FEDERAL COURT OF AUSTRALIA Johnson v Broken Hill Pty Co Ltd [2000] FCA 1555 PATENTS - appeal from decision refusing patent application – whether an inventive step – unknown and unexpected properties of known materials – appeal allowed – patent granted Patents Act 1990 (Cth) ss 60(4), s 234 Federal Court Rules, O58, r 8 Commissioner of Patents v Microcell Ltd (1959) 102 CLR 232, cited N.V. Philips Gloeilampenfabrieken v Mirabella International Pty Limited (1995) 183 CLR 655, cited National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252, followed RICHARD JOHN JOHNSON, CHRISTOPHER RICHARD JOHNSON, STEPHEN ALEXANDER JOHNSON AND CHERYL NOELEEN JOHNSON v THE BROKENHILL PROPRIETARY COMPANY LIMITED (ACN 004 038 077), ORICA AUSTRALIA PTY LTD (ACN 004 117 828) (FORMERLY ICI AUSTRALIA OPERATION SPTY LTD AND TECHNOLOGICAL RESOURCES PTY LTD (ACN 002 183 557) QG 47 OF 1998 DOWSETT J 16 OCTOBER 2000 BRISBANE IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY QG 47 OF 1998 BETWEEN: RICHARD JOHN JOHNSON FIRST APPLICANT CHRISTOPHER RICHARD JOHNSON SECOND APPLICANT STEPHEN ALEXANDER JOHNSON THIRD APPLICANT CHERYL NOELEEN JOHNSON FOURTH APPLICANT AND: THE BROKEN HILL PROPRIETARY COMPANY LIMITED (ACN 004 038 077) FIRST RESPONDENT orica australia pty ltd (acn 004 117 828) (FORMERLY ICI AUSTRALIA OPERATIONS PTY LTD SECOND RESPONDENT TECHNOLOGICAL RESOURCES PTY LTD (ACN 002 183 557) THIRD RESPONDENT JUDGE: DOWSETT J DATE OF ORDER: 16 OCTOBER 2000 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The appeal be allowed. THE COURT DECLARES THAT: 2. A patent should be granted to the appellants pursuant to application 651839. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY QG 47 OF 1998 BETWEEN: RICHARD JOHN JOHNSON FIRST APPLICANT CHRISTOPHER RICHARD JOHNSON SECOND APPLICANT STEPHEN ALEXANDER JOHNSON THIRD APPLICANT CHERYL NOELEEN JOHNSON FOURTH APPLICANT AND: THE BROKEN HILL PROPRIETARY COMPANY LIMITED (ACN 004 038 077) FIRST RESPONDENT orica australia pty ltd (acn 004 117 828) (FORMERLY ICI AUSTRALIA OPERATIONS PTY LTD SECOND RESPONDENT TECHNOLOGICAL RESOURCES PTY LTD (ACN 002 183 557) THIRD RESPONDENT JUDGE: DOWSETT J DATE: 16 OCTOBER 2000 PLACE: BRISBANE REASONS FOR JUDGMENT 1 This is an appeal brought pursuant to subs 60(4) of the Patents Act 1990 (the "Act") from a decision of a delegate of the Commissioner of Patents refusing the applicant's application for a standard patent. The nature of the application appears sufficiently from the reasons given by the delegate. The appeal was initially opposed, and there was a cross-appeal. However the opposition and the cross-appeal have been withdrawn. The Commissioner has indicated that he does not intend to appear to oppose the appeal. 2 The delegate rejected the application on two grounds: that the application did not disclose an invention within the meaning of s 6 of the Statute of Monopolies; and that the claimed invention was obvious, not involving any inventive step. The application was made prior to the commencement of the Act. The delegate observed the provisions of s 234 in deciding the application. 3 The application concerns the use of sawdust in conjunction with an explosive called ANFO. ANFO is a combination of ammonium nitrate and diesel fuel. It is in common use. It has high detonation pressure, high density and low volume. These qualities make it inappropriate for use in some rock as it tends to produce non-uniform breakage, or in some instances, no breakage. For this reason there was a need to reduce the explosive effect. I do not understand these matters to have been in dispute before the delegate. The claim asserts the discovery that mixing sawdust with ammonium nitrate will remedy this problem. 4 The thrust of the delegate's reasons for rejecting the application was that on some of the evidence before him, sawdust or a similar product, woodmeal, had been previously used in conjunction with dynamite to ensure stability in handling. Dynamite is a quite different explosive from ammonium nitrate and from ANFO. The evidence suggests that woodmeal and sawdust are also not relevantly the same product. It is fair to say that the delegate disposed of the matter upon the basis that, despite these differences, the prior use of sawdust or woodmeal in conjunction with dynamite would have been sufficient to suggest to an appropriate expert in the industry the use of sawdust in conjunction with ANFO to bring about the result claimed. It is for reasons associated with this very narrow factual question that the delegate found that there was no invention within the meaning of the Statute of Monopolies and also no inventive step. 5 On the evidence before him, that view was open. However the evidence before me is to different effect. Order 58 rule 8 of the Federal Court Rules provides that the material which was before the Commissioner is to be received on an appeal only with the leave of the Court. Such material is before me only to the limited extent that counsel for the appellant has tendered it. Other evidence has also been led and is unchallenged. I refer firstly to the affidavit of Mr Scott at par 19. He swears: It is now my understanding that the addition of sawdust to ANFO slows the detonation reaction without substantially reducing the net amount of energy released. The fact that the bulk density of the blend is reduced means that a lesser mass of the explosive is available to work on any given volume of rock. The result is a reduction of the crushing of low strength material close to the blast hole allowing more of the energy generated per unit mass of explosive to be applied to the movement or heave of the blast burden. As far as I am aware, this advantage of blending sawdust with ANFO had not been discussed or trialed by anyone in the explosives industry by 1986. 6 Similar views are expressed by Mr Sen in his affidavit at pars 4, 5, 6 and 7. See also the affidavit of Mr Hagan at pars 16 et seq and ex 5, the statutory declaration of Richard Eugene Danell at pars 5 and 34. It is quite clear from that material that a person knowledgable in the industry as at the relevant date would have formed the view that the use of sawdust was contra-indicated for use in conjunction with ANFO for present purposes. In those circumstances I turn to the specific reasons advanced by the delegate for rejecting the application. 7 An "invention" is "any manner of new manufacture the subject of letters patent and grant of privilege within section 6 of the Statute of Monopolies, and includes an alleged invention." Much learning is attached to that provision of the Statute of Monopolies but for present purposes, I need only address a small number of cases where the effect of its incorporation into Australian patent law has been considered. 8 The delegate relied substantially upon the decision of the High Court in Commissioner of Patents v Microcell Ltd (1959) 102 CLR 232 and in particular, the passage at 251 as follows: We have in truth nothing but a claim for the use of a known material in the manufacture of known articles for the purpose of which its known properties make that material suitable. A claim for nothing more than that cannot be subject matter for a patent, and the position cannot be affected either by the fact that nobody thought of doing the thing before, or by the fact that, when somebody did think of doing it, it was found to be a good thing to do. 9 The delegate also referred to the decision of the High Court in N.V. Philips Gloeilampenfabrieken v Mirabella International Pty Limited (1995) 183 CLR 655 at 667 as follows: … it would border upon the irrational if a process which was in fact but a new use of an old substance could be a 'patentable invention' .... if, but only if, that fact were not disclosed by the specification. 10 I have previously discussed my understanding of those passages in Dyno Nobel Asia Pacific Limited v Orica Australia Pty Ltd (1999) FCA 1369, and I do not pause to reconsider them now. It is sufficient to say that I consider that this case is analogous to that considered by the High Court in National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252. The claim in that case concerned the use of certain chemicals as weed killers where their weed-killing property had not previously been known, although the chemicals themselves were known, as were their other general properties. At p 262 the Court (Dixon CJ, Kitto & Windeyer JJ) said: It is therefore open to the Commissioner in a proper case to direct the deletion of a claim for a process which may be seen from the specification, considered as a whole, to be "outside the whole scope of what is known as invention" because … it is "nothing but a claim for a new use of an old substance". But, as the Microcell Case emphasizes, it must always be remembered how much is wrapped up in the "nothing but". Lord Buckmaster did not use the words without explanation: - "… when once a substance is known," he said, "its methods of production ascertained, its characteristics and its constituents well defined, you cannot patent the use of that for a purpose which was hitherto unknown". And why? Because in the postulated state of knowledge the new purpose is no more than analogous to the purposes for which the utility of the substance is already known, and therefore your suggestion of the new purpose lacks the quality of inventiveness … . Unless invention is found in some new method of using the material or some new adaptation of it so as to serve the new purpose, no valid patent can be granted … . If, however, the new use that is proposed consists in taking advantage of a hitherto unknown or unsuspected property of the material, the situation is not that to which Lord Buckmaster's language refers. In that case there may be invention in the suggestion that the substance may be used to serve the new purpose; and then, provided that a practical method of so using it is disclosed and that the process comes within the concept of patent law ultimately traceable to the use in the Statute of Monopolies of the words "manner of manufacture," all the elements of a patentable invention are present … . 11 At 265 their Honours continued: This is not a claim which can be put aside as a claim for a new use of an old substance, true though it be that the chemicals themselves were known to science before the applicant's investigations began. It is a claim which denies that the chemicals are old substances in the sense in which the expression has been used in such cases … . It treats them as substances which in the relevant sense are new, that is to say as substances which formerly were known only partially and, so far as weed killing potentialities are concerned, were unknown; and its tenor is that by an application of scientific ingenuity, combining knowledge, thought and experimentation, not only in relation to the chemicals but in relation also to the enzyme systems of certain weeds and plants, the applicant has evolved a new and useful method of destroying weeds without harming useful vegetation amongst which they are growing. It is irrelevant, even if true, that once the discovery was made that the chemicals produce a lethal reaction when applied to the weeds and produce no such reaction when applied to the crops there was no more ingenuity required in order to show how the process might be performed. The point that matters is that a weed-killing process is claimed which is distinguished from previously known processes by a feature the suggestion of which for such a process involved a step plainly inventive. 12 These observations answer both criticisms made by the delegate. Sawdust was a well-known substance and its use with dynamite for a quite different purpose was also known. However its use for present purposes was in no sense known. In that sense, the sawdust was not a product known to be appropriate for that purpose, even by analogy. The decision to try it plainly involved an inventive step. It was also an invention for the purposes of the Statute of Monopolies. Although those questions are distinct, for present purposes there is little in the distinction. The point is that on the evidence before me, those informed in the art of the industry had no knowledge that this product could be used in this way. It follows that I should make the following findings of fact: 1. As at 1986 a combination of ammonium nitrate and fuel oil (known as "ANFO") had been used for many years as an explosive in the mining industry in Australia. 2. As at December 1986 that industry was looking for a modified form of ANFO which would detonate less violently for use in soft rock, giving a more controlled explosion. 3. As at December 1986 expanded polystyrene beads and cereals had been used with ANFO in attempts to achieve the desired results, but without success. 4. In 1986 Dr Hagan, on behalf of BHP, had conducted research into ways of achieving such results. A particular problem with using polystyrene beads was that they segregated from the ANFO. Altering the viscosity of the fuel oil had not worked; nor had replacing the polystyrene beads with cereals. 5. As at December 1986 no person skilled in the art in Australia had used, or had thought of mixing sawdust with ANFO to achieve the desired results. 6. As at December 1986 persons skilled in the art in Australia would not have considered (and Dr Hagan as a person skilled in the art did not consider) that it was "worth trying" sawdust with ANFO. 7. The common general knowledge in Australia as at December 1986 with respect to the properties of ANFO and sawdust was such that they were not, and would not have been considered by persons skilled in the art in Australia as, appropriate materials to combine in an explosive composition. 8. The invention as claimed achieves the desired result. 9. That the invention achieves the said result was totally unexpected by those skilled in the art in Australia. 10. The combination of sawdust and ANFO within the ranges claimed works as an explosive composition, utilising hitherto unknown and unexpected properties of the ingredients. 13 In those circumstances I would allow the appeal and declare that there should be a grant of a patent in favour of the appellants pursuant to application 651839. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. Associate: Dated: 17 November 2000 Counsel for the Applicant: Mr A Crowe Solicitor for the Applicant: McCullough Robertson Date of Hearing: 16 October 2000 Date of Judgment: 16 October 2000