Quaker out of grace in the Full Court as the reasonable trial grace period is limited

Date: 5 May 2021
Court: Full Court of the Federal Court of Australia
Judges: Beach, Moshinsky and Thawley JJ

Background

Australian Patents AU2012304245 and AU2013100458 (Patents), owned by Quaker Chemical (Australasia) Pty Ltd (Quaker), relate to methods of detecting accidental high pressure fluid injection (HPFI) injuries, which can cause severe health consequences. HPFI injuries are known to be associated with hydraulic machinery used in mines and the invention involved the inclusion of fluorescent dye in hydraulic fluid, allowing UV detection of an HPFI in the human body.

In the first instance decision that preceded this appeal, Quaker was successful in establishing that Fuchs Lubricants Pty Ltd (Fuchs) had infringed the Patents pursuant to s117 of the Patents Act 1990 (Cth). Fuchs unsuccessfully counterclaimed for revocation of the patents on numerous grounds, including that the invention had been disclosed by the inventor before the relevant priority date. While there was no dispute that there had been disclosures of all elements of the invention as claimed, they were deemed by the primary judge to be protected by the ‘reasonable trial’ grace period. Fuchs appealed.

Key Issues

Under Australian law, various statutory grace periods allow for certain public disclosures of an invention by a patent applicant to be disregarded for the purposes of determining whether the invention is novel and inventive. The most common grace period relied upon covers self disclosures made in the twelve months prior to the filing of complete application.

However a further grace period extending twelve months prior to the earliest claimed priority date covers a working of the invention “for the purposes of reasonable trial” which is necessarily in public, for example, large machinery which must be trialled in a public place outdoors (reasonable trial grace period).

In the present case, two key disclosures by the inventor occurred more than twelve months prior to filing the complete application, but within twelve months prior to the filing of the relevant priority document, specifically a disclosure (in the absence of any confidentiality agreement) of the invention to a manager at Metropolitan mine and a demonstration of it to mine personnel with a simulator in the Metropolitan mine car park.

At first instance, Robertson J concluded that, although these disclosures did not involve an actual working of the invention, they fell within the scope of the reasonable trial grace period as they were a necessary precursor for, and directed towards, the eventual working of the invention for the purposes of reasonable trial.

While the trials of the invention which subsequently took place may have satisfied the requirements of the reasonable trial grace period, Fuchs argued that the primary judge had cast the grace period too widely. Those disclosures did not involve a working of the invention for the purpose of a reasonable trial, and there was no necessity for the disclosures to be public.

Quaker argued that Fuchs’ position led to potentially absurd and unjust consequences, since in the lead-up to any public trial, there would need to be disclosures for the purposes of health, safety and planning. It contended that the finding of the primary judge, that the three key disclosures “were part of one course of conduct that involved, and arose in the circumstances of, the working in public of the invention of the relevant purposes” was correct.

Outcome

The Full Court held that the reasonable trial grace period provisions were read too expansively by the primary judge. While accepting that the relevant grace period could encompass some necessary disclosures in advance of the trial, this did not extend as far as disclosures such as introducing the invention to a third party. There needed to be some ‘direct or close connection’ with the physical working.

Further, it was not reasonably necessary that the disclosures be public as they could have easily been the subject of confidentiality constraints. Indeed the inventor had given evidence at trial that he accepted this.

Accordingly, the appeal was allowed and all claims of the patents were invalidated as lacking novelty.

Implications

It is advisable that grace periods be relied upon only as a last resort, and that patent protection be considered and sought at an early stage to avoid issues such as those arising in this case. Where disclosure is necessary prior to filing of a patent, confidentiality agreements should always be put in place (preferably written), and if the owner of the invention becomes aware of a disclosure, patent protection should be sought as soon as possible.