998 |
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URL: http://www.austlii.edu.au/au/cases/cth/FCA/1998/161.html