The Australian Patent Office has taken the (to my knowledge) unprecedented step of engaging an expert witness to assist in the defence of a Federal Court appeal from a decision to reject a patent application. Furthermore, in a result that should act as a warning to future applicants finding themselves in a similar position, the approach has been successful!
The commencement on 15 April 2013 of the ‘Raising the Bar’ IP law reforms lifted the standard of inventive step (or nonobviousness) in Australia to a level comparable with that of comparable developed economies, such as the US and Europe. However, the less stringent former law continues to apply to the multitudes of patents granted prior to the reforms, and to a majority of the thousands of applications that were still pending when the law changed.
But even before the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 had been drafted, IP Australia had announced its intention to begin the process of raising standards through changes in examination practice that would include a more rigorous approach to assessing inventive step. This may have been the reason for the difficulty experienced by applicant Paul Andrew Cronk in overcoming the rejection of his application no. 2008229901. An examiner’s rejection of the majority of claims in the application was upheld following a Patent Office hearing. I wrote about this original decision back in May of 2012.
This outcome was unusual in itself. Historically it has been very difficult for the Patent Office to maintain objections of obviousness, or lack of inventive step. The inquiry into whether or not a claimed invention is obvious or not is strongly evidence-based under Australian law. An applicant who provided even relatively weak evidence of inventiveness has usually been able to prevail, since the examiner is rarely in a position to provide any evidence at all, beyond documents found in the prior art search.
Standing by a rejection of this type was therefore a bold move, leaving the applicant with the options of abandoning the application, or appealing to the Federal Court. Mr Cronk called the Patent Office on its decision, and appealed. The Patent Office, in turn, raised the stakes, and obtained new evidence for use in the appeal. The court has found that the Patent Office’s evidence is more relevant and credible, and dismissed Mr Cronk’s appeal.
The Original Patent Office DecisionIn my earlier article I criticised the Patent Office decision. While I did not necessarily disagree with the final outcome, I questioned whether it was actually supported by the available evidence. Neither side, it seemed to me, had a particularly strong case. But Mr Cronk at least had statements from two people who actually work in the industry (hydroponics) in which the invention (a lighting assembly) is used. The Patent Office, on the other hand, relied upon inference and supposition based upon a number of earlier patent documents showing features similar to a key element of the claimed invention.
On balance I thought that, rightly or wrongly, Mr Cronk should have succeeded in the Patent Office hearing. While the claimed invention did not appear to provide a particularly significant step forward, actual evidence from persons working in the industry should have trumped the inferences drawn by the examiner and the hearing officer based upon their own view of the prior art.
(As an aside, I also noted that the examiner and the hearing officer appeared to have applied the wrong version of the law and that, had they applied the correct version, then the case for lack of inventive step would have been stronger. This issue does not seem to have been raised by either side in the appeal and, given that the outcome would have been the same, is no longer of any consequence.)
A Patent Office Without Evidence…Had the Federal Court appeal proceeded on the basis of the same materials that were before the Patent Office, I have little doubt that Mr Cronk would have prevailed. As the court stated at first instance in Emperor Sports Pty Ltd v Commissioner of Patents  FCA 996 (upheld on appeal in  FCAFC 26), at :
Whether the information in the Cited Documents:
(a) formed part of the common general knowledge of [the skilled person] in the patent area before [the priority date]; orcannot be known in the absence of evidence. Without evidence, resolution of these issues is a matter of mere speculation.
(b) is information which such a person, confronted with the problem identified in the complete specification, could, before that date, be reasonably expected to have ascertained, understood and regarded as relevant,
The Emperor Sports case represents a low water mark in the evaluation of inventive step in Australia, where an absence of evidence resulted in patent claims that most observers regarded as manifestly obvious being upheld by a single judge of the Federal Court, and then again on appeal to a full bench of three judges of the court. This decision alone would have been enough impetus for reform of the Australian law of inventive step (see my 2011 article Patent Reform Exposed, Part I – Raising the Inventive Step).
Clearly the Patent Office would not have wanted to see a repeat of Emperor Sports!
Viewing the Matter Through Fresh EyesThe Federal Court reviews decisions of the Patent Office on appeal ‘de novo’, i.e. the court starts again from scratch, bringing ‘fresh eyes’ to the matter and without deference to the Patent Office proceedings or decision. One consequence of this is that new, or different, evidence may be introduced on appeal.
The Patent Office engaged an expert witness, Mr Stephen James Furzey. The court described Mr Furzey (at ) as having:
…wide experience in the lighting industry, as an industry participant, as a teacher and from sitting on relevant standards and advisory committees. He was a relevant skilled addressee in the field of the Application, giving evidence about the lighting industry in Australia as at the priority date.
In additional to his own knowledge and experience, Mr Furzey provided examples and illustrations of product catalogues and other materials from his own collection, which were available before the priority date of Mr Cronk’s claims. The court found Mr Furzey to be an experienced and credible witness, whose evidence was significantly stronger and more relevant than that of Mr Cronk’s witnesses.
Mr Furzey’s evidence established that the supposedly inventive features of the lighting assemblies claimed in the patent application were well-known in the lighting industry before the priority date of the claims, and that employing them would have been merely a matter of routine, and thus obvious in the relevant sense (at -).
Conclusion – Applicants On Notice!In the case of Mr Cronk’s application, the Australian Patent Office has demonstrated that it has learned the lesson of Emperor Sports, and is willing and able to do what is necessary to defend an appeal against the rejection of a patent application on grounds of lack of inventive step.
In the past, many in the patent profession would have found this scenario inconceivable, and would have operated on the assumption that overcoming an obviousness rejection was largely a matter of persistence. However, it seems that the Patent Office can now be expected to stand by such rejections at the level of an internal hearing, and also put on a strong defence in the case of a Federal Court appeal – including by engaging expert witnesses if appropriate.
Applicants will therefore need to consider carefully the strength of their case, and the value of obtaining granted patent rights, before committing to the expense of an appeal. It is worth noting that the court dismissed Mr Cronk’s appeal with costs, as is usual under the Australian system. This means that Mr Cronk is not only out of pocket for his own costs of running the appeal, but is also liable for the Patent Office’s reasonable costs of the court proceedings, including the cost of engaging its expert witness.
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