Case Review - Delnorth v Dura-Post - Phillips Ormonde & Fitzpatrick | Intellectual Property Law Firm - Patent and Trade Mark Attorneys - Research and Investigation

So what's the difference?

Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd [2008] FCA 1225

7 October 2008

The innovation patent was introduced to the Australian patent system in 2001 as a replacement for the petty patent and since that time over 6000 innovation patents have been sealed. However until August of this year, there had been no significant judicial consideration of the crucial difference between innovation and standard patents, the requirement of an “innovative step”.

Section 7(4) of the Patents Act 1990 provides that an invention is to be taken to involve an innovative step when compared with the prior art base unless the invention would only vary from the prior art base in ways that make no substantial contribution to the working of the invention. The decision of Gyles J in Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd [2008] FCA 1225 provides an interesting and perhaps surprising interpretation of this requirement.

In November 2005, Delnorth filed a divisional application for an innovation patent, claiming priority from a pending standard application. The innovation patent was certified on 2 February 2006 and on 24 February 2006, Delnorth commenced proceedings against Dura-Post for infringement of that patent. Two further divisional innovation patents were filed in April and August of 2006 and infringement of those patents alleged upon certification. Dura-Post cross-claimed, alleging that each of the patent was invalid.

Having found infringement to be established, his honour then considered manner of manufacture and novelty as ground of invalidity, concluding that the patents satisfied both requirements.

Gyles J commenced his consideration of section 7(4) with a concise explanation of the approach to be taken in assessing innovative step, consistent with recent approaches to the question of inventive step, noting that:

There is no need to search for some particular advance in the art to be described as an innovative step which governs the consideration of each claim. The first step is to compare the invention as claimed in each claim with the prior art base and determine the difference or differences. The next step is to look at those differences through the eyes of a person skilled in the relevant art in the light of common general knowledge … and ask whether the invention as claimed only varies from the kinds of information set out in s 7(5) in ways that make no substantial contribution to the working of the invention. It may be that there is a feature of each claim which differs from the prior art base and that could be described as the main difference in each case but that need not be so.

His Honour then considered the background to the introduction of innovation patents, including the High Court decision in Griffin v Isaacs from which the phrase “substantial contribution to the working of the invention” is derived, concluding that

The focus is upon working of the invention (as claimed) not to the degree or kind of variation from the kinds of information set out in s 7(5). In other words, the variation from the kinds of information might be slight but, if a substantial contribution is made to the working of the invention, then there is an innovative step.

The judgement then turns to the presence or absence of innovative step in this particular instance, with Gyles J noting at [63] that:

As I have endeavoured to explain, the question is not whether flexible sheet steel is better than flexible PVC – it is certainly different. It cannot be seriously argued that the material sheet spring steel does not make a substantial contribution to the working of the roadside post claimed in each claim

And again at [78]:

The different material contributes substantially to the manner in which that invention as claimed performs. As I have said earlier, it is not a question as to whether these claims are better than the disclosure by Kennedy, or whether it was obvious to move from Kennedy to this invention. Therefore, there is an innovative step over Kennedy.

Accordingly, the test applied by Gyles J appears to be:

Whether the feature which varies from the prior art, in and of itself makes a substantial contribution to the working of the invention, in this case whether the use of flexible steel contributed to the working of the flexible post;

NOT

Whether the nature of the variation, i.e. the extent to which that feature differs from the prior art, makes a substantial contribution to the working of the invention, in this case whether the difference between PVC and flexible steel makes a contribution.

The judgement also implicitly confirms that all prior art information may be relied upon in assessing innovative step provided it is publicly available, in contrast with inventive step where that information must satisfy the requirement of section 7(3).

Ultimately, while certain claims of the second and third innovation patents where held invalid, Dura-Post was found to have infringed valid claims. This case clearly illustrates how the filing of a divisional innovation patent can be a very effective litigation tool. Not only can the claims of the innovation patent be drafted with the potentially infringing product in mind, but the task of the infringer in seeking to revoke the patent is made more difficult, particular in light of this decision.

Adrian Crooks is an associate of the firm, practising principally in Phillips Ormonde & Fitzpatrick Lawyers’ litigation practice.

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