‘It Is Found’ That Implying Experiments Have Been Conducted May Be Fatal to a Patent

A recent decision, in an appeal to a Full Bench of the Federal Court of Australia, provides a cautionary tale about how even the most seemingly innocuous language employed in a patent specification can ultimately bite the patentee on the backside!  (Morellini v Mizzi Family Holdings Pty Ltd [2016] FCAFC 13.)

In this case, the simple phrase ‘it is found…’ was interpreted by the court to imply that systematic experiments had been carried out in order to arrive at the stated findings.  There was, however, no evidence that anyone had ever conducted any relevant experiments.  The court was not swayed by the patentee’s argument that the ‘finding’ in question was ‘readily capable’ of interpretation as the inventor’s own personal experience and conclusions.  In a unanimous decision, the judges determined that the phrase constituted a false suggestion or misrepresentation which materially influenced the decision of the Commissioner of Patents to grant a patent which was, as a result, invalid.

The particular difficulty for the patentee in this case was that the statement at issue was relied upon to establish novelty, and the presence of an inventive step, over the prior art.  Clearly, a point of difference can be sufficient to support the grant of a patent, but only if that difference imparts some material and previously unrecognised advantage that the inventor can claim to have contributed to the art.  If (as the court seems to have concluded here) the inventor has chosen particular parameters, without taking any steps to verify their significance, a representation that there is some unprecedented new finding involved may be material to the decision to grant a patent, at least if the representation is relied upon as basis for a patentable distinction over the prior art.

There are lessons in this decision for all those involved in the preparation and filing of patent specifications, including the attorneys responsible for drafting them, and the clients responsible for reviewing drafts before they are finalised for filing.

Invalidity by False Suggestion or Misrepresentation

I have noted previously that there is no general rule in Australia that statements you make during examination or other Patent Office proceedings can be used against you in subsequent court proceedings.  Unlike in the US, for example, there is no concept of ‘prosecution history disclaimer’ in Australia, and while the courts have flirted with the related doctrine of ‘prosecution history estoppel’ none has yet gone so far as to find that it exists in Australian law.  Applicants for Australian patents also do not have the strong duty of candour that is owed to the US Patent and Trademark Office.

Nonetheless, section 138(3)(d) of the Patents Act 1990 provides that a court may revoke a patent that was ‘obtained by fraud, false suggestion or misrepresentation’.

There is a fairly high bar to establishing ‘fraud’, since it requires a determination of the state of mind of the patentee.  However, false suggestions and misrepresentations can occur without nefarious intent.  The decided cases establish that there are essentially three elements to obtaining a patent by false suggestion or misrepresentation:

1. a relevant suggestion or representation must have been made;
2. it must be a false suggestion or a misrepresentation; and
3. it must have been material to the decision to grant a patent.

A statement that does not rise to the level of a relevant representation is therefore of no consequence, and nor is an actual misrepresentation (however egregious) that plays no part in determining whether or not a patent is granted (i.e. ‘obtained’).  The threshold is not so high, however, that it is necessary to establish that the patent would not have been granted if it were not for the misrepresentation.  Furthermore, in the absence of direct evidence as to whether or not the Commissioner was misled, the court may make inferences based upon the available evidence (see Ranbaxy Australia Pty Ltd v Warner-Lambert Co LLC [2008] FCAFC 82 at [82-3]).

The Patentee’s Misrepresentation

The patent at issue in Morellini relates to a ‘cane billet planter’, i.e. a planting apparatus and a method for planting sugarcane.  (I have previously written about an earlier round of this litigation, in relation to a finding that the patentee had made unjustified threats of patent infringement proceedings: Fighting Unjustified Threats of Infringement Proceedings.)

The relevant aspect of the patentee’s machine is that it forms mounds over the sugar cane billets, and includes ‘a mound profiler which profiles the mound after the cane billets have been covered with soil to form a shaped mound in which each side of the mound is at an incline of between 20° to 60°’.  The significance of this range of angles is explained in the patent specification, which discusses the importance of keeping the soil warm after the billets are planted, and states that:

Typically, the warming effect may be achieved by making the top of the mound relatively flat and each side of the mound inclined at an angle which promotes warming of the soil by the sun. It is found that the mound can be much better kept warm by the sun if each side of the mound is an inclined of between 20-60° and typically about 40°.  (Emphasis added.)

Morellini (who was accused of infringing the patent) argued that the above statement ‘comprises a representation that the soil around the billets in the mound can be much better kept warm by the sun if each side of the mound is inclined between 20° and 60°, and typically about 40°, and a representation that experiments had been undertaken to establish that fact’: Morellini at [83] (emphasis added).

At first instance, the judge had found that the patentee’s statement did not amount to such a representation, i.e. Morellini did not get past the first of the three criteria for revocation set out above.  The Full Court disagreed (at [99]):

The meaning of the Statement is clear:  the mound can be much better kept warm by the sun if each side is inclined between 20° and 60°, and typically at about 40°.  But what is more, the Statement conveys, as Mr Morellini alleged, that this relationship between the stated profile of the mound and the resultant “better warm[ing]” is a fact which has been “found”.  The Statement does not advance this relationship as the inventor’s hypothesis; still less does it advance it as his conjecture.  Rather, the specification advances this relationship as a fact based on a finding that has actually been made.

The Full Court further determined (based on evidence submitted in the original trial) that the statement was false, at least insofar as it implied that any actual experiments had been done which could have led to anything being ‘found’.

Furthermore, the evidence indicated that the patentee had amended its claims to include the angles of incline specifically in order to distinguish the invention from the prior art, and the Full Court was therefore able to infer that the statement regarding the range of angles having been ‘found’ to provide an advantage was material to the Commissioner’s decision to grant a patent.

The Hazards of ‘Stock’ Terminology

Phrases such as ‘it is found’, or ‘it has been found’, are not uncommonly used in patent specification.  Indeed, I count seven occurrences of ‘it is found’, in the context both of the prior art and the invention, in the specification at issue in the Morellini case.  In all likelihood, the expression was not intended to indicate anything more than a belief held by the inventor.

The Full Court’s decision demonstrates, however, that terminology of this kind should be used with great caution.  It is harmless enough when the statements in question have no material bearing on whether or not a patent is granted.  But when the information referred to has having been ‘found’ becomes essential to the validity of the patent claims, such statements may become the subject of far closer scrutiny!

Conclusion – Avoiding the Pitfalls

Could the patentee have done things differently and saved the patent?  Perhaps, although it is far from certain.  As the Full Court notes (at [100]), the relevant time for assessing the truth of a representation is when it was made.  In this case, that was when the original patent specification containing the statement about the angles of incline was filed.  Having said ‘it is found’ when it was not, the patent’s fate was probably sealed.

However, had the original specification stated that it was the inventor’s belief, conjecture, or hypothesis that the stated range of angles would have the stated advantageous effect, there would at least have been no misrepresentation at that time.  The patent claims therefore could not have been invalidated on that basis, under section 138(3)(d).  The problem that the patentee might then have had, instead, would be establishing that such an equivocal statement was sufficient to establish a substantial inventive contribution over the prior art.  It might well have been permissible, in these circumstances, for the patentee to conduct subsequent trials or experiments to test the hypothesis.

In any event, no good can come of making strong assertions of the truth or knowledge of some matter which is, in fact, only conjecture.  This is something definitely to keep in mind when drafting – or reviewing – a patent specification.

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Postscript – Added Complexities

For the benefit of those with a more forensic interest in the Full Court’s decision, I should point out that the facts were a little more convoluted than I have indicated above.  The patent in suit was, in fact, an innovation patent (now expired).  The innovation patent was, itself, a divisional application from a standard patent application that had been opposed by Mr Morellini in 2008.  The amendments to the claims were made in the course of the opposition.  The divisional innovation patent was originally filed with the amended claims, and was examined and certified without objection.

It is thus the court’s inference only that the knowledge of what had transpired in relation to the parent application had any bearing on the Commissioner’s decision to certify the innovation patent.  Furthermore, even assuming it to be true that the misrepresentations were material to the Commissioner’s finding that the claims involved an inventive step, it does not necessarily follow that they were equally material to finding them to meet the lower standard of innovative step.

I actually think that, on the facts, the court reached the right result.  If the stated range of angles of incline was essentially arbitrary, and there was no evidence that it offered any particular advantage over angles outside the range, then there was really no support for the assertion that the selection made a ‘substantial contribution’ to the  working of the planting apparatus, as required to support an innovative step.  It is disappointing, however, that the court reached its conclusion without considering the important distinction in the threshold required for innovative step as compared with inventive step.

Tags: Australia, False suggestion, Validity