Patent infringement defence reaches boiling point at trial

The importance of selecting appropriately skilled expert witnesses for patent infringement cases was highlighted in a recent Federal Court of Australia decision.

On 28 April 2023, Justice Nicholas handed down his decision in Calix Limited v Grenof Pty Ltd & Aquadex Pty Ltd,[1]  following a trial in Sydney that was heard just a month earlier from 27 to 30 March 2023.

Background to the proceeding

The case concerned an Australian patent for a process of producing hydroxide slurries owned by Calix.  It was alleged that Grenof's conduct by manufacturing, supplying, or offering to supply a product known as 'Phodine Plus' infringed claim 1 of Calix's patent.  

Aquadex, a related entity to Grenof, was joined as a party to the proceeding shortly prior to trial, as it manufactures a similar product, known as 'Phodine', using a similar process to Grenof.

Grenof and Aquadex denied that their processes for manufacturing the products infringed claim 1 of the patent and Grenof filed a cross-claim against Calix, alleging that Calix's patent was invalid for lack of novelty, lack of inventive step and pursuant to ss 40(2)(a) and 40(3) of the Patents Act 1990 (Cth) (Act), in that:

1. the patent did not disclose the invention of claim 1 in a manner which was clear enough and complete enough for the invention to be performed by a person skilled in the art; and
2. claim 1 was not supported by the matter disclosed in the patent specification.

Grenof also contended that Calix made unjustified threats of infringement proceedings against Grenof.

Issues before the Court

At the trial (on the issue of liability only), the Court had to consider the construction of claim 1 of Calix's patent and whether or not it was infringed, as well as issues concerning the validity of the patent.  

Grenof argued that its process did not infringe claim 1 of the patent because it lacked two of the essential integers of that claim. In particular, it argued that its process did not include:

1. "applying a shearing force to the reaction mixture using a mixing apparatus"; or
2. "allowing steam to evaporate from the reaction mixture as hydration proceeds, to remove excess heat and control the maximum reaction temperature to near the boiling point".

Calix, on the other hand, argued that these integers were present in Grenof's process.  

A video of the Grenof process taken at a joint inspection during the proceeding (at which the experts were present) was shown to the Court at trial.

Although the parties agreed that "near the boiling point" referred to a temperature below, but not at or above, the boiling point, Calix, through its expert, advanced a number of theories as to why the Grenof process did not actually reach the boiling point, including that 'localised boiling' was occurring within the reaction mixture and that the mixture was 'superheated'.

Grenof argued that Calix's expert was not a person skilled in the art and that his evidence, if admitted, should be given low weight, if any.  Additionally, to the extent that any evidence given by the parties' respective expert witnesses differed, Grenof's expert's evidence should be preferred.

Calix also contended, at trial, that s 121A of the Act (a provision that is rarely considered by the courts) applied to place onus on the respondents to prove that the respondents' products were not made using the patented process.

Findings of the Court

Justice Nicholas generally preferred the evidence of Grenof's expert witness (particularly in any areas where there was a material disagreement between the experts' evidence),[2] finding that claim 1 of Calix's patent had not been infringed because Grenof's process for manufacturing the product fell outside the scope of claim 1. [3] 

The Court regarded the evidence of Calix's expert to be "contradictory and unreliable"[4]  and was also not persuaded that Calix's expert was "… a person with a practical interest in the subject matter of the Patent or that his prior training or experience qualifies him to give relevant evidence as to the common general knowledge or state of the relevant art at the priority date".[5]

Further, his Honour described the patent specification as a "confused and muddled document especially when regard is had to the temperature limitation ("near the boiling point") referred to in claim 1".[6]  Ultimately, Justice Nicholas found that claim 1 was, in any event, invalid for:

1. lack of inventive step (as the invention defined by claim 1 was obvious in light of prior art and the common general knowledge); [7] and
2. non-compliance with s 40(3) of the Act (as the invention as defined by claim 1 was "fundamentally different from the invention disclosed in the body of the specification" and was not supported by matter disclosed in the specification). [8]

His Honour therefore ordered that claim 1 of the patent be revoked.

In relation to s 121A of the Act, his Honour found that the Court would have to be satisfied that it was very likely that respondents’ product was made by the patented process,[9] which was not the case here. [10] 

Additionally, his Honour found that the original letter of demand sent by Calix's lawyers to Grenof constituted an unjustified threat, although his Honour found that there was "no evidence to suggest that Grenof suffered any loss by reason of Calix having made the unjustified threat." [11]

Significance of the decision

This decision highlights the importance of retaining expert witnesses who are appropriately skilled in the art, particularly in light of Justice Nicholas' comments on that issue as identified above.

The decision also briefly analysed s 121A of the Act, a provision which rarely arises for consideration, with his Honour noting that it, "… is primarily aimed at circumstances in which the plaintiff has access to the defendant’s product, but not the defendant’s process" [12] and confirming that the Court would have to be satisfied that it was very likely that the product was made by the patented process for it to apply. [13]

Christian Dimitriadis SC and Ben Gardiner KC appeared for the successful respondents, instructed by Ben Coogan and Georgia Campbell of Thomson Geer.

For more information on this decision, or enforcing or defending the enforcement of patents generally, please contact a member of Thomson Geer’s Intellectual Property Team.

Authors

Ben Coogan | Partner | +61 7 3338 7503 | bcoogan@tglaw.com.au

Georgia Campbell | Senior Associate | +61 7 3338 7541 | gecampbell@tglaw.com.au

Footnotes

[1] [2023] FCA 378

[2] At[9].

[3] At[89].

[4] At[47].

[5] At[46].

[6] At[33].

[7] At[116]-[117].

[8] At[130].

[9] At[87].

[10] At[88].

[11] At[131].

[12] At[86].

[13] At [87].