Divisional applications entitled to benefit from grace period
Mont Adventure Equipment V Pheonix Leisure Group,  FCAFC 84
The Full Federal Court recently handed down a decision that clarifies the law in Australia provides a full twelve month grace period to divisional patents. Where a divisional application claims an invention disclosed in a parent application, the divisional application will not be invalidated by self-disclosure or self-use of the invention by the patentee within twelve months prior to the parent application. This provides a sensible and practical outcome whereby the legislative intent appears to have been realised to provide patent applicants with the full scope of the twelve month grace period for prior self-disclosure or self-use of an invention.
This matter concerned an appeal from the decision of a primary judge of the Federal Court of Australia. The appeal decision was of significant interest as the primary judge had found that a divisional application is not entitled to the benefit of the 12 month grace period for self-disclosure that is afforded to its parent application. Thankfully, the appeal decision overturned the primary judge’s findings.
Facts of the case
The appeal case considered the effect of section 24 of the Patents Act 1990 (Cth) and regulations 2.2 and 2.3 of the Patents Regulations 1991 (Cth). These provisions deal with the 12 month grace period during which prior publication or use of an invention by the applicant/patentee does not deprive the invention of novelty, inventive step or innovative step.
The question in dispute in the appeal concerned the meaning of the phrase ”the filing date of the complete application” found in regulation 2.2(1A). Essentially, the Court was required to determine whether this phrase refers to the filing date of the initial parent application or the divisional application.
The appellant, Mont Adventure Equipment Pty Ltd (Mont) filed a standard patent application on 13 May 2005. Subsequently, on 22 November 2006, Mont filed an innovation patent as a divisional application divided from the parent standard patent application. The patent applications are in respect of a travel pack.
It was an undisputed fact that Mont had offered for sale the Astro 65 and Astro 80 model travel packs in October 2004, before the filing date of the parent standard patent application, and those travel packs embodied each of the integers of claims 1 to 5 of the divisional innovation patent. Mont commenced patent infringement proceedings against the respondent, Phoenix Leisure Group Pty Ltd (Phoenix), alleging that Phoenix had infringed the innovation patent. Phoenix cross-claimed that the innovation patent was invalid due to a lack of novelty or an innovative step due to the prior public disclosure of the Astro 65 and Astro 80 model travel packs of Mont.
The preliminary question for determination by the primary judge was whether, for the purposes of determining the validity of the innovation patent, ”the filing date of the complete application”, referred to in the regulations, was:
- The filing date of the complete standard patent application, namely 13 May 2005; or
- The filing date of the complete application for the innovation patent, namely 22 November 2006.
If ”the filing date of the complete application”, referred to in the regulations, was 22 November 2006, the offering for sale in October 2004 of Mont’s travel packs would render the innovation patent invalid. On the other hand, if 13 May 2005 was the relevant filing date, the first public offering for sale was less than twelve months before filing of the ”complete application” and the offering for sale of Mont’s travel packs would not be relevant to novelty or innovative step.
The primary judge answered the preliminary question in favour of Phoenix, that is ”the filing date of the complete application”, referred to in the regulations, for the innovation patent was 22 November 2006 which rendered the claims as lacking novelty and thus the innovation patent was revoked.
The appeal was heard by Emmett, Bennett and Jagot JJ who delivered separate judgements, albeit substantially in agreement with each other. Of note, the Court also granted leave to the Institute of Patent and Trade Mark Attorneys of Australia (IPTA) to intervene in the hearing to make submissions in support of the contentions advanced by Mont.
Justice Emmett noted that to construe the reference in section 24 to the filing date of the complete application as a reference not to the parent application, but to the divisional application, would be to render entirely nugatory the protection that would otherwise be afforded by section 24. Justice Emmett found that to construe the phrase ”the filing date of the complete application” as referring to the parent application, and not to the divisional application, achieves a harmonious result and the apparent goal of the provisions.
Justice Bennett commented that the drafting of the regulations is not a model of clarity. However, her Honour saw no reason why a divisional application, fairly based on a parent application and entitled to the priority date and term of the parent application, should be deprived of the benefit of the grace period. Justice Bennett apparently saw no rationale to require distinct considerations if there was a publication or use of the invention within twelve months before the filing date of the parent application, or within twelve months before the filing date of the divisional application.
Justice Bennett noted, however, that the regulations leave open the effect of new information in a divisional application. If, for example, additional information in a divisional application were for a new or different invention, so far as claimed in some of the claims, the grace period for section 24 in respect of that additional information would date back from the filing date of the divisional application and not the parent application.
Justice Jagot highlighted the fundamental requirements of the task of statutory construction, including the following considerations:
- The clause should be construed in context ”so that it is consistent with the language and purpose of all the provisions of the statute” and ”on the prima facie basis that… [the statutory] provisions and intended to give effect to harmonious goals”;
- While this may permit a ”strained construction” of the words used in order to ensure effect is given to the intention of the legislature, ”where the words actually used are not reasonably capable of being construed in the manner contended for, they will not be so construed”;
- Extrinsic material (in this case, an explanatory statement) may be considered in the task of construction. Nevertheless, the ”words of the statute, not non-statutory words seeking to explain them, have paramount significance”. Justice Jagot considered these principles and concluded that Mont’s approach to the construction of regulation 2.2(1A) is to be preferred. Her Honour found the construction of the regulation posed by Phoenix to be inconsistent with the treatment of divisional applications in all other parts of the statutory scheme, which in effect, unite the divisional application with its parent application. Her Honour also noted that regulation 2.2(1A) is capable of more than one meaning, primarily, because the reference to the phrase ”the complete application” is elliptical.
Justice Jagot found that the construction posed by Mont, which in effect meant the complete application within the meaning of regulation 2.2(1A) is the application which first disclosed the invention, was persuasive and enabled the clause to operate in a manner consistent with the other provisions of the Act and Regulations. Jagot J also considered an explanatory statement associated with the regulations, that were amended in 2002, which supported this construction.
Emmett, Bennett and Jagot JJ each found the preliminary question should have been answered in that ”the filing date of the complete application” within the meaning of regulation 2.2(1A) is the filing date of the parent standard patent application, i.e. 13 May 2005. This means that the innovation patent obtains the benefit of the twelve month grace period afforded to the parent application and Mont’s Astro 65 and Astro 80 model travel packs are not relevant to the novelty or innovative step of the innovation patent.
Their Honours allowed the appeal and set aside the orders of the primary judge.
In summary, this case importantly clarifies that where a divisional application claims an invention disclosed in a parent application, then the divisional application is treated as having the filing date of the parent application. The divisional application will not be invalidated by self-disclosure or self-use of the invention by the patentee within twelve months prior to the parent application.
In the event a patent application is filed and relies on the twelve month grace period for self-disclosure, patent applicants can disclose more than one invention in a single complete application; knowing the full grace period will also apply to any divisional applications that are filed for inventions disclosed in the parent application.