Patent protection has long been an essential part of business for pharmaceutical and IT companies. This has led to a significant history of high profile patent litigation as patents are used to protect market exclusivity. Companies involved in mechanical products and manufacturing have been slower to take up the business protection provided by patents, but mechanical cases now constitute more that 50% of all patent litigation, showing that it is now a key part of the strategy for protecting market share for these industries.
In Australia, industries such as mining, automotive and medical devices are world leading with substantial innovation in product design and processes. In China manufacturing is a significant part of the overall economy. For companies in these industries patent protection is now part of the product development lifecycle, to protect the investment in research and development and secure market exclusivity for the resulting products.
Mechanical inventions and manufacturing processes however present a unique challenge for patents, as the products and systems involve a complex interrelationship of parts and methods. Rarely is a new invention directed to a single component, and even when it is, it will impact on other components and methods. When applying for patent protection it is common to cover all aspects of the invention in a single application, and divide off claims to different parts of the invention at a later date once commercial success is known. Often the commercially successful aspect of the invention is unexpected and not known until several years after sales commence (once its effect on the operation and longevity of the product is clear).
However, as these industries have only recently seen the full benefit of robust patent protection many companies are yet to employ the rigorous approach to patents that the pharmaceutical companies have employed for decades. It is thus not uncommon for commercially valuable product improvements to be inadequately disclosed in the patent application as filed, forcing patent attorneys to try and retrofit claims to the commercially valuable embodiments to pending patents directed to other aspects of the invention.
This lack of full disclosure often does not come to light until litigation, when a competitor challenges the validity of the patent on the grounds of insufficiency/fair basis. In the past five years there has been a growing body of cases where patents have been successfully challenged on such grounds.
For those companies involved in the design of mechanical products and manufacturing processes it is clear that patents must be part of their business strategy or they risk being left behind. The unique nature of mechanical inventions however means that care must be taken to ensure that all aspects of an invention are sufficiently disclosed. If not, companies may find that claims to the commercially valuable aspects of the invention cannot be sustained.
Ronneby Road Pty Ltd v ESCO Corporation*
This recent case is a good example of the problems that can be experienced by patents for mechanical products, and the growing body of cases in this area. Ronneby Road opposed the grant of a patent to ESCO Corporation directed to ground engaging tools, a component used on heavy digging equipment in the mining industry.
The patent in suit is one of a family directed to a new ground engaging tool that was developed by ESCO which involved the creation of a new geometry of components and a new locking mechanism. The patent families were directed predominantly to the geometry with limited disclosure of the lock mechanism. The lock mechanism was subsequently found to be one of the key commercial features of the product and the claims of the patent in suit were directed exclusively to the lock mechanism.
The case, which is an appeal to the Federal Court from an unsuccessful opposition before the Patent Office, centred on allegations by Ronneby Road that the patent lacked novelty and utility. The lack of utility case is based on an allegation that the claims failed to achieve the stated advantages of the invention, which could only be achieved by the geometry aspects of the invention and not the lock mechanism.
The court held that a number of the claims were invalid on the ground of lack of novelty and all claims were invalid for lack of utility.
This case is an example of how patent protection can be compromised where insufficient attention is given to feature of the invention during the filing process which is subsequently found to be commercially important. This case is currently on appeal to the Full Federal Court, as ESCO tries to salvage some protection for their lock mechanism.
* Federal Court Proceedings No VID 83 of 2015.