07 May 2012

Dual Failures in Patent Office Decision on Inventive Step?

In re: application by Paul Andrew Cronk [2012] APO 28 (21 March 2012)

Inventive step – assessment on ‘balance of probabilities’ – relevant law applying to application filed on 26 February 2003

LuminaireA patent hearing officer has upheld an examiner’s finding that claims directed to a ‘mushroom stud and keyhole’ arrangement for assembling a lighting unit (‘luminaire’) are obvious and lacking inventive step, despite provision by the applicant of evidence arguably supporting a contrary view.

Interestingly, however, examination of the application seems to have proceeded on the basis that it would not be permissible to combine the teachings of two prior art documents in order to establish obviousness of the claimed invention.  This was indeed the case under the Australian law of inventive step prior to 1 April 2002.  But we are not sure that it was the appropriate law to apply the case of this application. 

Australian patent application no. 2008229901 in the name of Paul Andrew Cronk is for ‘A Luminaire Reflector Locating Arrangement’, and derives (as a divisional) from an earlier application having an effective filing date of 26 February 2003.

We are inclined to question a finding of a lack of inventive step which is not supported by the only actual evidence presented at the hearing.  But unless we are missing something here, the bigger question is why the examiner, and the hearing officer, apparently failed to apply the post-2002 law in this case.  This is especially perplexing, when the amended law substantially favours the Patent Office position that the claims are not inventive!

It is possible that we will ultimately get a definitive answer to both questions, because on 11 April 2012, Cronk filed a Notice of Appeal against the decision in the Federal Court of Australia (no. NSD532/2012).

THE ALLEGED INVENTION

The patent specification relates to lighting arrangements, and more particularly to assemblies in which curved reflectors are provided behind a fluorescent tube, which are adjustable in order to control the focus of light onto items positioned below.

The evidence suggests that such luminaires are commonly employed in hydroponic nurseries for directing light onto plants growing beneath the lamps.

Prior art luminaires were assembled using nuts and bolts, or similar fasteners, which were evidently cumbersome and time-consuming to fix in place.  The claimed invention provides a simpler method of assembly, based upon a ‘mushroom stud and keyhole’ arrangement.

Specifically, claim 1 defines the invention as follows:

1. A locating mechanism for a pair of reflector sheets from which the reflector of a doubly arched luminaire is assembled, said mechanism comprising at least one mushroom-shaped stud on one of said sheets and a corresponding keyhole shaped aperture on the other of said sheets, said stud comprising a stalk and a cap and said aperture comprising a main opening and a smaller extension wherein each said stud and aperture are dimensioned so that said cap can pass through said main opening but not said extension and said stalk can be retained in said extension with a friction fit.

The features in question are clearly visible in Figure 3 of the drawings in the patent specification, reproduced below.  The ‘mushroom studs’ are identified by numeral 107, and the keyhole-shaped slots by numeral 127.
Mushroom stud and keyhole
The main prior art reference was an earlier patent application by the same inventor (Paul Andrew Cronk).  The earlier application shows similar sheet metal components with holes for joining, but does not provide any description of the specific means used to effect the joins (see decision at [12]).

So the use of the ‘mushroom stud and keyhole’ arrangement was novel.  The only issue raised during examination of the application was whether it was inventive.

THE TEST FOR INVENTIVE STEP

Under the pre-2002 law, it was necessary to establish that any elements of the invention missing from a single prior art document could have been derived by some obvious process from the common general knowledge (CGK) of the skilled worker in Australia.  This is necessarily a matter for evidence, normally provided by someone having suitable experience within the relevant local industry.  Documents or other information derived from international sources would not usually suffice for this purpose, unless corroborating evidence establishes that they are representative of the Australian situation.

One approach approved by the High Court is summarised in the decision (at [27]):

… any potential solution to a problem will not be obvious unless it would have been a matter of routine to try that solution, but with the significant caveat that there must be an expectation that the potential solution "might well" solve the problem. It is not necessary that success is guaranteed.

In this case, therefore, it would be necessary to establish that the use of the ‘mushroom stud and keyhole’ arrangement is one which would have presented itself routinely to an uninventive worker in the field, with the expectation that there was a good chance it would be effective.

THE EVIDENCE

The examiner identified a number of additional prior art documents (including US and Japanese patent specifications) which showed the use of mushroom studs and keyhole slots in a variety of different applications.  The supposed significance of these documents is explained in the decision (at [32]):

The evidence produced by the examiner is a number of patent applications that show the use of keyhole slots. The examiner has not argued that any of these documents are themselves common general knowledge, and indeed such an argument could not be sustained. The examiner has advanced these documents to show that the concept of using keyhole slots and mushroom studs to join metal elements is well known.

These documents are not ‘evidence’ that would, in itself, be admissible in court.  However, the Patent Office acts in the capacity of an administrative tribunal, and is not bound by the rules of evidence.  Nonetheless, it is worth bearing in mind that the mere existence of documents does not, in itself, establish a number of key elements required for the proper assessment of inventive step, such as:
  1. whether the documents in fact contain information that was well-known to persons working in the field at the priority date of the application;
  2. if so, whether this information would indeed present itself as a ‘routine’ option to simplify the assembly of luminaires of the type described in the specification; and/or
  3. whether there was some reason the skilled person would not consider that a ‘mushroom stud and keyhole’ arrangement ‘might well’ provide an effective solution (e.g. there may be manufacturing or safety issues to consider).
The applicant’s evidence, on the other hand, included statutory declarations by two Australians working in the hydroponics industry who are familiar with the lighting arrangements in question, along with a declaration by his patent attorney.  This evidence established that:
  1. customers considered the luminaires having the ‘mushroom stud and keyhole’ arrangement to be a significant improvement over nut-and-bolt assembly, such that they were willing to wait for stock, and pay a price premium;
  2. the use of a ‘mushroom stud and keyhole’ arrangement for interconnection of metal sheets was unknown to a senior member of the hydroponics industry; and
  3. on at least one earlier occasion, another inventor had identified the problem with assembly of the luminaires, but had nonetheless failed to solve it in the manner of the claimed invention.

THE DECISION

It is well-established that the Patent Office must apply a ‘balance of probabilities’ test when assessing inventive step (see decision at [29]-[30]).  This requires the evidence on both sides to be weighed-up, and a decision to be made as to whether it is more likely than not that the claimed invention was – or was not – obvious.

On the face of it, the evidence in this case, on both sides, is fairly weak and of an indirect and circumstantial nature.  All the patent examiner had done was to find some documents showing that ‘mushroom stud and keyhole’ arrangements had been used for various purposes over the years.  The applicant, on the other hand, had established that the claimed invention was popular with customers, and had not been devised previously by an inventor looking at similar issues.  This is suggestive that the invention was not obvious to people at the time, but hardly conclusive.

But at least the applicant had evidence from actual people experienced with the product in question, both of whom appeared to think the claimed arrangement was a pretty good innovation.  The examiner had, perhaps, a feeling that the invention should be obvious, along with the results of a patent search specifically directed to finding documents describing use of ‘mushroom stud and keyhole’ arrangements.

In our view, the balance of probabilities in this case favours the applicant.  While the evidence of inventiveness may not be strong, there is no credible evidence as to what would, or would not, have constituted ‘routine steps’ for the skilled work at the priority date.  The examiner’s patent search was motivated and directed by hindsight knowledge of the claimed invention.

However, the hearing officer took a different approach.  He firstly considered the documents identified by the examiner, and concluded that these established a ‘prima facie’ case of obviousness (at [39] and [46]).  He then considered the evidence provided by the applicant, and asked whether, on the balance of probabilities, this evidence was sufficient to rebut the presumption of obviousness (at [40]-[45]).  He concluded that it was not (at [46]).

THE ERROR IN THE APPROACH TO INVENTIVE STEP

With all due respect to the hearing officer, the approach that he took to weighing-up the evidence is clearly incorrect.  Deciding on the ‘balance of probabilities’ requires a dispassionate side-by-side assessment of the competing evidence.  This is not the same thing as considering whether the evidence on one side creates a prima facie case of obviousness, and then requiring the applicant to rebut this presumption on the balance of probabilities.

This case is a perfect illustration of why this approach is wrong.  The evidence on both sides is inconclusive and circumstantial, however taking either side alone is sufficient to support an initial presumption in favour of either the examiner or the applicant.  Once such a presumption is established, the evidence on the other side provides insufficient rebuttal, precisely because it is inconclusive.

To put it another way, if the hearing officer had looked at the applicant’s evidence first, it might be said that a prima facie case of inventiveness was established – after all, two people familiar with the product in question considered it a substantial improvement over its predecessors, while an independent inventor had failed to reach the claimed solution to the limitations of the prior art.  It hardly seems likely that a few patent specifications, cherry-picked from the contents of the global databases, would be sufficient to rebut such a case, despite its circumstantial nature.

In short, a balance of probabilities cannot be evaluated if priority is given to one side or the other.  The cards must be laid out on the table, and read as a whole.

WAS THERE AN OVERSIGHT IN APPLYING THE LAW?

The Patents Amendment Act no. 160 of 2001 commenced on 1 April 2002.

Item 4 of Schedule 1 amended the provisions of the Patents Act 1990 relating to inventive step such that an obviousness case could be based on ‘a combination of any 2 or more pieces of prior art information, being information that the skilled person … could, before the priority date of the relevant claim, be reasonably expected to have ascertained, understood, regarded as relevant and … combined’.

In other words, the amendment expanded the scope of obviousness to include the possibility of combining information from multiple prior art documents, rather than being able to rely only upon the content of a single document in light of CGK.

Item 13 of the Schedule provided that ‘the amendments made by this Part apply in relation to .. patents for which the complete application is made on or after the day on which this Schedule commences’.

In this case, priority was claimed from a provisional application originally filed on 27 February 2002 (i.e. before 1 April 2002), however the initial complete application was not filed until 26 February 2003, i.e. after 1 April 2002.

The amended provision therefore appears to apply to the application.  The examiner – and the hearing officer – could, and should, have argued that the invention could be derived by an obvious combination of the earlier Cronk application, and any one or more of the various prior publications disclosing a ‘mushroom stud and keyhole’ arrangement.

Evidence would still have been admissible on the issue of whether the skilled person could reasonably have been expected to make the combination in question, but the balance of probabilities may well have then been quite different.

CONCLUSION

It seems a bizarre situation that the Patent Office may have applied faulty reasoning on one hand, and less favourable law on the other, and yet possibly managed to stumble upon the correct outcome!

We have some sympathy for the position of the examiner and the hearing officer in considering the claimed invention in this case to be obvious – it certainly does not appear to be one of the great technological breakthroughs of out time!  However, the law is what it is, and it must be applied without fear or favour in the most objective manner possible, to all cases.

The reasoning in this case was not objective, because it arbitrarily gave precedence to the examiner’s conclusion, setting the applicant a burden of rebuttal, rather than weighing-up all of the evidence together as required for a true ‘balancing’.

And yet, at the same time, it appears that an unnecessarily restrictive earlier version of the law was applied – a law which, on the face of it, should have favoured the applicant.

If the Federal Court appeal proceeds, the final decision should make for interesting reading!

23 comments:

guest said...

this is clearly another case of the examiners being incompetent or simply corrupt. I would like to think its another case of corruption. i just can't imagine how any trained examiner could possibly have misinterpreted the facts and the law. 

guest said...

why was my previous post removed? you must be one of them, mark.

Patentology (Mark Summerfield) said...

I have emailed you to explain.  I was merely applying my stated moderation policy, which prohibits 'statements that are defamatory ... towards other participants in the discussion, or any other individual (whether or not they have a role in public life)'.

guest said...

 thanks. assume the examiners were competent and well-trained with sufficient legal skills to make informed and logical decisions on the validity of an invention, what could possibly have caused a competent and well-trained examiner to produce a conclusion that has little or no evidentiary and legal support? 

It seems like the outcome of the case was already decided whether or not there was sufficient evidence to support the outcome.

Patentology (Mark Summerfield) said...

If the updated law had been applied, it should have been easier to make the case for a lack of inventive step, even in the absence of evidence.  The Federal Court has expressed some approval for the Patent Office to apply the experience and technical knowledge of examiners in drawing reasonable inferences about the identification and use of prior art documents when assessing inventive step.

Once the Raising the Bar amendments come into force next year, it will be easier still to establish obviousness in these types of cases.  This may become relevant if the applicant continues to file divisional applications in pursuit of his claims.

This is really more suitable subject matter for an innovation patent.  But, of course, having an effective date in 2003, its eight-year lifespan would already be over!

guest said...

Yes we may conclude, in hindsight, that the examiner has applied his/her experience and technical knowledge to the assessment of the application.

However, did anyone predict the outcome PRIOR to the publication of the examiner's remarks? You have correctly said that the 'balance of probability' rationale has been incorrectly applied, leading to a biased and confusing outcome.  

Patentology (Mark Summerfield) said...

Let me put it this way: I do not think that these claims would have got up under US, European, Chinese, Japanese or New Zealand law.  In any of these countries, the numerous documents showing that the fastening arrangement was known would be sufficient to establish that using it for assembly of sheet metal luminaires is not inventive.

Our law of inventive step will not be on a par with these foreign jurisdictions until the Raising the Bar amendments come into force.

I can fully appreciate why the examiner and hearing officer would believe that there was no invention here.  That the law might not permit them to arrive at a corresponding decision suggests a problem with the law which, fortunately, parliament has just set about fixing!

guest said...

so an Australian examiner must also consider the laws of other jurisdictions when examining an Australian application in Australia?

Why would you be sympathetic towards an examiner who intentionally applied faulty reasoning? You cannot reach a correct outcome from applying faulty reasoning unless the outcome was already decided prior to the consideration of the law and the facts.

Ecca said...

Was the wrong law applied? What if the priority date for the claim was the original filing date?

Patentology (Mark Summerfield) said...

With respect, I do not consider that to be a reasonable characterisation of what I wrote. And there is no basis to suppose that the examiner's actions were 'intentional' in the manner you appear to be implying. Getting the right answer for the wrong reasons is, in my experience, a perfectly commonplace event in the law, as well as in everyday life.

Ecca said...

Mark, any comment on the need for the examiner to have first worked out the priority date of the cliam(s) to find the legal timeframe applicable to deciding inventive step?

guest said...

 lets not forget that the application would have gone through several examiners before it was rejected.

I have no personal interest in this application but i do not believe that this faulty reasoning was possible when the application must had been reviewed by several experienced examiners. 

Patentology (Mark Summerfield) said...

As explained in the article, the relevant date is the filing date of the complete application.  I have provided a link to the relevant schedule in the amending Act, so you can check this for yourself.

The Examiner's Manual also covers this in a number of places: see e.g. Sections 2.4.4.4, 2.5.1.1, 2.5.1.2, 2.5.1.4.2, 2.5.2.5.5, ...

Assuming that the claims are adequately supported in the earlier provisional application, they do indeed have a priority date earlier than 1 April 2002.  But this is not the date that matters.

Of course, there is another possibility.  The examiner, and the hearing officer, may both have considered the possibility of combining documents under s 7(3)(b), decided this was not viable, and neglected to mention it.

We will probably never know.

guest said...

 i am not a lawyer but are you suggesting that an examiner should apply most recent law on applications that were filed before the law was amended?

Ecca said...

Guest, I think retrospectivity in legislation is often unfair and that seems to be the outcome in this case, if what Mark says is correct. It's not fair on an inventor that the prior art rules should change after the priority date to which they apply has been fixed. It means that a provisional patent may not preserve one's rights as may be reasonably expected. This undermines the purpose, one of which is for an inventor to raise funds required to peddle the patent treadmill.

Of course a good pre-2002 patent will have survived the change anyway :) yet I feel for those poor innovators whose goal posts have been moved in the middle of their game.

guest said...

not only is applying new law on patents that were filed under the old law unfair to the inventor but it may seem fraudulent because the patent office has shifted its stance without providing appropriate/satisfactory explanation to the public.

The patent office keeps too many secrets to itself, there is no transparency on its decision making process.

Patentology (Mark Summerfield) said...

There was plenty of advance warning of the changes (six months, if I recall correctly).  You have to remember that most priority claims in Australia are based on earlier foreign applications (about 90% of all Australian patent filings are by foreign entities), and not to Australian provisional applications.

Also, provisional applications are not subject to examination, and many provisional applications do not proceed further.

Finally, the 20-year term of a patent does not begin at the priority date, it begins at the complete filing date.  So until someone makes the decision to proceed with a complete application, they have nothing except a potential priority claim.

The line has to be drawn somewhere.  It is neither a retroactive action, nor unfair, to draw it at the beginning of the 20-year patent term, and to have a six-month commencement period during which anyone with a pending provisional application can proceed with a complete application under the 'old' law.

guest said...

 mark,

your explanation seems plausible in theory but  in practice patent examiners often make confusing and contradictory statements that have no legal or factual grounding. Examiners in other jurisdictions have been prosecuted for incompetence. i just dont believe the patent office practices everything it preaches .

Patentology (Mark Summerfield) said...

My explanation is not merely 'plausible in theory', it is the law as passed by the Australian Parliament in 2001, and which came into force on 1 April 2002.

We now seem to be discussing three separate issues.  The first is whether it is 'fair' that a claim having a priority date based on a provisional filed before 1 April 2002 should be examined uder the amended law if the complete application was filed after that date.

The short answer to this is that it is irrelevant whether or not you think it is 'fair'.  It is what the Parliament (not the Patent Office) decided to enact, and so it is the law.

The second issue is whether (as seems to be the case) the examiner here applied the wrong law.

The third issue is whether, under the law as applied by the examiner and the hearing officer, the reasons given are persuasive.  That is, as with many legal questions, to some degree a matter of opinion, and I have made mine fairly clear.

I also think I have been pretty clear that I consider the claims probably invalid under the post-2001 law.  In other words, if the correct law is applied, such dubious reasoning is not required to make the case for lack of inventive step.

Finally, I would be fascinated if you could provide details of a case in which a patent examiner has been prosecuted for incompetence.  I have never heard of such a thing!

Ecca said...

I agree that nothing can be done if Parliament has decided before a patent is granted so there's no fraud on the part of the patent office and in that case never was. However from the inventor's point of view, a 20-year grant from the date of the Application is no good if the provisional application is no longer viable because the rules have been changed after filing. (6 months <> 1 year).

Mark, in view of the present changes, isn't it true that an inventor who filed early to secure a priority date may find out that the specification made under the old rules is not up to standard to properly support claims which at the date of filing would have been fairly based on the spec? If so, the inventor looses the priority date. And when will the inventor find this out? When the examiner finally rejects the claims possibly after publication, at which point all might be lost.

Unless I'm mistaken, that seems like unfair retrospective legislation to me. There are hidden reefs for inventors in "raising the bar".
 
Related topic: Will the new standards also
somehow raise the bar of revocation? Or will they open the floodgates of
litigation as lawyers nit-pick specifications (harder than examiners) with new hope of discrediting the
inventor's claims on a technicality? (Even if only to get a better negotiating
position or deep-pocket the inventor.) If the bar of revocation has not been
correspondingly raised, has raising the bar of validity devalued
the Australian patent system, by making more grounds for revocation?
And if the bar is a little lower in the US, and/or a US patent is less likely
to be invalidated, shouldn't Australian inventors almost always now prosecute
in the US first (rather than risk rejection in little AU for the US examiners
to now see published online)? Have Australian inventors (as 10% minority users) been mugged?

guest said...

i found the case on google last year, hope its still on there. did you work as an examiner, mark?

guest said...

i am not a lawyer but i believe the issues you have raised are less of a concern to inventors and patent attorneys compare to unexpected shift of stance in the patent office application of the law. 

Ecca said...

Guest, I'm not a lawyer either, but if patents under the new rules can be easily attacked and can only be enforced with difficulty, complaints about patent office policy (which is subject to review) are surely a side issue, if the overall system is misfiring. You are right that this may not be a concern to patent attorneys and inventors yet, but there's no point getting a patent unless it can be reasonably enforced.

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