SNF (Australia) Pty Ltd v CIBA Specialty Chemicals Water Treatment Limited [2013] HCATrans 54

In an earlier briefing, we reported that SNF had filed a special leave application in the High Court of Australia in a last-ditch attempt to have Ciba's innovation patents relating to treatment of mine tailings revoked. The special leave application was refused following a hearing held on 15 March 2013 in Melbourne. In refusing to grant special leave to SNF to appeal the Full Federal Court's decision, the High Court rejected SNF's argument that the judges of the lower courts had incorrectly applied the legal principles relevant to claim interpretation and innovative step.

It is particularly noteworthy that the High Court did not accept SNF's submissions that the innovative step test applied previously by the Federal Court – namely, that any difference between the claimed invention and the prior art simply needs to affect the way that the invention works, rather than providing any particular benefit or advance - was not the correct test.

SNF has no further avenues of appeal, so it appears that Ciba's innovation patents are here to stay.

Does innovative step include negative or neutral effects?

The statutory test for innovative step requires that any difference between a claimed invention and the prior art make "a substantial contribution to the working of the invention". The Full Federal Court has previously interpreted the test as essentially requiring that there be a functional difference between the invention as claimed and the prior art. Any such difference, the Court has previously held, need not constitute an advance in the art.

SNF's argument was that the variation between Ciba's claims and previously known tailings treatment processes in fact resulted in a negative, or at best neutral, effect on the known processes. They argued that this could not be a "substantial contribution" for the purposes of innovative step, since a process which worked worse than known processes, or even just as well, could not possibly be an "innovation".

The High Court rejected this argument. Referring to the lower courts' findings that certain differences in Ciba's claimed process had “an important effect” on the process, Chief Justice French commented when handing down the High Court's decision on the special leave application that this was "a statement of an evaluative kind which, taken in context, did not disclose an approach … which was inconsistent with the statutory test."

Was expert evidence in relation to claim construction properly handled by the Federal Court?

SNF submitted that evidence provided by an expert witness had been given undue weight, because the witness was genuinely an expert in the field, rather than a person of ordinary skill in the relevant art. They also submitted that the expert's interpretation of "improved rigidification" was at odds with evidence provided by other experts, and should not have been relied upon by the Federal Court.

The High Court rejected SNF's submissions that the Federal Court (whether at first instance or on appeal) had made an error of legal principle in relation to claim interpretation.

Lessons for innovation patent applicants

Given that the High Court has refused the special leave application, the innovative step test previously applied by the Federal Court will stand. That is, so long as your invention works in a different way than previously known devices or methods – regardless of whether the difference is a beneficial one – it may be patentable.