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Friday, June 3, 2016

Federal Court rules Mum was right: Don't make promises you can't keep

By Natasha Dixon, Law Graduate

A recent Federal Court decision, Ronneby Road Pty Ltd v ESCO Corporation [2016] FCA 588, has ruled that, where a patent specification makes multiple promises for an invention, a patent claim is only valid if all those promises are fulfilled.


In this case, Ronneby Road Pty Ltd (Ronneby) opposed the grant of a patent application owned by ESCO Corporation (ESCO) on the grounds that the application lacked utility, novelty and fair basis. Whilst Ronneby was partially successful in its novelty argument, and entirely unsuccessful in relation to fair basis, it succeeded in establishing that all of the claims in ESCO's application lacked utility.

The invention the subject of ESCO's patent application involved a tooth for securing to a base part on the digging edge of excavating equipment, which would, as promised in the patent specification, provide the advantages of 'enhanced stability, strength, durability, penetration, safety and ease of replacement'.

It is worth noting that the specification of ESCO's application disclosed various aspects of the invention relating to two main characteristics of the wear assembly, namely the design and geometry of the stabilising surfaces along which the wear member is fitted to the base part, and a moveable lock by which the wear member is secured to the base. However, the claims of the application related only to the characteristics of the moveable lock.

Overview of the utility requirement

Under the Patents Act 1990 (Cth), in order for an invention to be patentable, it must have 'utility', and Australian case law has developed number of rules around this requirement. In particular, a ground of inutility may be established by demonstrating that the invention does not produce any useful result, or by showing that the objectives stated or promises made in the specification are not met by the claims.

Various tests have been propounded by the courts in order to assist with determining whether an invention has utility. In Artcraft Urban Group Pty Ltd v Streetworx Pty Ltd [2016] FCAFC 29 for example, the court asked two questions:

  • what is the promise of the invention derived from the whole of the specification?; and 
  • by following the teaching of the specification, does the invention, as claimed in the patent, attain the result promised for it by the patentee? 

The question for the court in Ronneby v ESCO, however, was one that had not been subject to substantial judicial consideration before, and the judicial authorities appeared inconsistent. Namely, where a patent applicant makes more than one promise for an invention, is it necessary that each of the claims meet all of these promises?

An unfulfilled promise 

Justice Jessup found that the specification had promised the advantage of 'enhanced stability, strength, durability, penetration, safety and ease of replacement' in permutation. His view was that whilst all of the claims in ESCO's application delivered on at least one of the advantages promised, none of the claims delivered on all six.

Despite stating that prior cases were unhelpful in solving the problem before his Honour, the court referred to a decision from the Supreme Court of New South Wales and as a result held that there was a partial failure of the consideration given for the patent, which meant that all of the claims were invalid as none of them fulfilled all of the promised advantages.

Although the court did not refer to it in coming to its decision, this case brings to mind the decision in Patent Gesellschaft AG v Saudi Livestock Transport and Trading Co [1996] FCA 175. That case concerned a patent for a ship (a converted tanker vessel) for the carriage of live animals, in which the claims failed to include means for the ventilation of the livestock pens, despite referencing 'ventilation' in the specification. It was thus held that the claims did not achieve the stated purpose of the invention, to facilitate the transportation of livestock, and the patent was found to lack utility.

What's the moral of the story? 

This decision emphasises the danger that object statements pose in a patent application, and is a model example as to why patent applicants and their patent attorneys should err on the side of caution and consider very carefully the wisdom of making promises (in particular, multiple promises) in a patent specification regarding the invention's advantages.

It remains to be seen whether ESCO will apply for leave to appeal the court's decision, or if it will be able to redress the lack of utility through amendment of the patent application.

The case is a salutary reminder for applicants to always listen to a mother's advice, and never make promises they cannot keep!

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