Richard Bass Pty Ltd & Anor v Seafood Innovations Pty Ltd [2012] HCATrans 24 (10 February 2012)

Last Updated: 21 February 2012

Replacement Transcript

[2012] HCATrans 024

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Brisbane No B40 of 2011

B e t w e e n -

RICHARD BASS PTY LTD ACN 010 643 197

First Applicant

RICHARD ROBERT BASS

Second Applicant

and

SEAFOOD INNOVATIONS PTY LTD ABN 67 096 070 932

Respondent

Application for special leave to appeal

FRENCH CJ
BELL J

TRANSCRIPT OF PROCEEDINGS

FROM CANBERRA BY VIDEO LINK TO BRISBANE

ON FRIDAY, 10 FEBRUARY 2012, AT 11.43 AM

Copyright in the High Court of Australia

MR S.L. DOYLE, SC: May it please the Court, I appear with MR J.M. HORTON for the applicants. (instructed by Adamson Bernays Kyle & Jones Lawyers)

MR S.C.G. BURLEY, SC: May it please the Court, I appear with MR A.D.B. FOX for respondent. (instructed by Bennett & Philp Solicitors)

FRENCH CJ: Yes, Mr Doyle.

MR DOYLE: Your Honours, this is an application which concerns two innovation patents, each for a fish stunning apparatus, the object of which is to have commercial numbers of fish enter, be held, stunned and then released for further dealing. The applicant produced what is alleged to be an infringing device in relation to the first innovation patent. It was ultimately held that there was an infringement, the Full Federal Court overturning a determination there had not been. In relation to the second innovation patent, I challenged the validity of that patent and that challenge was ultimately unsuccessful on appeal. In relation to the first patent, the question was merely one; is there an infringement? Your Honours, this Court in the decision - - -

FRENCH CJ: That turned upon the construction of the claims, did it not?

MR DOYLE: It did, and in a characterisation of the nature of the infringing device, and it is that aspect that I want to take your Honours to, if I may?

FRENCH CJ: Yes.

MR DOYLE: This Court in the Commonwealth Industrial Gases Ltd v MWA Holdings Pty Ltd, which is in our list, identified at page 168 the.....of an infringement and it is in these terms:

if the alleged infringement differs materially from an essential feature of the plaintiff’s claim, there can be no infringement.

The point of principle which arises in this case and the point at which the Full Federal Court fell into error, in our submission, concerns the point of abstraction or the level of abstraction at which that question is to be tested.

FRENCH CJ: By reference to the word “allows”?

MR DOYLE: No. That is part of it, your Honour, but that is only part of it. Your Honours obviously have read what is below about the nature of these devices. The difference is that the alleged infringing device operates to hold the fish and then to release them by a gripping fashion described by the trial judge as sphincter-like. The claim does not have that device. It has a floor which is raised and lowered to allow the fish to be released. In that context there was a debate about whether, in fact, it did allow and so on, but I will come back to that aspect of the case in a moment.

The point of departure, we submit, is that the trial judge asked the question at a proper level of abstraction, what is the nature of the infringing device, and here he described it as a sphincter device, a gripping device, whereas the approach adopted by the Full Federal Court was to disaggregate that device into a series of component parts and to break it up into a chin plate, which is equated with a floor, and other parts and concluded because the chin plate could be described as a floor which moved to allow the fish to pass on, it contained an infringing element of the claim.

Now, literally, putting aside our argument about the words “to allow”, that is true, but it is wrong because it approaches not the question whether the alleged infringement differs materially from an essential feature of the claim, but given that the applicant’s device differs materially from an essential feature of the claim, the only way you can identify an infringement is to disaggregate the infringing device into little bits to be left with a part that is the same as the claim.

BELL J: This seems to be a re-crafted argument to the way the matter was presented before the primary judge. When one goes to application book 16 and to his Honour’s reasoning commencing at paragraph 76 where his Honour notes that that the chin plate is necessary for the purpose of allowing the fish to pass unidirectionally, but not sufficient – this is in the devices said to be the infringing devices, is that right, where you had the two other plates that in combination created the sphincter effect?

MR DOYLE: Correct.

BELL J: From 76 on, the argument that his Honour is addressing proceeds on the basis that in the infringing devices the lowering of the chin plate was not sufficient, albeit necessary, and then to the consideration of the language of allow and permission, and that is the way the matter seems to have progressed before his Honour.

MR DOYLE: They are two parts of the same question. Can we ask your Honours to the application book at page 76, which is our written argument, where in paragraph 22 we have extracted some things from the learned trial judge’s findings and there, as we would see it, the chin plate of the applicant’s device was a part of a larger mechanism and the judge used terms “joint operation”, “sphincter-like” and so on. So that the way in which the case was advanced before his Honour was that the difference between the alleged infringing device and the claim was that the – I will call it the Bass device – the applicant’s Bass device operated in unison with these various plates and because of that, his Honour concluded it was a fundamentally different mechanism.

BELL J: Where did his Honour conclude that?

MR DOYLE: In paragraph 87 of his reasons at page 18 of the book. Now, part of that, of course, is to recognise that the reason why the movement of the chin plate is a necessary but not sufficient event is because of the other feature of the gripping device which his Honour correctly identified as operating in unison to release the fish. We do not believe, with respect, that there is a difference between the way in which the case was presented at trial and the way I am putting it now, that the way in which the case was urged is because the applicant’s device operated in a different fashion such that merely moving the chin plate, whilst a necessary event, was not sufficient, that that made it a different mechanism such that it did not operate so as to infringe the claim.

That is, in our submission, the arguable error. It is also the point of principle because the question which needs to be clarified is at what level of, as I have described it, abstraction the test between the infringing and the claimed device is to be made or, perhaps putting the other way around, is the way in which the Full Federal Court approached it correct, to disaggregate, to break up an element of the alleged infringing device into little bits so as to identify a part of that bit as infringing the claim?

BELL J: I confess, it is not clear to me that the Full Court was addressing this argument, that is, it is not clear that this is the way the matter was put. The Full Court appears to be addressing the argument respecting the significance that his Honour placed on the word “allowing” integer 5 of claim 1.

MR DOYLE: Your Honour, they are parts of the same question.

BELL J: I understand you say that, but you are critical of the Full Court for its failure to deal with this important point of law and I am just wondering whether they were invited to.

MR DOYLE: Can I ask your Honour to go, please, to page 44 of the application book to paragraphs 23 and 24 in the reasons of Justice Bennett? Your Honours have read this?

BELL J: Yes.

FRENCH CJ: Yes.

MR DOYLE: The reasoning process that her Honour adopts is to reject the contention that my side put below by saying, if there had been a flap further downstream, for example, that would be the identification of the integer of the claim plus some additional integers which operate as necessary elements to release the fish, and her Honour concluded because that could not be right, you can infringe by having an essential integer at this point and an additional integer further downstream. Because that cannot be an answer to an infringement claim, it must follow similarly for the Bass claim. It is no answer to say the mere movement of the chin plate is not enough, you need to move the sides and the top. That is precisely our point, because her Honour is in fact making plain the disintegration of the device by the example she gives. She is treating as synonymous a gripping device which must operate in unison to release the fish with a floor that moves and a downstream separate device which is required to be moved. Now, in our submission, that exposes the error, contrary to what we submit is the right approach, which gives rise to this point of principle.

BELL J: Did Justice Greenwood deal with this in his separate reasons on the point going to the first innovation patent?

MR DOYLE: No, his Honour did not. His Honour adopted all the reasons given in respect of – I am sorry, I think that is right – yes, there was no separate discussion of those at this point. Your Honours, if I may, the second and related error to which we point concerns the construction of the words “to allow”.

FRENCH CJ: I am sorry, I just want to go back for a moment to CIG. The proposition or, if you like, the point of principle which you say is transgressed by the Full Court approach is the statement at the beginning of the first paragraph, I think:

if the alleged infringement differs materially from an essential feature of the plaintiff’s claim, there can be no infringement.

MR DOYLE: Yes, that is so, your Honour.

FRENCH CJ: That is basically it.

MR DOYLE: Yes, and the aspect which requires clarification is just at what level of abstraction one answers that question.

FRENCH CJ: Indeed, yes.

MR DOYLE: That is the test.

FRENCH CJ: The problem is, to say we need to discover the level of abstraction as a matter of principle, it may not give you a very satisfactory answer. I mean, how does one tie down the level of abstraction?

MR DOYLE: One does so, as we would urge, by looking through the eyes of a skilled addressee, looking at the device, how it operates. If it operates only in a particular fashion, only by releasing the grip, it is wrong in assessing whether it is infringing a claim to break it up as if it operated in separate components. Now, that is particularly apposite to this case, but it could, in our submission, plainly be applied to other cases.

FRENCH CJ: So the skilled addressee – I am putting this crudely – asks the question, is it really different or is it just, to borrow from another field of discourse, a fraudulent imitation, so to speak?

MR DOYLE: Yes, I suppose the anterior question is, is it really different as it functions?

FRENCH CJ: Yes.

MR DOYLE: Think from how you might break it up and write it down on a piece of paper and the question as it functions cannot be answered by breaking it up into various components.

FRENCH CJ: All right.

MR DOYLE: Your Honours, as I said, the second question which arises in respect of the first innovation patent is the question of construction, the words “to allow” separately from the point that I have just been addressing. We rely upon what we said in the written submissions for that. That is a question of construction. Your Honours will appreciate that ultimately we contend that if moving the floor does not allow the fish to pass because some other barrier is operating together with the floor to prevent that occurring, it is to distort the language to say that the movement allows the fish to pass, but that, we accept, turns upon the construction of this patent alone. Your Honours, turn to the second - - -

BELL J: I am sorry. Just to be clear about it, neither of the challenges respecting the first innovation patent in the way the argument is now put take up a Fox v Percy point?

MR DOYLE: No.

BELL J: Yes, all right.

MR DOYLE: Your Honours, the second patent, the challenge there was to its validity or invalidity, and we have two related challenges. The first concerns the failure of the claims to define the invention, contrary to section 40(2)(c), and the other is the absence of the claims being fairly based on the matter which they did in the specification. They really do overlap a great deal, but if we can ask your Honours to go in the application book to page 50 - - -

FRENCH CJ: Are you still contending that the approach to fair basing and sufficient definition in relation to the innovation patent is to be informed by some constraint on the use of innovation patents under section 79B?

MR DOYLE: I will answer that this way, if I may, your Honour. We do not contend that we can point to an error as to how that was dealt with below because - - -

FRENCH CJ: No, because it was not really raised.

MR DOYLE: No, and that is why it has been omitted from our application. It may well be that assuming we were to obtain special leave, the proper construction would require reading the Act as a whole and there may well be features of that that emerge, but we do not suggest there is any error in respect of the Full Court’s treatment of 79B. Your Honours, I ask you to go to the application book to page 50 and we want to direct your attentions to paragraphs 44 and 45, particularly starting about halfway down 44 to the passage commencing:

The claims are not required to provide instructions as to how to make the apparatus work. The claims are required to define the invention so as to make clear the monopoly claimed by the patentee. To the extent that Bass submits that the claims claim a narrower embodiment –

and so on, and then if your Honours could read what is said in paragraph 45. What section 40(2)(c) requires is an anterior consideration of what is the invention, that is, the section requires that the claims define something and the something is the invention. That involves defining what this Court in the Kimberley-Clark decision has described as the embodiment which is described and around which the claims are drawn. So that to identify the invention, it is not sufficient to say what is stated in the claims is the invention because that would rob the words “define the invention of content”. One needs to engage in the anterior question of what is the invention which the claims then define.

Now, in the present case, the trial judge adopted what we urge to be the correct approach. He read the whole of the specification, through the eyes of skilled addressees – his Honour had the benefit of expert evidence and so on – and his Honour came to a conclusion which your Honours will have read in the application book at page 25.

BELL J: This is paragraph 116?

MR DOYLE: I was going to ask your Honours to read 114 through to 117, but your Honours have the point.

BELL J: His Honour considered the claims did not disclose the elements necessary to make the invention work at 116

MR DOYLE: This is so.

BELL J: That seems to be the point of departure in the unanimous view of the Full Court.

MR DOYLE: That is right. His Honour having understood how – the description of the invention by reference to reading the specification with the benefit of the skilled addressee evidence identifies something as an invention, an essential part of which is describing how the fish are got in, held and then released. The error to which we point in the way in which the Full Court has approached it is to treat as if that essential part, which we would urge is a part of the invention, can be dismissed as merely instruction about how to use the invention. So that the error, in our submission, is to not recognise that the means by which the fish are delivered to and from the zone where they are stunned is not merely instruction on how to use the thing which is otherwise the invention, but the invention in fact incorporates that and as we put it in terms of the operation of section 42C, you have to identify first the invention in order to see whether the claims do in fact define the embodiment of that thing. His Honour the trial judge, in our submission, approached it correctly.

Your Honours, the same point arises with respect to the absence of fair basis. The ultimate test we do not imagine is going to be controversial. It is whether one can say the invention identified in the claims has in a real and reasonably clear way been disclosed in the body of the specification. We have addressed it in our written submissions. I did not wish to say any more. We identify what we identify as the failure to identify an essential part in the claims such that the claims can be said to be unlimited by that essential part and thus travel beyond what is fairly and reasonably.....Those are our submissions, your Honour.

FRENCH CJ: Yes, thank you. Yes, Mr Burley.

MR BURLEY: Your Honours, the first special leave question raised by our friends does not arise, was not argued below and has since been abandoned by our friends it seems. The second special leave question also does not arise because the Full Court disagreed with the primary judge on the correct construction of the claim and then applied the primary judge’s findings to the operation of the impugned device to conclude that the correct construction when applied to the facts resulted in an infringement. Other points raised by our friends concern the questions of fair basis and a definition under section 40 of the Act and, with respect, our learned friends blur the distinction between the two and failed to apply a correct approach to that in their analysis.

I need not address your Honours further in relation to the divisional status of the applications as my learned friend has not addressed on it. In relation to the infringement argument, however, some important points of difference emerged between us. Firstly, as a proposition, the Commonwealth Gases statement that – the question is whether a substantially new mechanism arises, is one that must be understood in the context of the fundamental test for patent infringement which concerns whether the essential integers of the claim as specified are present.

In the present case, the court was addressing a very limited subset of that because it was accepted both before the trial judge at paragraph 38 at application book 10 and by the Full Court at paragraph 15, application book 42, that there was only one integer of the claim that was absent. That absent integer was one which concerned the presence of a fish guide as expressed within that integer of the claim. That, of course, is an important component of the analysis of infringement in all patent cases, which was whether particular integers within the context of the combination claim are present.

In the first innovation patent, your Honours have seen from the materials that there were three features, a fish stunning device with a fish stunner, a fish guide and a trigger. The construction question concerned the fish guide alone. The relevant claim included a floor which was pivotally movable between a first and second position and the essential components which were the subject of debate were to allow a fish to pass unidirectionally from the entrance to the exit. There was no dispute that the words “to allow” meant “permit” and the construction question was whether the claims required the movement of the floor to be the sole means by which the fish was able to move from entrance to exit or whether, as we submit it, a gloss would be applied to that integer to say, “To allow of itself or solely move from entrance to exit.”

There was no question in that context of disaggregation from the other integers of the claims which were conceded to be present. The Full Court’s examination of the claims was completely orthodox in that context and if your Honours turn to application book 43, paragraph 22 of her Honour Justice Bennett’s reasons, your Honours will see that her Honour said:

As a matter of common sense and by reference to the diagrams of the specification, the floor may be necessary to achieve the passage of the fish but the mere existence of the floor may not be sufficient for that purpose.

Then, after giving the example –

A construction that imports a requirement that the floor must be the only means by which the fish are permitted to pass introduces an impermissible gloss on the claim.

Her Honour then addressed the question of the combination component within the context of that specific integer. At paragraph 23:

The fact that additional integers must also be operated in the Bass devices to permit the passage of the fish does not avoid infringement any more than the addition of a further flap downstream of the pivotally moveable floor which needed to be raised could, by adding a further reason why the fish were unable to pass to the exit of the guide, be said to do so . . . The claim does not require that the passage of the fish is allowed only by movement of the floor. No such word is included in the claim, nor does the claim say that it is the movement of the floor of itself or by itself that allows the fish to pass.

Your Honours have observed on application book page 17 where his Honour the learned trial judge addressed the question, and that was again in the context of the particular integer, at paragraph 76 his Honour accepted as a matter of fact:

that the lowering of the chin plate is necessary to allow the fish to pass unidirectionally –

In that context, his Honour was considering how one construes the claim and applies it to the particular facts. That is precisely what the Full Court did. They applied it correctly. The notion of disaggregation of claims or aggregation of claims does not arise because they are undoubtedly aggregated. There was one contentious integer within that aggregation and when unified, it amounted to an infringing device. The application of the principle that to add something additional to a device that would otherwise infringe, does not avoid infringement.

Your Honours, our friends would have to succeed on that argument and also one of the two following arguments in order to have a prospect of overturning the findings of the Full Court. In this regard, the first point raised by our learned friends in their written submissions is lack of fair basis. There is, in our respectful submission, no substance to the allegation that there was an absence of fair basis and the analysis by the Full Court was completely orthodox within the well-established principles of Lockwood v Doric (No 1) to which we have referred in our written submissions.

The only argument advanced contrary to that proposition in the written submissions is that there was a failure by the Full Court to have regard to section 79B of the Patents Act concerning divisional applications which our learned friends now abandon. It is worth taking a moment, however, to address the concept of fair basis because it is clearly distinct from that of defining the invention. As the Full Court found, the question of whether the claim was fairly based on the specification required consideration of the specification as a whole to see whether the invention, as described, is as broad as that which is the subject of the claim. Her Honour Justice Bennett, with whom Justices Dowsett and Greenwood agreed on this point, at paragraph 40, addressed the point and observed that:

Although the claims are in what could be described as general terms, this appeal does not concern questions of novelty or innovative step. The only requirement of the fish guide in claim 1 of the second innovation patent is that it have an entrance and an exit and that it guides the fish below the striker so that the piston contacts the fish when the piston is in the extended position. That apparatus, according to the specification, will overcome the identified “difficulty” of the removal of the fish backwards from a stunning apparatus which is hindered by, and sometimes prevented by, the backlog of fish located on the table.

Then cutting down to the last two sentences of paragraph 41 after referring to Lockwood v Doric (No 1):

The invention consists, in its broadest embodiment, of the three integers set out at [6] above.

Your Honours will see that should be paragraph [7] above where her Honour refers to the consistory clause, the statement of what the invention is, by reference to each of those integers. The conclusion that the court found that, accordingly, there is no disconformity – my word, not the Full Court’s – but there is no travelling beyond the disclosure in the specification in the form of the claims because there is a conformity between the description of the invention in the specification and that in the claims. The reason why I took time to address on that, although our friends did not, is because the next question turns on section 40(2)(c) of the Act and the criticism advanced by our friends is that there needs to be an anterior identification of what the invention is, in a sense, which overlaps with that on fair basis. When one looks at the structure of section 40 one sees that it describes two essential things. The first, relevantly, subsection (2) of section 40 requires that:

A complete specification must:

(a) describe the invention fully, including the best method known to the applicant of performing the invention –

That is a requirement that there be a description in the specification and the claims of what the invention is and how it is performed. There is no allegation of insufficiency of disclosure in that context. Subparagraph (c) requires that the specification:

(c) where it relates to an application for an innovation patent – end with at least one and no more than 5 claims defining the invention.

In that context, the definition of the invention is that which is the subject of the claims. The requirement is that there be claims and that they define the invention. The question of whether those claims are in conformity with the description of the specification is one which turns on subsection (3), which is the fair basis question. This section disaggregates those, if I can use that word, three components requiring, firstly, that there be a claim which states what the invention is, and by invention, the definition schedule in the Act includes alleged invention. So it needs to state what the invention is in claims and the analysis of whether that statement of invention is sufficient in that it is described well enough in the body of the specification or is fairly based in that it does not go beyond what is described in the specification is left to subparagraphs (3) and (2)(a).

So in that context, when my learned friends submit that there was a failure on the part of the Full Court to identify what the invention is, they raise what is, with respect, a circular argument. What the Full Court did, and explained in paragraph 44 of the specification, was recognise the differing features of the requirement to define the invention, each of which have different roles. As the High Court said in the AMP v Utilux decision, to which we refer in our written outline, the requirement is that the claims

define the invention. That is to be construed having regard to the specification as a whole and the claims.

Accordingly, in our respectful submission, there is not an error or a mistaken approach in principle where the court looked at the reasoning of the primary judge and observed that the primary judge’s approach to definition was to construe claim 1, an omission asserted in claim 1, by reference to a feature present in claim 1 of the first innovation patent, namely, a particular means by which the fish moves from first position to second position. Instead, the question is whether there were claims which clearly and succinctly and otherwise within section 40 defined what is said to be the alleged invention within that definition. If it please the Court.

FRENCH CJ: Thank you. Yes, Mr Doyle.

MR DOYLE: Three things, your Honour. In terms of the infringement of the first patent, the difference between the parties is that our learned friends wish to say there is an infringement from the mere presence of an integer in the infringing device, whereas our contention it needs to be its presence as the integer and not some differently operating mechanism. Your Honours, with respect to the invalidity question, the construction of section 40(2)(c) that our friend urges is to rob the words “define the invention” of any content because, he says, that work is done by the complete specification which has to describe it in subsection (a) and by the fair basis test in subsection (3).

Your Honours would be slow, in our submission, to adopt a construction which deprived them of those words of content, but can we tell your Honours that those words were added to the Act in 2006 so that the respondent’s construction is that words were added which were completely otiose. In our submission, that cannot be right and that there the anterior step, as I have described it, of identifying first the invention and one that is done correctly having regard to reading the complete specification with the eyes of the skilled addressee. One cannot dismiss the feature with which we are concerned as being mere instruction of how to use it, but rather is in fact a part of the invention. Now, if that were accepted, then either the claims do not define that invention or the claims are not fairly based. Those are our submissions.

FRENCH CJ: Thank you, Mr Doyle. The Court will adjourn briefly to consider what course it should take.

AT 12.18 PM SHORT ADJOURNMENT

UPON RESUMING AT 12.24 PM:

FRENCH CJ: The first applicant manufactures a fish-stunning device for commercial use. The Full Court of the Federal Court held, in allowing an appeal against a judgment of Justice Spender, that the device manufactured by the first applicant infringed two claims of an innovation patent held by the respondent. The Full Court also held that a second innovation patent, admittedly infringed by the first applicant’s device, was not invalid for want of a fair basis on the matter described in the specification, nor for the failure of the claims to define the invention as required by section 40(2)(c) of the Patents Act 1990 (Cth).

The application, so far as it relates to the finding of infringement of the first innovation patent, reduces to a challenge to the construction of the claims of the patent by the Full Court, although the applicant did seek to assert an error of principle in the approach taken by the Full Court to determining whether its device infringed the claims.

So far as the challenge to the Full Court’s approach to fair basing and adequate definition is concerned, we do not consider that the court’s decision is attended with sufficient doubt to warrant the grant of special leave. Special leave will be refused with costs.

AT 12.26 PM THE MATTER WAS CONCLUDED