The High Court's decision in Lockwood Security Products Pty Ltd v Doric Products Pty Ltd  HCA 58 on 18 November 2004 provides some long sought clarity regarding the law of fair basis (a requirement under section 40(3)) of the Patents Act 1990 (Cth) (Act).
However, the decision also comes with a 'sting in the tail', highlighting the importance of sufficient description of an invention, which is a requirement under section 40(2) of the Act.
The appellant (Lockwood) was the proprietor of Australian Letters Patent No 702,534 (Patent) which related to key controlled latches. Claim 1 of the patent related to a latch assembly having the following features:
- a casing
- a latch bolt mounted on the casing so as to be movable relative thereto between an extended latching position and a retracted release position
- a first actuator operable from an inner side of the assembly to cause movement of the latch bolt to said release position
- locking means operable from said inner side of the assembly to adopt an active condition and thereby render said first actuator inoperable
- second actuator operable from an outer side of the assembly to cause movement of the latch bolt to the release position, and
- lock release means which is responsive to said operation of the second actuator so as to thereby render said locking means inactive.
It was common ground that features 1–5 in claim 1 were all features of the prior art and that the introduction of feature 6 was the key inventive concept in the Lockwood patent.
The lock release means addressed the deficiencies of two types of prior art locks. A first type of prior art lock incorporated features 1–3 and 5, which permitted any person (including an unauthorised person who had gained entry via a window) to unlock the latch from the inside, simply by turning the handle.
A second type of prior art lock introduced feature 4 to address this deficiency, through the introduction of an additional key operated lock on the inside. However, this created a situation where an occupant could become trapped inside the premises until the key could be located.
The introduction of feature 6 meant that once a key was used to disengage the lock from the outside, the internal lock was also disengaged. However, an unauthorised person would still be prevented from unlocking the lock from the inside.
In relation to feature 6, the specification included the following paragraph:
'It is a feature of assembly 1 that it includes lock release means 17 which responds to operation of the lock 10 so as to automatically deactivate the locking means 13. The release means may take any suitable form, and one particular form will be hereinafter described.' [emphasis added]
One embodiment of 'lock release means' was then described.
The respondent (Doric) manufactured and sold several key-controlled latches which the appellant claimed infringed several claims of the patent including claim 1. The proceedings were commenced by Doric seeking relief from unjustified threats of infringement. Lockwood cross-claimed against Doric for infringement. Doric then further cross-claimed against Lockwood seeking an order for the patent's revocation on grounds of invalidity including lack of novelty, obviousness, insufficiency, lack of utility of certain claims, uncertainty of description in the specification and lack of fair basis.
The trial judge Hely J held,1 among other things, that all claims, other than the claim that described the stated preferred embodiment of lock release means (claim 33), were invalid as they were not fairly based on the matter described in the specification. Claim 33 had not been alleged to be infringed.
Section 40(3) of the Act provides:
'The claim or claims must be … fairly based on the matter described in the specification.'
First instance: Trial Judge
Hely J stated the test for compliance with section 40(3) (at 346) as follows:
'Whether a claim is fairly based on the matter disclosed in the specification depends on whether there is a 'real and reasonably clear disclosure' of the matter claimed…If the claim as expressed 'travels beyond' the matter disclosed in the specification, then s40(3) is not satisfied ...'.
Citing Olin Corp v Super Cartridge Co Pty Ltd  180 CLR 236 at 273, Hely J went on to say (at 347) that:
'the monopoly must be restricted to the disclosure'
He considered as 'too narrow an approach' Lockwood's submission that, as the words of the specification matched the words of the claim, the claims were necessarily "fairly based" on the specification. Hely J relied on Atlantis Corp Pty Ltd v Schindler  39 IPR 29 where the claims were couched using the same terms as the specification but, noted that:
'... the court [in Atlantis] did not allow that coincidence of language 'to disguise the fact' that the invention disclosed in the body of the specification [was truly] one which was subject to limitations as to use.' [The limitation disclosed in the specification did not appear in the claims in Atlantis.]
Hely J therefore held that, because the specification did not contain a real and reasonably clear disclosure of matters broader than the preferred embodiment, the claims, other than the claim to the preferred embodiment, were not fairly based on the specification.
On appeal: Full Federal Court
Lockwood appealed to the Full Court pressing grounds of appeal only in relation to the findings of lack of fair basis and that a number of claims had not been infringed2. (Doric submitted two grounds by way of notice of contention, namely obviousness and lack of sufficiency, each of which Doric asserted supported the findings of the trial judge).
The Full Court (Wilcox, Branson and Merkel JJ) unanimously dismissed the appeal by upholding the conclusion of the trial judge in relation to fair basis only. Although argument was put to the Full Court on the other live issues, the Full Court considered that its finding on fair basis disposed of the appeal and so it declined to make findings in relation to the other issues.
In considering fair basis, Wilcox J focused on the 'inventiveness' of feature 6 described above. He said (at 496):
'... it can hardly be an inventive step simply to say that the solution to the problem of the inside lock not being responsive to an outside actuator is to make it so. That tells the addressee nothing.'
He went on to say (at 496):
'I agree with Hely J that the specification "does not contain a real and reasonably clear disclosure of matters broader than the particular embodiment'…Claim 33 is concerned with that embodiment; it is fairly based on the matter described in the specification. But claims 1 to 32 are not.'
Merkel J cited a number of early English decisions including the case of Mullard Radio Valve Co Ltd v Philco Radio and Television Corp of Great Britain3where Lord MacMillan said (at 932; 346):
'A patentee is granted his monopoly in order to protect the invention which in his specification he has communicated to the public. He is not entitled to claim a monopoly more extensive than is necessary to protect that which he has himself said is his invention.'
And further (at 933; 347):
'It is undoubtedly the case that a claim may be too wide, in the sense that it claims protection for that for which the patentee is not entitled to protection, or that it gives him a wider protection than his discovery entitles him to receive. In the present instance the patentee has claimed a monopoly of all valves with a certain feature of construction although the merit of his invention does not lie in that feature but in the utilisation in a particular and limited way of a valve containing that feature of construction. In so doing he has in my opinion over-reached himself and his claim is wider than the law will support.'
Merkel J went on to say (at ):
'The "merit" of the invention disclosed in the specification, and the "real and reasonably clear" disclosure of the invention, concerns the manner in which an outside actuator can achieve the object of providing a key controlled latch which can be released from the locked position by the outside actuator. But claim 1 does not claim protection for that invention. Rather, it claims protection for a standard latch assembly which has a "lock release means" constituted by "something which causes an operation to occur" from the outer side of the latch assembly, which renders the "locking means inactive". But the invention really disclosed in the specification is the manner in which the lock release means has been achieved.'
He therefore held that, as claim 1 was wide enough to embrace any form of "lock release means" operable by an actuator on the outside of the latch assembly, notwithstanding that that lock release means was not invented by the patentee and so does not use the inventive steps disclosed in the specification, being the stated preferred embodiment, claim 1 travelled beyond the matters disclosed in the specification and were not fairly based. He too dismissed the appeal.
On appeal: High Court Decision
Lockwood were successful in the appeal before the High Court, that appeal turning solely on the issue of fair basis.
The High Court noted that such a broad statement of the invention as was made in the patent in the present case (that 'the release means may take any suitable form') exposed the patent to attack on the grounds of lack of novelty, obviousness, insufficiency of description, lack of clarity, inutility or that the invention did not constitute a manner of manufacture. However, no conclusion on these matters were reached because these grounds had been either rejected or not argued before the primary judge or had been run before the Full Court and not yet decided. Accordingly, only the fair basis issue was presented for decision by the High Court.
In relation to the question of fair basis, Doric submitted that:
'... it would be absurd if the section 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.'
However, the High Court indicated that Doric's arguments tended towards grounds of invalidity other than fair basis, which were not open to Doric on this appeal.
The High Court said:
'In assessing whether the invention claimed by a patentee is fully described or fairly based, it is necessary to take into account, apart from common general knowledge so far as it casts light on questions of construction, only what is said about it in the specification, independently of whether it is a "patentable invention", and, in particular, independently of whether it is a patentable invention on the ground that it is not obvious.'
It is in this way that the Full Court had fallen into error. The Full Court, in considering issues of 'inventive step' and 'inventive merit' had strayed into the bounds of obviousness. The Court said that:
'... the "inventiveness" or "meritoriousness" of, or the technical contribution made by, the specification are issues to be examined if there is an objection under section 18(1)(b) of the Act for want of novelty or absence of an inventive step (ie obviousness). There is no reason to introduce them into the fair basing question.'
The High Court considered that one source of the Full Court's error was its reliance on authorities such as Mullard Radio, which were decided prior even to the first statutory ancestor of section 40(3). These authorities were of limited assistance in fair basis cases. In addition, the High Court considered that post-1977 English cases (when the language of fair basing disappeared from the UK legislation on its being changed to give effect to the European Patent Convention) were also of limited assistance to the section 40(3) question.
The High Court also went on to say, contrary to Doric's submission, that the question of 'fair basis' does not call for a separate inquiry into the 'fairness' of the claims, that is, the question is not whether the monopoly claimed is 'fair'.
The High Court then discussed what it considered to be the proper way to approach fair basis. They noted that the consideration of whether there is a 'real and reasonably clear disclosure' did not limit disclosures to preferred embodiments.
In relation to the passage cited by the primary judge from Atlantis Corporation Pty Ltd v Schindler, the High Court held that this was not fatal to the patentee's position in this case. The principle from that case, properly stated is that:
'A "coincidence of language" between a claim and part of the body of a specification does not establish fair basing if that part of the language of the specification does not reflect the description of the invention in light of the specification as a whole.'
The High Court held that the present case was distinguishable from Atlantis as in the present case the patentee did not rely on a mere coincidence of language but contended that the language used in the specification described the invention.
Therefore, because the invention disclosed in the specification was the combination of the six integers described in claim 1 (including any suitable lock release means) and not simply the preferred embodiment set out in claim 33, claim 1 (and the following claims) were fairly based on the matter disclosed in the specification.
Thus the High Court allowed the appeal and remitted the matter to the Full Court for determination of the remaining issues on the appeal to that Court.
The decision in Lockwood is quite important, because, in its first visitation of fair basis in recent years, the High Court has indicated that fair basis is a relatively narrow ground of invalidity.
The decision makes it clear that in order for a claim to be fairly based on the specification, there must be a 'real and reasonably clear disclosure' in the body of the specification of the claimed invention. This means that a claim will not be fairly based if it extends more broadly than 'the invention' described in the specification.
The High Court has emphasised that the invention is not determined solely by reference to the consistory clause(s), but by reference to the body of the specification as a whole. The High Court has therefore reaffirmed that mere coincidence of language between a claim and part of the body of the specification will not ensure fair basis, particularly when the specification read as a whole indicates the invention is something different.
In assessing whether there has been a 'real and reasonably clear disclosure' in this case, the High Court highlighted the difficulties caused by the approach taken in the lower courts, which combined considerations of other grounds of invalidity with their assessment of fair basis. The High Court in Lockwood emphasised that while sufficiency, clarity and fair basis share a common genus in section 40 of the Act, the approach used for each should be analytically distinct.
Hence, the decision in Lockwood serves as both a useful clarification of the approach used to assess the issue of fair basis as well as of the scope of fair basis as a ground of invalidity for patents.
1. Doric Products Pty Ltd v Lockwood Security Products Pty Ltd (2001) 192 ALR 306; (2001) 53 IPR 270; (2002) AIPC 91-769;  FCA 1877
2. Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2003) 56 IPR 479; (2003) AIPC 91-873
3. (1936) 2 All ER 920; (1936) 53 RPC 232
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