BlueScope Steel Buckles Under ‘Best Method’ Pressure

BlueScope Steel Buckles Under ‘Best Method’ Pressure

BlueScope Steel Buckles Under ‘Best Method’ Pressure

In a spate of recent patents to bite the ‘best method’ dust, two patents owned by BlueScope Steel Limited (BlueScope) are the latest to buckle under the pressure of Australia’s increasingly complex best method requirement in BlueScope Steel Limited v Dongkuk Steel Mill Co., Ltd (No 2) [2019] FCA 2117. While the best method beast continues to gain strength in Australia, Beach J did provide some useful guidance on the level of disclosure required to satiate its appetite for patent destruction.

Background

The two patents at issue, AU 2009225257 (Patent A) and AU 2009225258 (Patent B) relate to steel strip products having a corrosion-resistant alloy coating and methods for their preparation. The patents describe the presence of magnesium (Mg) and silicon (Si) in the alloy as being important for improving various performance characteristics of the coating, but can also result in the undesirable formation of magnesium silicide (Mg2Si), leading to defects in the alloy-coating surface.

The inventors found that controlling short range variations in the thickness of the alloy surface coating helped to minimise the proportion of Mg2Si particles (and hence defects) at the surface of the coating. Patent A stated that such variations were controlled using ‘special operational measures’. While Patent B was silent in relation to how the variations were controlled, it nonetheless emphasised the importance of controlling coating thickness variations in solving the problem of the invention.

In a counter-claim for revocation in response to infringement proceedings filed against it by BlueScope, Dongkuk Steel Mill Co Ltd (Dongkuk) asserted, inter alia, that BlueScope had failed to disclose the best method known to it of performing the invention because neither patent disclosed the ‘special operational measures’ used to control variations in short-range coating thickness.

The theoretical best method

BlueScope asserted that while it knew of the necessity to control short-range coating variations at the filing date of both patents, it had not taken practical steps to control these variations until after the filing date. Accordingly, BlueScope contended that it was not required to disclose this theoretical method because it knew only what the skilled person knew at the filing date.

However, despite an unsuccessful application by Dungkok for further discovery by BlueScope in relation to best method (discussed here), expert evidence nonetheless established that BlueScope was aware of a particular four-step process for controlling short-range coating thickness variation at the filing date of both patents. Beach J found that it was incumbent upon BlueScope to disclose this four-step process (even if it had not actually performed it) because, at the filing date:

(a) a skilled person would not have understood what was meant by ‘special operational measures’ in the context of          the specification, let alone that it was referring to the particular four-step process contemplated by BlueScope

(b) the term ‘special’ suggested use of something other than measures forming part of the common general                        knowledge; and

(c) particular aspects of the four-step process did not form part of the common general knowledge at the relevant            time.

Consequently, both patents were revoked for failure to disclose the best (theoretical) method known to BlueScope at the filing date, adding yet another layer of complexity for applicants seeking to satisfy the best method requirement.

Don’t delay, amend today

BlueScope applied to the Court to exercise its discretion to amend Patent A to include a description of the best method of performing the ‘special operational measures.’ However, this amendment was ultimately refused for several reasons, including that BlueScope unduly delayed –by some 10 years after the filing date– in requesting such an amendment.

Relevantly, BlueScope had been put on notice of the need to amend the specification through objections raised during examination in Australia and other jurisdictions. However, not only did BlueScope elect not to amend the specifications given the opportunity to do so, it also failed to provide a full and frank disclosure of this information to the Court.

In rejecting BlueScope’s amendment application, Beach J cited Jessup J in CSL Ltd v Novo Nordisk Pharmaceuticals Pty Ltd (No 2) (2010) 190 FCR 522 at [76]:

… a patentee who has been exposed to facts from which it was, or reasonably ought to have been, apparent to him or her that a claim might well be invalid unless amended, and who later seeks the favourable exercise of the Court’s discretion [to amend the specification] is, in my opinion, in no position to say that there was, on the earlier occasion, no ‘need’ to amend simply because it had not then been conclusively established that the claim was in fact invalid …

Thus, where a patentee has constructive knowledge of the need to amend and takes a calculated risk not do so, the court is unlikely to exercise its discretion to allow such an amendment. This is particularly so where the patentee has obtained a commercial benefit from the patent while withholding the best method from the public (that being the antithesis of the best method requirement).

Importantly, patents with examination request dates on or after 15 April 2013 cannot be amended after filing to include new subject matter, leaving these patents even more vulnerable to the best method beast.

Prevention is still the best cure

In reviewing the relevant case law on best method in Australia, Beach J provided some helpful guidance as to the level of disclosure required at the time of filing and the extent to which the common general knowledge of the skilled person may be taken into account in assessing best method:

  • Each essential element for performing the invention must be disclosed at the filing date, even if it could be readily ascertained by a skilled person.
  • Specific details of the method that would be well-known and understood by the skilled person need not be disclosed.
  • The best method requirement will be satisfied if the skilled person can arrive at the best method without ingenuity or undue experimentation.
  • The best method requirement will not be satisfied if the skilled person is left to make a choice (e.g., what analytical agent or equipment to use) or is left in doubt as to what a term means, where that choice or uncertainty affects the performance of the method.

What’s next?

Currently, it remains open for BlueScope to appeal the decision. However, in view of recent decisions on the best method requirement, including that of the Full Federal Court to revoke the patent in Les Laboratoires Servier v Apotex Pty Ltd [2016] FCAFC 27 in somewhat similar circumstances (discussed here), it seems unlikely that an appeal by BlueScope would succeed.

Somewhat fortuitously, BlueScope maintained pending divisional applications of both Patent A and Patent B, which may still be used as the basis to file further divisionals with supplementary disclosure of the best method. However, even this may not be enough to save the day in the circumstances.

Having actually performed and optimised the method for controlling short-range coating thickness variation for several years, BlueScope must now consider whether to include this optimised method in any newly filed divisional application at the time of filing (per Dometic Australia Pty Ltd v Houghton Leisure Products Pty Ltd [2018] FCA 1573, discussed here). If they decide not to include details of this optimised method, they will likely need to be prepared to challenge the correctness of the finding in Dometic.

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