Australia: "Fair Basis": More Basic Than Fair?

Last Updated: 1 December 2004

By Deborah Polites, Senior Associate, and Wayne Condon, Partner (Melbourne)

Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2004] HCA 58 (18 November 2004)

The Australian High Court has reconsidered the test for determining when patent claims are "fairly based" upon the body of the specification, as required by section 40(3) of the Patents Act 1990. The Court's conclusions make it clear that the circumstances in which a patent will be invalid for want of "fair basis" are limited.

Lockwood was the owner of a patent relating to key controlled latches. The alleged inventive step was a means of automatically releasing the inner latch, when a person entered using the key on the outside. This overcame the problem that when a person enters and fails to deactivate the latch from inside, he or she may become locked inside (for example, if the key is lost or left outside). The relevant claim had six features including "a lock release means which is responsive to operation of the second actuator to render the locking means inactive". A consistory clause in the specification used exactly the same wording.

Doric challenged the patent on a number of grounds, however lack of fair basis was the only issue remaining for determination by the High Court. Doric argued that the claim was too broad in that it claimed all means of releasing the lock, whereas the specification described only one means of doing so (which Doric said was to be found in the drawings in the specification). Lockwood argued that the invention was described in the consistory clause of the specification, and therefore the claim was not broader because the wording was the same.

The trial judge and the full Federal Court had held that the claim was not fairly based on the specification. However, the High Court accepted Lockwood's argument that the invention was described in the consistory clause, and therefore found that the claim was fairly based.

The High Court held that the relevant comparison in determining whether claims are fairly based upon the body of the specification is a comparison between the claims and the description of the invention in the body of the specification. It is not a comparison between the claims and the alleged "inventive step" or between the claim and the "technical contribution to the art". The High Court considered that the courts below had, to varying degrees, made the wrong comparison. The High Court also held that the words "fairly based" do not carry with them a requirement for abstract "fairness" but simply refer to a proper comparison between the words of the claim and the specification.

Therefore, the question of whether claims are fairly based on the specification is not to involve any objective assessment of the purported description in the specification. This contrasts with the grounds of "invention" under section 18, manner of manufacture, inventive step, and sufficiency under section 40(2)(a). The only real question for the Court will become where in the specification that "description" appears.

The Court's interpretation reaffirms that the scope for revocation of patents based on section 40(3) is narrow. Doric submitted that "it would be absurd if the s. 40(3) test of fair basing could be satisfied by a "mechanistic" investigation of whether the specification contained language which did no more than match the key integer of the claim." The result would be that carefully drafted consistory clauses would inevitably prevent any challenge on the grounds of want of fair basis. The Court's approach may, in truth, come close to this position, although it rejected that outcome, stating that the consistory clause will only be effective if it in fact describes the invention disclosed. The Court said:

"The inquiry is into what the body of the specification read as a whole discloses as the invention. An assertion by the inventor in a consistory clause of that of which the invention consists does not compel the conclusion by the court that the claims are fairly based nor is the assertion determinative of the identity of the invention. The consistory clause is to be considered by the court with the rest of the specification."

It is clear from this statement that there is to be an "inquiry" into what is disclosed in the body of the specification. However, what is the nature of this inquiry to be? It appears to relate to the "identity of the invention". The High Court cited with approval a passage from the Atlantis case, which suggests that the question is as to what the invention "truly" is. Accordingly, although the Court implicitly criticised the use of the word "truly" by the trial judge, it appears that the concept of what the invention "truly" is must be a part of the test, to avoid the consequence that a consistory clause will necessarily restate the central claim or claims.

If the inquiry in fact relates to what is the "true" invention disclosed in the specification, some degree of value judgement about the description of the invention must surely be inevitable. Evaluation of the substance of the invention is said to be the exclusive realm of obviousness and "threshold inventiveness" enquiries. However, if asking whether a consistory clause describes the "true" invention, it is surely relevant if, for example, what was purportedly disclosed in the consistory clause did not answer the description of an "invention".

The challenge will therefore be in identifying where in the specification the "true" description of the invention lies, without recourse to impermissible assessments of its merit. There is some suggestion in the High Court's judgment that the matters raised by Doric might have formed the basis for a successful challenge in relation to other grounds of invalidity, in particular, the ground of insufficiency of description. The matter has been remitted to the Full Federal Court of Australia for further hearing, and so there may be further determinations on those grounds.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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