29 May 2016

Utility Futility? Usefulness of Inventions and ‘Fatal’ Promises Made in Patent Specifications

InutilityThe Australian Patents Act 1990 requires, in section 18(1)(c) and 18(1A)(c), that an invention must be ‘useful’ in order to be patentable.  This is also commonly known as the requirement for ‘utility’.  Failure to meet this requirement, i.e. inutility, is therefore a ground upon which a patent application may be rejected, or a patent revoked.

A number of ‘rules’ have been developed by the courts over the years for assessing utility.  These were succinctly summarised by Justice Beach in Streetworx Pty Ltd v Artcraft Urban Group Pty Ltd [2014] FCA 1366 (a decision that was upheld on appeal) in the form of three questions:
  1. What has the patentee promised for the invention as described in the relevant claim?
  2. Is the promise useful?
  3. Has that promise been met?
Furthermore, it has been held that ‘everything that is within the scope of a claim must be useful, otherwise the claim will fail for inutility’ (H Lundbeck A/S v Alphapharm Pty Ltd [2009] FCAFC 70 at [81]).

One aspect of the utility requirement that has perhaps been less consistently addressed is whether, if a patent applicant makes multiple promises for an invention, it is necessary that all of those promises be met by every claim.  For example, suppose a patent is directed to bionic implants promises to create a human cyborg that is better, stronger and faster than the original.  Is a claim for a bionic eye invalid because it only achieves one of these three objectives?

In practice, it is not uncommon for patent specifications – particularly those drafted primarily with the US in mind – to include multiple ‘object’ statements, without a necessary expectation that each and every claim satisfies each and every stated object.  It is a common practice of Australian patent attorneys to amend such statements in order to moderate the promises being made such that, for example, no more than some substantive progress towards achieving at least one of the desired benefits is asserted.

It should, in fact, be the standard practice of all Australian patent attorneys to do this, as a recent Federal Court judgment demonstrates.  In Ronneby Road Pty Ltd v ESCO Corporation [2016] FCA 588, Justice Jessup found all claims of an opposed patent application to be invalid for lack of utility because none would deliver each and every one of six advantages listed in the specification, notwithstanding that a number of the claims would deliver one or more of those stated advantages.


Ronneby Road Pty Ltd (‘RR’) had opposed the grant of a patent on an application owned by ESCO Corporation (‘ESCO’).  A delegate of the Commissioner of Patents, in a decision issued on 5 February 2015, found that the opposition failed on all asserted grounds: Ronneby Road Pty Ltd v ESCO Corporation [2015] APO 3.  There were two other opponents, however only one (not RR) raised inutility as a ground of opposition, and none made substantive submissions on the point.

RR appealed to the Federal Court, asserting grounds of lack of novelty and/or fair basis in relation to certain claims, and inutility.  The novelty case was partially successful (although, significantly, claim 2 survived), while the fair basis attack was wholly unsuccessful.  However, RR had better luck with its inutility case.

Patent Claims for Improved ‘Wear Members’

The ESCO patent application is directed to ‘wear members’ which can be attached to excavating equipment for the purposes of protection.  The concept is pretty straightforward, and such things are self-evidently ‘useful’ in the ordinary sense of the word.  As the patent specification explains:

Wear parts are commonly attached to excavating equipment, such as excavating buckets or cutterheads, to protect the equipment from wear and to enhance the digging operation. The wear parts may include excavating teeth, shrouds, etc. Such wear parts typically include a base, a wear member, and a lock to releasably hold the wear member to the base.

The specification goes on to describe the ‘promise’ of the invention as follows:

The present invention pertains to an improved wear assembly for securing wear members to excavating equipment for enhanced stability, strength, durability, penetration, safety, and ease of replacement.

There are, it will be noted, six advantages asserted here.

According to expert evidence provided to the court, none of the claims delivers on all six advantages, although every claim provides at least two of them.

Must ESCO’s Claimed Wear Members Have Sixfold Utility?

As I have already said, the judicial authorities are not consistent on whether an invention, as defined in any particular patent claim, must deliver on every promise made in the specification.  It seems that RR and ESCO – despite holding opposing views on the matter in this case – agree, because apparently they left the court ‘with the impression that the decided cases were unhelpful in resolving the problem of how a promise which was textually composite would feed into the court’s consideration of the utility of a claim which did not deliver on each and every one of the advantages contained in it’ (at [73]).

Never fear, however, because the judge (or, more likely, the judge’s associate) conducted some research on the question, and uncovered a 1995 decision of the New South Wales Supreme Court, Pracdes Pty Ltd v Stanilite Electronics Pty Ltd (1995) 35 IPR 259, which the court considered (at [76]) to be ‘most directly in line with the present case’.  Unfortunately I have not been able to find a freely-available copy of this decision – AustLII’s collection of NSW Supreme Court judgments peters out in early 1995 – however the passage cited by Jessup J (at [76]) is:

The promised result here (there being no suggestion that four of the six promised results are not obtained by the invention) is that the disadvantage in the prior circuitry using an inductive ballast alone of “heat generated in the ballast” would be “largely avoided”. There was a considerable body of evidence adduced on the question of heat generation and power loss and the question whether or not the promise made was fulfilled. If it were not then there was a partial failure of the consideration given for the patent and the claim for revocation would succeed.

A state Supreme Court is an unusual venue for a patent dispute in Australia.  The Patents Act being federal law, proceedings are almost universally commenced in the Federal Court.  Nonetheless, Jessup J apparently regards the NSW Supreme Court as ‘quasi-binding’ authority in this case, stating (at [77]):

Pracdes is a directly applicable superior court judgment which I should follow unless persuaded that it was plainly wrong. Where the controversial question arises under federal statutory law, there is the strongest of reasons to adhere to that principle.

The court therefore upheld the utility objection in relation to all of the claims in the patent application.

Patent Specifications Are Not Contracts!

I cannot say I agree with the NSW Supreme Court, or the line of English judgments on which it relied, that a patent claim should fail the utility test due merely to ‘a partial failure of the consideration given for the patent’.  ‘Consideration’ is a concept from contract law which can be described as the ‘price for a promise’.  In English law, at least, the fact that both parties ‘give’ and ‘get’ something is an essential element of what binds them in contract.  To extend this to a supposed ‘promise’ made in a patent specification, however, is, in my view, a stretch.

Certainly, the grant of patent rights has been described as a form of ‘social contract’, in which the patentee receives a limited period of exclusive rights to an invention in exchange for the disclosure provided in the specification.  But a ‘social contract’ is not a legal contract, and a patent specification is not a binding legal document between two contracting parties.  The Patents Act sets out the requirements for a valid patent, and nowhere does it mention ‘consideration’, or otherwise imply that a patent specification should be read according to the strictures of contract law.

On the contrary, the famous words (in a different context) of Lord Diplock in Catnic Components v Hill & Smith Ltd [1982] RPC 183 are plainly apposite: ‘a patent specification is a unilateral statement by the patentee, in words of his own choosing, addressed to those likely to have a practical interest in the subject matter of his invention (i. e. "skilled in the art")...’.  Patentees (even with the assistance of patent attorneys) do not ‘choose’ the words of contract lawyers for this purpose and, as his Lordship went on to say, a patent specification should not be given ‘a purely literal [construction] derived from applying to it the kind of meticulous verbal analysis in which lawyers are too often tempted by their training to indulge.’  Lawyers who become judges, it must be said, are not always immune from this temptation!

I therefore much prefer the position expressed by ‘judicial dicta’ noted by Colin Bodkin, in his text Patent Law in Australia (also quoted by Jessup J at [73]):

... to the effect that there will be utility if one of the promised results is attained. In view of the origins of the utility requirement in the prohibition of inventions that are “mischievous to the state”, it is difficult to see why an invention that in fact provides some benefit should not be regarded as useful, even if [it] does not provide all the benefits that the patent promises.

Conclusion – An Avoidable Exercise in (F)utility?

Regardless of the correctness of the court’s ruling in this case, RR’s victory on the ground of inutility may prove to be short-lived.  While ESCO could apply for leave to appeal, it is more likely that it will simply seek to amend the patent application in order to tone down the ‘promises’ made for the invention.  Not only is this plainly an available option under the Patents Act, it is one that also finds justification in the Pracdes dispute in which, on 30 December 1995, the NSW Supreme Court handed down a subsequent judgment permitting amendment to replace the phrase ‘and thereby largely avoid the above disadvantages’ with ‘and thereby largely avoid most, if not all, of the above disadvantages’ in order to restore the validity of the claims in question: Pracdes Pty Limited v Stanilite Electronics Pty Limited [1995] NSWSC 55.

Additionally, ESCO already has a number of pending divisional applications, any one of which could be amended prior to acceptance to remove the overly-onerous ‘promises’ and secure claims of similar scope to the application opposed by ESCO.

For these reasons, attacks based on inutility for failure to meet all promises made for an invention may be onerous and costly to both parties, but in most cases are ultimately futile.  Ideally, the courts would take a more pragmatic and less verbally ‘meticulous’ approach.  However, until there is suitable binding authority on this point, the onus lies largely with applicants – or, most commonly, their patent attorney advisors – to avoid putting themselves at risk of this kind of attack in the first place!


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