Full Court Finds ‘In Prescribed Circumstances’ Only Allows Narrow Construction
In Fuchs Lubricants (Australasia) Pty Ltd v Quaker Chemical (Australasia) Pty Ltd 2021 FCAFC 65 the Full Court of the Federal Court (FCAFC) has allowed Fuchs’ appeal finding that Quaker’s standard and innovation patents were invalid on account of prior public disclosure.
Quaker had obtained a standard patent and a divisional innovation patent for methods of detecting high pressure fluid injection injuries. Such injuries were known to occur, particularly in mining operations, when fine jets of high pressure hydraulic fluid escaped from machinery at velocities high enough to pierce skin. The method patents involved specific sequences of steps, including the addition of a dye in the high pressure fluid which fluoresces when exposed to UV or blue light thereby allowing emitted fluid to be visible.
Quaker asserted contributory infringement by Fuchs for supplying or offering to supply its high pressure fluid products with a fluorescing dye additive, where the dye was not acquired from Quaker. It was accepted that there is an implied licence for dye additive sourced from Quaker to be added to Fuchs and other third party high pressure fluids. Fuchs counterclaimed that the patents are invalid on various grounds, including lack of novelty.
The trial Judge held that none of the invalidity attacks applied and that Fuchs is liable as a contributory infringer. Fuchs appeals that decision only in respect of the trial Judge’s finding that the public disclosures made before the priority date all fall within the grace period provision allowing for reasonable trials in public. The disclosures in question involved oral disclosure of the key concepts of the inventions along with some demonstrations showing that the dye could be detected under pig skin to key mine staff. These disclosures were considered necessary in order to get approval to conduct a reasonable trial using mining machinery. While the public disclosures did not amount to working of the invention, the trial Judge held that they fell within the ambit of the grace period as they were necessary precursors to enabling reasonable trials to take place in public.
The priority date of both patents was 2nd September 2011, meaning that the 12-month grace period for public disclosures due to trials that were reasonably necessary to be conducted in public extended back to 2nd September 2010. These dates also mean that the pre-Raising the Bar legislation applies.
Fuchs argued that the Patent Regulations are quite precise in specifying the prescribed circumstances in which the grace periods apply, and that the trial Judge erred by finding that preparatory steps fell within the reasonable trial grace period provisions. Fuchs argued that section 24(1)(a) and in regulation 2.2(2) do not permit of an approach whereby anything at all done “for the purposes of” or “as a necessary precursor” or “directed towards” the prescribed circumstances are “in the prescribed circumstances”. With specific regard to in regulation 2.2(2)(d) providing a grace period the reasonable trials that were reasonably necessary to be conducted in public Fuchs argued that the necessity criterion had to be met but was not for the disclosures in question.
Quaker argued that Fuchs construction gave too much weight to the regulations to the extent that it changes the legislative effect of the relevant primary legislation – being section 24 and its ‘any information made publicly available’ criterion. Quaker argued that properly understood the grace period provision is not limited to particular uses of the invention in trials, but extends to actions undertaken in order to have the trials conducted.
The FCAFC rejected Quaker’s argument and held that the trial Judge had been too expansive in construing the provisions. It held that the ‘any information made publicly available’ criterion in section 24 needs to be understood relative to how the information was made publicly available as required by the ‘in the prescribed circumstances’ criterion of that section. The FCAFC found that the prescribed circumstances are limited to and must describe a publication or use of the invention. It is only once it has been identified that a working in public satisfies the purpose and reasonable necessity requirements that the phrase “through any publication or use of the invention in the prescribed circumstances” can be meaningfully applied. As such they agreed with Fuchs’ contention that section 24(1)(a) is not so broad as to permit of an approach whereby anything at all done “for the purposes of” or “as a necessary precursor” or “directed towards” the prescribed circumstances are “in the prescribed circumstances”.
The FCAFC were prepared to accept that the concept of working in public can be broader than actually carrying out or performing the method, and could include for example written or oral communications that have some direct or close connection to the physical working. However, they found that at least two of the disclosures would not qualify as working in public as they were too distant and did not need to have been conducted in public settings, and so held the patents to be invalid.
Author: Quinn Miller