Delnorth Pty Ltd v Commissioner of Patents [2013] FCA 165 (6 March 2013)

This decision concerns an appeal to the Federal Court of Australia following re-examination of an Australian standard patent directed to roadside posts (the patent) in the name of Delnorth Pty Ltd (Delnorth) by the Commissioner of patents. Re-examination resulted in a number of claims of the patent being considered to lack an inventive step and being revoked.

Background - Delnorth and Dura-Post

Delnorth operates in the field of highway, traffic and roadside products. Delnorth has previously been involved in other litigation with Dura-Post (Australia) Pty Ltd (Dura-Post) in respect of other related patents which are also directed to roadside posts.

Prior to the re-examination process, grant of the patent was successfully opposed by Dura-Post1, and the Commissioner’s delegate considered that claims 1 to 36 lacked an inventive step. Delnorth appealed the delegate’s decision to the Federal Court but an administrator was appointed to Dura-Post before the matter was heard. The administrator advised the court that he withdrew Dura-Post’s objection to the patent and as Dura-Post bore the onus of proving that the claims would be invalid if granted, the patent proceeded to grant.

Re-examination and the decision of the Commissioner's delegate

Following grant the patent was re-examined on the basis of evidence filed in the opposition proceedings, resulting in a number of claims of the patent being considered by the delegate to lack an inventive step so that they were subsequently revoked. The delegate’s decision is the subject of this appeal.

The delegate considered that certain claims of the patent did not involve an inventive step in light of two prior US patents2 (the Pellowski patents). In reaching this decision, the delegate appreciated that the claims of the patent would only lack an inventive step in light of the Pellowski patents if either document could be considered a piece of information which a person skilled in the art could be “reasonably expected to have ascertained, understood and regarded as relevant”, so as to satisfy section 7(3) of the Patents Act 1990 (the Act).

Lack of evidence that discussed the Pellowski patents

The expert evidence that was filed in the opposition discussed a number of prior art documents and upon consideration of the evidence, the delegate considered that roadside posts have a reasonable level of associated patenting activity and that a person skilled in the art could have been reasonably expected to review patent literature at the priority date of the invention.

Although the evidence suggested that the skilled addressee could be expected to conduct patent searches, there was no evidence that specifically discussed the Pellowski patents and showed that patent searches would have extended to these documents, which were published in the 1960’s and well before the other documents addressed in the evidence.

The decision - the evidence did not support a finding of lack of inventive step of the claims of Delnorth's patent

Justice Nichols found that the evidence did not justify a finding that the Pellowski patents could be considered information which a person skilled in the art could be “reasonably expected to have ascertained, understood and regarded as relevant”, so as to satisfy section 7(3) of the Act and render any of the claims as lacking an inventive step. Accordingly, Justice Nichols set aside the delegate’s decision to revoke claims of the patent.

It was noted by Justice Nichols that a “peculiar” position exists in which claims of the patent which were “in substance, the same” as claims of a related innovation patent which were considered in a separate decision3 to not involve an innovative step. In this regard, Justice Nichols commented that a claim lacking an innovation step “might not be invalid on the basis that it lacked any inventive step”.

In summary, although claims 1 and 2 of the related innovation patent were found to lack an innovative step in light of the Pellowski patents, the evidence failed to show that these same patents were pieces of prior art information that could render the claims of the patent as lacking an inventive step.

Considering Raising the Bar

With the terms "ascertained, understood and regarded as relevant" being removed from the Act under the Intellectual Property Laws Amendment (Raising the Bar) Act 2012, were the same facts considered under the new provisions a different outcome may have been likely.