British American Tobacco (Investments) Ltd v Philips Morris Ltd [1999] FCA 1718

FEDERAL COURT OF AUSTRALIA British American Tobacco (Investments) Ltd v Philip Morris Ltd [1999] FCA 1718

BRITISH AMERICAN TOBACCO (INVESTMENTS) LIMITED v

PHILIP MORRIS LIMITED

NG 822 of 1994

LEHANE J

2 DECEMBER 1999

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 822 of 1994

BETWEEN: BRITISH AMERICAN TOBACCO (INVESTMENTS) LIMITED

Applicant

AND: PHILIP MORRIS LIMITED

Respondent

PHILIP MORRIS LIMITED

Cross–Applicant

BRITISH AMERICAN TOBACCO (INVESTMENTS) LIMITED

Cross–Respondent

JUDGE: LEHANE J

DATE OF ORDER: 2 DECEMBER 1999

WHERE MADE: SYDNEY

THE COURT: 1. Declines to order that pars 2(ii), 2(iii) and 2(vii) of the respondent's Amended Grounds and Particulars of Invalidity dated 22 September 1999 be struck out.

2. Orders that pars 2(iv), 2(v), 2(vi) and 3(v) of the respondent's Amended Grounds and Particulars of Invalidity dated 22 September 1999 be struck out.

3. Orders that par 3(vi) of the respondent's Amended Grounds and Particulars of Invalidity dated 22 September 1999 be amended so as to refer to pars 3(i) to (iv).

4. Orders that the costs of the applicant's motion be reserved.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 822 of 1994

BETWEEN: BRITISH AMERICAN TOBACCO (INVESTMENTS) LIMITED

Applicant

AND: PHILIP MORRIS LIMITED

Respondent

PHILIP MORRIS LIMITED

Cross–Applicant

BRITISH AMERICAN TOBACCO (INVESTMENTS) LIMITED

Cross–Respondent

JUDGE: LEHANE J

DATE: 2 DECEMBER 1999

PLACE: SYDNEY

EX TEMPORE REASONS FOR JUDGMENT 1 The motion before me is one by which the applicant seeks orders striking out certain amended particulars filed by the respondent in accordance with leave which I gave when dealing with an earlier motion on 1 September. The particulars concerned relate to the grounds of lack of inventive step and no "manner of manufacture". It is unnecessary to say anything about the nature of the proceedings or the circumstances in which the questions arise; they are adequately dealt with in numerous earlier judgments in this proceeding. 2 The particulars as to lack of inventive step or obviousness fall into a number of categories. The first is a group of particulars as to the basis on which the respondent says that the so‑called Ten Cent cigarette forms part of common general knowledge in Australia. There can, I think, be no possible doubt that if the respondent could prove not only, as I understand it will seek to prove, that the Ten Cent cigarette had characteristics of cigarettes manufactured in accordance with the claims of the patent, but also that the Ten Cent cigarette formed part of a common general knowledge in Australia on or before the priority date, that latter fact would be relevant to, and possibly, if the former fact were established, conclusive of, the question of obviousness. 3 The basis on which the applicant seeks to have that group of particulars struck out is that the applicant which, in accordance with earlier directions, has filed its evidence has filed none to the effect that the Ten Cent cigarette formed part of the common general knowledge in Australia. That in itself is not a proposition which the respondent disputes; but the respondent does say that it will seek at trial to establish that the Ten Cent cigarette was part of the common general knowledge in Australia by a series of inferences from other evidence, spelt out in part in the amended particulars, and possibly by such adventitious supplementation as may emerge in the course of cross‑examination. 4 In the course of argument I put both to Mr Kerr for the applicant and to Mr Garnsey for the respondent the proposition that it may make very little difference whether the particulars concerned are struck out or not; and I do not think much emerged to dislodge my tentative view that, if it would make any difference at all, the difference would be slight indeed. Mr Garnsey sought to support the particulars principally on the footing that at least they informed the applicant, if they did no more, of a line of argument which on the question of obviousness the respondent would seek to pursue at trial. 5 I am inclined to think that I should not strike out the particulars concerned (par 2(ii) and par 2(iii) of the amended grounds and particulars of invalidity). I have indicated in the course of argument that I would not regard the presence of those particulars as justifying, for example, the administration of interrogatories (some having been foreshadowed) which would not be justifiable in their absence. That is no doubt properly to be taken as a tentative view, in the sense that it is one which might be open to further argument in connection with particular interrogatories. It is, however, a strongly held tentative view. 6 The next paragraph sought to be struck out, par 2(iv), seems to me to fall into a rather different category. It relates to the manufacture of the Ten Cent cigarettes in East Africa during a period of slightly more than twenty years between the 1950s and the 1970s. It alleges that at the time of manufacture of the Ten Cent cigarettes their manufacture was obvious to persons skilled in the art in East Africa, in the light of common general knowledge there and that the Court should conclude at trial that, by reason of the inferences (to which I have already referred) which the respondent will ask the Court to draw, the common general knowledge in East Africa at that time was the same as common general knowledge in other places, including in Australia. Therefore, the argument proceeds, the design and manufacture of a cigarette falling within the claims of the patent would have been obvious to persons skilled in the art (in Australia as well as elsewhere) at any time between 1955 and the priority date. It is then said, by way of further particular, that no such design or manufacture occurred due to the absence of any demand in Australia for ultra‑thin cigarettes. 7 The difficulty with these particulars, it seems to me, is that they elide two matters which really ought not be elided. One is the identity of common general knowledge in East Africa and that in Australia; the other is the question whether the method of manufacture of the Ten Cent cigarette was common general knowledge to persons skilled in the art in either place. It seems to me that it would not be legitimate to establish, if one went through this perhaps rather circuitous chain of evidence, that the Ten Cent cigarette and its manner of manufacture were obvious in East Africa at the time it was in fact made and that, by some general evidence, the common general knowledge in East Africa was the same as that in Australia and then, by that route, to seek to establish, or perhaps to ask the Court to draw the inference, that the Ten Cent cigarette was from 1955 common general knowledge in Australia. 8 Either the Ten Cent cigarette was in fact within the common general knowledge in Australia before the priority date or it was not. If the respondent seeks to establish that it was, then it must prove that fact by admissible evidence directly or by inference from admissible evidence. If, on the other hand, the assertion is that, as a more general matter, the way in which a cigarette of the kind represented by the Ten Cent cigarette might be made was part of the common general knowledge in Australia before the priority date, then that, it seems to me, is an entirely different matter which it would be clearly open to the respondent to prove within other particulars it has given and on which particular 2(iv) seems to me to have no bearing. I think that particular should be struck out. 9 The next two particulars deal with matters known to the applicant, the alleged inventor and the assistants of the alleged inventor. The particulars say that the inferences already referred to may be relied upon to show the Ten Cent cigarette was known to that class of people. They proceed to assert that the Ten Cent cigarette was, or may thus have been taken to have been part of the research and experiments undertaken by the applicant and/or the alleged inventor and/or his assistants. 10 Again, it seems to me that there is an impermissible elision involved in those particulars. The elision is between two quite separate matters referred to by Aickin J in a well known passage in his judgment in Wellcome Foundation Limited v VR Laboratories Australia Pty Limited (1981) 148 CLR 262; first at pages 280 and 281 and secondly at pages 284 and 285. The first matter is that the fact that something was known to an inventor may be relevant to establish common general knowledge in the country where the inventor was. The second is that to establish what was known to the inventor may be relevant to the question of inventive step or, perhaps, "scintilla of inventiveness". Aickin J makes it clear, however, that it is important (particularly in relation to Convention patents) to bear in mind that the common general knowledge which is material to the question of obviousness is common general knowledge in Australia. For that reason, I do not think that anything said in Wellcome Foundation supports the proposition that if the inventor in England knew of the Ten Cent cigarette, that is relevant to the question whether the Ten Cent cigarette formed part of common general knowledge in Australia. 11 Secondly, it seems to me clear that the question of the inventiveness of a particular step can only be judged in the light of the relevant common general knowledge. If what is said to deprive a step of the character of inventiveness is a matter forming part of common general knowledge elsewhere but not in Australia, then it cannot help in answering a question about inventive step raised in Australian proceedings about an Australian patent. 12 For those reasons, I do not think that particulars 2(v) or 2(vi) should stand. 13 Paragraph 2(vii), the final disputed particular on the question of obviousness, relies on the manufacture and sale of the Ten Cent cigarette, and its cessation, in Africa to demonstrate the absence of any long felt need for the claimed invention. This almost certainly is a matter far from the centre of this case. I am inclined, however, to let that particular stand. 14 That brings me to the particulars of manner of manufacture. As I have already indicated during the course of argument, I think the particulars inserted by amendment, in relation to manner of manufacture, should not be allowed to stand. The particular concerned is par 3(v) and it is as follows: "By reason of the manufacture and sale of the 10 cent cigarette, referred to in paragraph 2(ii) hereof, and the matter set out in paragraph 2(iii) hereof, the 10 cent cigarette was 1) published in East Africa on or before the priority date and or 2) known and or published in Australia on or before the priority date." 15 It is accepted that the Ten Cent cigarette is not available to the respondent as an anticipation in relation to the ground of novelty. In an earlier judgment I struck out a particular relating to the Ten Cent cigarette under the ground of novelty and no attempt has been made to reagitate that matter. Accordingly, what the present particular seeks to do is to foreshadow a case that the ground that the claimed invention is not a manner of manufacture within the meaning of s 6 of the Statue of Monopolies may be made out by referring to publications outside Australia and to matters known or published in Australia which neither amounted to an anticipation nor formed part of common general knowledge in Australia. 16 This proceeding arises under the Patents Act 1952 (Cth). Whatever may be the position under the current legislation, the decision of the High Court in Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Ltd (1998) 194 CLR 171 makes it clear, it seems to me, beyond argument, that in relation to a 1952 Act patent a claim that an invention is not a manner of manufacture does not fail any threshold test of newness or inventiveness on the basis of a prior publication not amounting, for novelty purposes, to an anticipation, or knowledge not forming part of common general knowledge in Australia. 17 Accordingly, I think subpar (v) of par 3 should be struck out. Subparagraph (vi) of par 3 is simply a summary if, as I said earlier, in its terms a somewhat provocative one and may, I think, stand, amended so as to refer to pars 3(i) to (iv) rather than 3(i) to (v). In all the circumstances, it is appropriate to reserve the costs of the motion. I so order. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lehane.