IP SPOTLIGHT 8 MAR 21

I NVAL I D I TY Novelty

Inventive Step

Justice Kenny accepted Compusign’s submissions. The VicRoads specification provided that VSLSs must have a partially flashing annulus and which was distributed to potential suppliers but did not indicate any constraint (such as a Patent) on the capacity of a third party supplier to supply such a sign, which a supplier would have reasonably expected to be included. Axent had failed to pay the renewal fees for the Patent by the deadline, and also failed to pay within the 6 month grace period which followed, resulting in the lapse of the Patent. Axent subsequently applied for (and was granted) an extension of time to pay the renewal fee. Justice Kenny decided that infringement could not be asserted between the initial renewal deadline (rather than from the conclusion of the grace period as contended by Axent), and the reinstatement of the patent 11 months later. Hi-Lux and Compusign argued that they could rely on the defence of prior use as they were preparing to make and supply their respective VSLSs before the priority date of the Patent. Justice Kenny confirmed that the prior use defence as it applied at the relevant date was very restrictive in its scope. The infringer needed to show that they had “taken definite steps” to “make a product or use a process” to avail themselves of the defence. This did not extend to all acts that constituted exploitation (e.g. sale/supply of products) but only making. Hi-Lux and Compusign relied on evidence that they had responded to an expression of interest or provided quotations to make the products, had produced some prototypes that showed their general capabilities of to make that sort of product and had received drawings for VSLS that had a partially flashing annulus. Justice Kenny considered that such steps were short of the “definite steps” required for actually making the product. The authorities indicated that the making of prototypes with a view to further development was not enough, and such preparations needed to reach the form of a final product. Lapse of Patent Prior Use

Axent also asserted an omnibus claim, which was defined “by reference to the examples”, but because there were no actual examples in the patent (only preferred embodiments), there could be no infringement. DEFENCES In light of this finding on infringement, it was not necessary to provide judgement on the defences raised, however, the court still provided some guidelines which are worthy of discussion here. Justice Kenny considered that each of the government agencies to which Hi-Lux supplied its VSLSs were authorities of the State, as each of these authorities was impressed with the stamp of government. However, Justice Kenny did not consider that Hi-Lux had been “authorised in writing” by any of these authorities. Hi-Lux relied on the contracts it had with the agencies for supplying the signs for demonstrating written authorisation. Justice Kenny concluded that while the written authority did not need to specifically identify the patent, the contract needed to require Hi-Lux to supply a VSLS in accordance with the invention. Because the contract left open the possibility for Hi-Lux to supply VSLSs that met the Crown’s requirements without infringing the invention, this did not constitute written authorisation. Justice Kenny also noted that there was a question as to whether the exploitation of the Patent was “necessary” for the provision of the authorities’ services as required by section 163, as non-infringing speed signs could also have been deployed. Crown Use Defence Hi-Lux sought to rely on the Crown use defence. A court may refuse to award damages if, at the date of infringement, the infringing party was not aware and had no reason to believe that a patent existed for the invention. Compusign argued that it was not aware of the Patent until receiving a letter of demand from Axent, and it had no reason to believe that there was a Patent because it was not mentioned in any of the road authorities’ specifications relating to VSLS. Innocent Infringement

For a document to be relevant to the assessment of inventive step, it must be “reasonably expected to have ascertained, understood and regarded as relevant” . Justice Kenny considered that there was no evidence that the September 2001 Specification was information that the skilled person could be reasonably expected to have ascertained because there was no evidence that they would have undertaken to source copies of VicRoads specifications as a matter of course. However, all claims of the Patent were found to lack an inventive step in light of the common general knowledge (CGK). Axent argued that only signs with a separate flashing light (rather than a partially flashing annulus) as conspicuity feature were part of the CGK. However, the evidence demonstrated that a flashing annulus was among the many options for a conspicuity feature that was part of the CGK. Therefore, the invention as claimed did not overcome a difficulty or cross a barrier as is required to establish an inventive step, because the feature was known and there was no real evidence that it was more effective than a separate flashing light. Justice Kenny rejected Hi-Lux and Compusign’s submissions that Axent was not entitled to the invention on the basis that the VicRoads employee to whom the concept of a partially flashing annulus was first demonstrated was a co-inventor. Justice Kenny also decided that Compusign and Hi-Lux did not discharge their burden of proof with respect to the lack of the best method ground. CONCLUS ION This lengthy decision canvasses a number of patent law issues, but in particular provides useful direction in respect of some less-frequently discussed aspects of patent law, including the crown use defence, prior use defence, innocent infringement and the grace period (as it applied in October 2002). The decision also provides lessons in drafting, as clear language must be used in the claims if the intention of the patentee is to encompass that have the “capability” produce the desired result. Entitlement and Best Method

The priority date of the Patent was October 2002.

Before filing the patent, Axent had demonstrated the idea of a VSLS with a partially flashing annulus to a VicRoads employee. Once it was confirmed that such signs would meet regulatory requirements, a specification was published (“September 2001 Specification”) in October 2001 that described such VSLSs. Axent argued that the September 2001 Specification should be excluded from the prior art base because: – the invention was made publicly available without Axent’s consent as it had disclosed its invention confidentially to VicRoads during the demonstration, the September 2001 Specification was published in breach of that duty of confidence, and the Patent was filed within 12 months of the publication of the September 2001 Specification (s 24(1)(b)), and – the information was provided by Axent to the State and the publication of the September 2001 Specification was derived from information provided to the State (s 24(2)) Justice Kenny rejected Axent’s submissions. The evidence showed Axent did not take issue with the inclusion of the relevant information in the September 2001 Specification and made no attempt to notify VicRoads that it considered the information was confidential after it was published. Therefore section 24(1)(b) was not established. Section 24(2) also did not have a “reach through effect”, and only protected disclosures from the patentee (or authorised person) to the State/Commonwealth, and not to subsequent disclosures made by the State/Commonwealth to third parties. Justice Kenny, therefore, considered the September 2001 Specification formed part of the prior art base for novelty as there was no evidence to suggest that recipients of the September 2001 Specification were not free to use that information as they pleased. Justice Kenny considered that the independent claims and some dependent claims were not novel in light of the September 2001 Specification.

BINHDU HOLAVANAHALLI Associate

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