26 September 2011

Australian Appeals Court Further Clarifies ‘Purposive Construction’

Australian Mud Company Pty Ltd v Coretell Pty Ltd [2011] FCAFC 121 (15 September 2011)
Appeal from: Australian Mud Company Pty Ltd v Coretell Pty Ltd [2010] FCA 1169
See also: Innovation Patent Claims Once Again Construed Narrowly

Claim construction –  whether ‘device’ encompasses apparatus in two parts

pig-in-mud In an appeal from a decision of Justice Barker in the Federal Court of Australia, a full bench of the court comprising Justices Bennett, Gilmour and Yates has considered the interpretation of the term ‘device’ appearing in the claims of Australian innovation patent no. 2006100113, owned by the Australian Mud Company Pty Ltd.  In particular, the court was required to consider whether the term necessarily referred to a single unitary article, or would also encompass an apparatus having equivalent functionality yet implemented in two or more parts.

The court considered the application of the principle of ‘purposive construction’, derived originally from the words of Lord Diplock in the UK case of Catnic Components Ltd v Hill & Smith Ltd [1982] RPC 183.  Catnic was decided under the 1977 UK Patents Act which, considering the intended harmonisation with other member states of the European Patent Convention (EPC), requires a different – and more ‘expansive’ – approach to claim construction than was historically the case.  Nonetheless, Catnic (and its UK progeny Improver Corporation v Remington Consumer Products Ltd [1990] FSR 181) have previously received some degree of approval in the Australian courts.

This decision confirms, however, that the application of ‘purposive construction’ in Australia does not permit any deviation in scope from the patent monopoly defined by the patentee in the specific terminology adopted in the claims, and in particular that it is not permissible to import broader ‘inventive ideas’ from the specification.

Rather, it remains the case in Australia that the words chosen by the patentee to define the monopoly are determinative of the scope of the patent, even though those words must be interpreted with an eye to the purpose to which they have been applied in the specification and claims.  Terms should not be interpreted in an excessively pedantic or literal manner, but nor may they be ‘stretched beyond their textual limits.’

BACKGROUND

As explained in the joint decision of the court (at [7]-[8]):

The invention claimed in the patent is an orientation device for providing an indication of the orientation of a core sample obtained through drilling operations in geological surveys.

… These operations are typically conducted using a drill with outer and inner tube assemblies. A cutting head is attached to the outer tube assembly to which rotational torque is applied. In the drilling operation a core is generated which progressively extends along the inner tube assembly as the drilling progresses. Once the sample is obtained, it is … brought to the surface where it is removed from the inner tube and analysed. Because the drilling operations are performed at an angle to the vertical, it is desirable …  to have an indication of the orientation of the core sample within the ground prior to it being brought to the surface.

The patent specification describes a particular embodiment of an improved orientation tool which includes orientation-sensing and processing electronics within one unit, which is inserted into the bore during sampling.  The accused tool performs essentially the same function in a similar manner, but comprises a simpler ‘in-bore’ component, which communicates wirelessly with a separate handheld component that performs some of the processing functions of the patented tool.

The patent claims refer to a ‘device’, which the patentee contended to encompass not only a tool comprising a single component (as in its preferred embodiment), but also an equivalent apparatus comprising two (or more) separate components (as in the alleged infringement).

At first instance the judge disagreed with the patentee, finding that a proper construction of the claims encompassed only a unitary orientation tool.

THE APPEAL

Australian Mud  accepted that the primary judge was correct to adopt a purposive construction, as did Coretell. 

The patentee’s appeal was based primarily on the contention that in construing the claims as he did, the primary judge erred in putting aside what it described as ‘the bedrock of claim construction in Australia’ (at [51]), by which it meant the principle ‘that it is not legitimate to narrow or expand the boundary of the monopoly fixed by the words of a claim by adding glosses drawn from other parts of the specification.’

Specifically, the patentee’s contention was that although the specification describes an embodiment of the invention in which the orientation tool comprises a single ‘down-hole’ component, the claims are not so limited, and it is therefore impermissible to read this characteristic of the disclosed embodiment into the claims.

Coretell, unsurprisingly, agreed with the decision of the primary judge, arguing (at [56]) that ‘the claims of the patent do not comprehend the assemblage of the accused apparatus, being an apparatus in two parts which … provided an improved form of orientation equipment’.

More particularly, Coretell submitted that the patentee’s focus on whether or not the word ‘device’ could encompass apparatus in multiple parts was ultimately irrelevant.  Indeed, testimony provided by expert witnesses called by both parties had established that a ‘device’ might be unitary, or comprised of multiple components, depending upon the context.  The issue, in Coretell’s submission, was that a correct and consistent construction of the claims, taking into account surrounding words, and the ‘overall phraseology’, must necessarily result in the conclusion that the term ‘device’ had been used by the patentee to embrace only a unitary apparatus.

This was, essentially, the opinion of the primary judge.  We reviewed the reasoning in some detail in our coverage of the first instance decision (see Innovation Patent Claims Once Again Construed Narrowly), and therefore will not repeat the discussion here.

THE OUTCOME ON APPEAL

The appeal court upheld the decision of the primary judge, confirming that he applied the correct principles in construing the claims of the Australian Mud patent (at [64] and [74]-[78]).

In doing so, the court also took the opportunity to provide further guidance on the application of ‘purposive construction’ under the Australian law.  With regard to the UK law, the court stated (at [65)]:

In saying [in the Catnic decision] that a patent specification should be given a purposive construction, [Lord Diplock] was not suggesting that the words of the claim function other than as a definition of the invention. That, after all, is the task that the Act requires the claims to perform.

The court further referred to the decision of Justice Gummow (now a member of the High Court) in Nicaro Holdings Pty Ltd v Martin Engineering Co [1990] FCA 40, confirming that ‘for an Australian court dealing with patent infringement, Catnic did not propound any novel principle or new category of “non-textual infringement”’.  Specifically (at [69]):

To give a purposive construction to a patent specification, and in particular its claims, is not to engage in a process of reasoning that extends the patentee’s monopoly to the “ideas” disclosed in the specification. Nor does it extend the patentee’s monopoly to products or processes that the patentee did not, by the claims, define as the invention, even if those products or processes can be seen to perform the same function as the invention or to be based on the patentee’s “ideas”.

The court then went on to quote the primary judge (at [72]):

... there is no warrant for adopting a method of construction that gives a patentee what it might have wished or intended to claim, rather than what the words of the relevant claim actually say. While the Court should read the claims purposively and not with an eye for pedantry, even an appropriately liberal approach to construction should not permit the words of the claims to be stretched beyond their textual limits.

The appeal court also criticised the patentee’s approach to construction, stating (at [76]) that it ‘is really one that can be seen to have been taken with the accused apparatus in mind.’

CONCLUSION

Interpretation of patent claims under the Australian law is closely based upon the specific terms chosen by the patentee to define the monopoly.

The principle of ‘purposive construction’, as it is applied in Australia, does not provide license to interpret claims to encompass alternatives or equivalents that are not reasonably encompassed by the actual wording of the claims.

As harsh as it may sometimes seem, what is not claimed is disclaimed and (in effect) dedicated to the public.  The fact that an orientation device of the type described in the patent specification could be readily implemented as a number of communicating parts is something that the inventor (or the drafter of the patent claims) should ideally have foreseen. 

As we noted in the conclusion of our discussion of the first instance decision, the specification and claims could readily have been drafted in the first place so as to encompass multi-component embodiments.  However, once filed, and subsequently published, without internal support for such a broader conception of the invention, it is doubtful that there is anything that may be done to recapture the unrealised scope.

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