15 October 2017

Australian Patent Law Contains, Includes, and Comprises Dangers for Foreign Applicants

Balancing ActIt is the function of a patent claim to define the scope of the invention protected by the patent.  Infringement occurs when an accused system, article, or process is covered by the particular terminology used in a patent claim.  Many inventions are combinations, e.g. a system, article, or process made up of two or more elements, components, or steps that work together to provide some new and useful function or result.  Claims directed to such inventions must therefore recite the relevant combination.

A generic example of a combination claim is: ‘a widget including element A, element B, and element C.’  In this example, the word ‘including’ is a transitional term signifying that what follows is a list of elements, each of which must be present in a widget that falls within the scope of the claimed invention.

The choice of transitional terms in combination claims can be significant.  To illustrate, if I tell you that my breakfast this morning included coffee and toast, you would probably not assume that this was necessarily the entire content of my breakfast.  My statement would be true if I also had cereal and juice.  Similarly, if I were to add that my coffee contained milk, you might suppose that I could also have added sugar.  On the other hand, if I were to say that my breakfast consisted of coffee and toast, you would naturally understand me to be saying that this is all that I had for breakfast today.

But what if I were to tell you that my breakfast comprised coffee and toast?  If you are a patent attorney, and you know that I am also a patent attorney, then in all likelihood you would understand that I am not excluding the possibility that my breakfast included other elements.  If you are not a patent attorney, then you might think it odd that I would choose an uncommon and potentially confusing word like ‘comprised’, when I could just as easily have been clear and said ‘included’ or ‘consisted of’.

The fact is that in a number of major jurisdictions the transitional term ‘comprises’ (and variations, such as ‘comprising’) is essentially regarded as a ‘term of art’ in patent drafting.  The US Patent and Trade Marks Office Manual of Patent Examining Procedure, Section 2111.03, lists a number of rulings of the US Court of Appeals for the Federal Circuit (CAFC) to the effect that the term ‘comprising’ is ‘inclusive or open-ended and does not exclude additional, unrecited elements or method steps.’  In the 1997 case of Genentech, Inc. v Chiron Corp. 112 F.3d 495 the CAFC expressly stated that: ‘”Comprising” is a term of art used in claim language which means that the named elements are essential, but other elements may be added and still form a construct within the scope of the claim.’  Similarly, the European Patent Office Guidelines for Examination, Part F, Chapter 4, Section 4.21, states that: ‘While in everyday language the word “comprise” may have both the meaning “include”, “contain” or “comprehend” and “consist of”, in drafting patent claims legal certainty normally requires it to be interpreted by the broader meaning “include”, “contain” or “comprehend”.’

Internationally, then, the settled expectation of many practitioners drafting patent specifications and claims is that the words ‘comprises’ and ‘comprising’ can safely be used to indicate that the elements or steps recited in a combination are not intended to be exhaustive.  Thus a claim defining ‘a widget comprising element A, element B, and element C’ will be infringed not only by an unauthorised widget consisting only of elements A, B, and C, but by widgets including these elements along with one or more additional elements that are not essential to the functioning of the claimed invention.

Those international practitioners may therefore be surprised to learn that ‘comprises’, and its variants, enjoy no such presumption of non-exhaustiveness in Australia, as a judge of the Federal Court of Australia recently reminded us in Nichia Corporation v Arrow Electronics Australia Pty Ltd (No 4) [2017] FCA 864.

‘Comprising’ – In Australia, Context is King

Australian courts have long regarded the interpretation of transitional terms such as ‘comprising’ as being contextual, i.e. dependent upon the particular circumstances in each individual case, and the context of the description of the invention as a whole in which the terms are used.  For example, in Welch Perrin & Co Pty Ltd v Worrel [1961] HCA 91 the High Court determined that claims defining ‘a side delivery rake comprising’ various elements were directed to ‘a rake made up of described components’ (at [26], emphasis added).  In reaching this conclusion, the court was influenced by the presence of other claims that used different language to clearly define the invention as only one part of a side delivery hay rake.

In Asahi Kasei Kogyo Kabushiki Kaisha v W R Grace & Co [1991] FCA 530, a single judge of the Federal Court of Australia found that in claims defining a thermoplastic multi-layer packaging film having an inner heat sealing layer characterised in that it ‘comprises a copolymer of ethylene and x to y % by weight…’, the word comprises ‘simply meant “consists of” and would not cover claims in respect of an infinite number of substances which might be added to the specified co-polymer’ (at [48], emphasis added). 

In another case decided by a single judge of the Federal Court, General Clutch Corporation v Sbriggs Pty Ltd [1997] FCA 499, the words ‘spring clutch comprising’ were held to signify ‘a device which possesses the four functional elements to which I referred earlier, and which consists of, is made up of, is composed of, or is constituted by, the integers described in Claim 1, and no more’ (emphasis in original).  The court reached this conclusion after considering various dictionary definitions, and a number of prior decisions (including Welch Perrin and Asahi).  More importantly, however, the court found that, in effect, the accused clutch mechanism worked in a different way from the claimed invention such that removal of what was said to be the additional element would result in something that could no longer be described as a ‘spring clutch’ within the meaning of that term as used in the patent specification.

In Fresenius Medical Care Australia Pty Limited v Gambro Pty Limited [2005] FCAFC 220, on the other hand, a Full Bench of the Federal Court of Australia concluded that, in drafting the claim at issue in that case, ‘”comprise” was not intended to mean and does not mean “consists only of”. The components of the system there described were not meant to be exclusive of other components that might facilitate the use of the system’ (at [64]).  In doing so, the court acknowledged that the meaning of the word ‘comprise’ is context-driven, and noted that the specification (including the drawings) clearly described various additional elements that could optionally be added to the system defined in the claim.

Philips and Nichia – the Meaning of ‘Contains’

Australian courts’ context-based analysis of transitional terms is not limited to the word ‘comprise’.  In N V Philips Gloeilampenfabrieken v Mirabella International Pty Ltd (a decision of a Full Bench of the Federal Court of Australia from which an appeal to the High Court was dismissed) Lockhart J noted (in obiter dicta) that: ‘The word “contains” [in the phrase “contains luminescent material”] is susceptible of more than one meaning.  So far as relevant in this case it may mean “contains” in the sense of “comprises or consists of” or in the sense of “has within it”, though, depending on the context, there is overlap between these concepts.  The dictionaries attribute either meaning to the word’ (at [81]).  In that case, Lockhart J concluded that ‘contains’ meant ‘has within it’, i.e. that the term was non-exhaustive.

This brings us to the Federal Court’s recent decision in Nichia Corporation v Arrow Electronics Australia Pty Ltd (No 4), in which the phrase at issue – ‘contains fluorescent material’ – was almost identical with the phrase considered by Lockhart J in Philips.  Yet, in a different context, an opposite outcome was reached, in that the term ‘contains’ was found to be exhaustive.

Nichia’s invention was essentially a light-emitting diode (LED) device based on a blue LED and a phosphor selected for its properties of absorbing light of a shorter wavelength (i.e. blue light) and re-emitting light over a range of longer wavelengths in the visible spectrum, resulting in white-light emission.  We are all now familiar with white-light LEDs, however such devices were not even possible prior to the invention of practical blue LEDs in the 1990s, for which Nichia employee Shuji Nakamura and his two co-inventors received the Nobel Prize for physics in 2014.  Affordable bright white LEDs are an even more recent development. 

At the priority date of Nichia’s patent, in 1996, there was nothing new in the general concept of combining a blue LED with a phosphor to generate white(ish) light.  What was claimed to be new in the patent was the use of a phosphor containing particular fluorescent materials, in accordance with a general formula allowing for a range of variations, in order to achieve superior results due to reduced deterioration of the phosphor over time.

It was not in dispute that Arrow Electronics had been selling six different white LED products in Australia, each of which employed a phosphor that included a fluorescent material falling within the general formula defined in the Nichia patent, but which also included additional fluorescent materials outside the general formula.  Thus, if the word ‘contains’, as used in Nichia’s patent claims, was non-exhaustive (i.e. allowed the possibility of other fluorescent materials being included) then the Arrow products would infringe.  Otherwise, they would not.

After considering the description of the invention in the specification as a whole, including the advantages that were said to be achieved by using fluorescent materials having the general formula as claimed, the court concluded that the word ‘contains’ must be treated as exhaustive, i.e. precluding the possibility of including additional fluorescent materials.  Specifically, the judgment states (at [90]) that:

In context, “contains” … can only be a reference to the defined fluorescent material as the phosphor of the claimed device, not some combination involving, for example, other fluorescent materials about which the specification says nothing and about which it can make no promises as to their characteristics when used in a light emitting device containing the nitride compound semiconductor as the light emitting component.

The court was seemingly influenced by the fact that the general formula set out in the Nichia patent already allows for considerable variation in the composition and characteristics of the fluorescent materials making up the phosphor, noting (at [108]) that ‘[t]he present case is an instance where full force is to be given to the principle that matter that is not claimed is disclaimed’ and (at [109]) that the claim:

…is of a scope that provides for a choice in the composition of the fluorescent material whilst adhering to the general formula. In other words, the general formula permits adjustments and substitutions to be made. Thus, the invention can be practised in a way that allows the user, by permitted adjustments and substitutions, to control the wavelength of the emitted light of the device, whilst at the same time attaining the desirable attributes that are promised in the specification for this particular embodiment.

Nichia has appealed the decision to a Full Bench of the Federal Court (NSD1638/2017).  It may obtain a different outcome on appeal but, if so, that outcome will also depend upon a context-based interpretation of the word ‘contains’ in the context of the particular patent claims, and not upon any presumed exhaustive or non-exhaustive meaning inherent to the word itself.

Conclusion – Swings and Roundabouts?

It may be that what the patentee loses on the swings of infringement, it gains on the roundabouts of validity.  Had the court in Nichia accepted that the word ‘contains’ was non-exhaustive, then Arrow Electronics may have been found to infringe Nichia’s claims.  But given the court’s finding that the fluorescent materials were limited to those actually identified in the patent specification, the problem for Nichia would then have been that its claims were substantially broader than the disclosed invention, and thus potentially invalid.  (I note, however, that the court expressly declined, at [444], to consider the question of whether or not the claims would have been ‘fairly based’ under the alternative, non-exhaustive, interpretation of ‘contains’.)

Similar reasoning would apply in other cases in which transitional terms were found to be exhaustive based upon a detailed evaluation of the scope of the invention as described in the patent specification.  In each instance, the court is showing a preference for a construction of the claims that is consistent with the invention that it has identified as being disclosed in the specification, rather than one according to which validity of the claims would be in-question.

This also suggests that efforts to bypass the problem, e.g. by inserting non-exhaustive definitions of transitional terms in the patent specification, or replacing words such as ‘comprises’ and ‘contains’ with ‘includes’, are ultimately futile.  Given the context-driven approach taken by the Australian courts, such amendments either make no difference to the scope of the claims, or they broaden the scope of the claims beyond what is disclosed in the specification.  And while a degree of broadening might have been permissible in some cases under the old ‘fair basis’ test of claim scope, it is certainly not under the ‘support’ requirement imposed by the current Australian patent laws.

Ultimately, the presumption that some foreign applicants and attorneys may have that certain transitional terms, such as ‘comprises’, are inherently non-exhaustive is simply not valid in Australia.  This is a two-edged sword: while it may result in a narrower scope of rights than expected, it will also tend to preserve validity of the patent in cases where a non-exhaustive interpretation would result in an over-broad claim.  And although many Australian patent attorneys have long recommended amending foreign-originating applications in an effort to ensure non-exhaustive interpretation of transitional terms, under current laws this is unlikely to be effective… if it ever was.


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