High Court clarifies fair basis principles in landmark patent decision

High Court clarifies fair basis principles in landmark patent decision

Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2004] HCA 28/2003

The High Court of Australia recently handed down a joint judgement in favour of the patentee, Lockwood Security Products Pty Ltd in which claims of its patent had been held invalid by courts below for not being fairly based on the specification. The powerful judgement of the court clarifies issues concerning fair basis and hopefully will put an end to a series of judgements where fair basis was confused with other issues and had resulted in a number of Australian patents being wrongly found invalid.

The patent related to a lock known as a deadlock which requires a key to be used on the inside and outside in order to open it. A problem of locks of this kind is that when they are opened from the outside a key is still required to open the lock from the inside. The patent was concerned with an improvement such that when the lock is opened from the outside, the locking mechanism is reset so that a key is not required to open the lock from the inside. Claim 1 was a combination claim having six integers, five of which were well known and the last defining a novel feature. On one interpretation of the claim, it could be considered as defining in the first five integers well known locks with the sixth integer so broadly stated that it virtually covered all ways of carrying out the desired object of the invention. Another view of the claim was that it essentially related to a particular combination of six integers which was novel and achieved the desired object.

At trial and in an earlier appeal the claims were held to be not fairly based on the specification and therefore invalid. Questions were also raised as to novelty, obviousness and adequacy of description. The appeal to the High Court was, however, confined to the issue of fair basis. The main thrust of the defendant’s case was that the patentee’s claims were too broad because the patentee had disclosed a single way of solving a problem but had framed its claims in such a way that it covered virtually all ways of solving the problem. In earlier judgements, the issue of the breadth of the claims and the issue of whether or not they were fairly based, were linked to questions of inventive step, merit of the invention and technical contribution to the art. The High Court, in a refreshingly bold manner, swept aside all of these notions and held that the issue of fair basis does not involve any consideration of inventive step, merit of the invention or technical contributions to the art.

The court also made it clear that arguments based upon old authorities which pre-dated the statutory basis for fair basis in Section 40(3) were irrelevant. Similarly, United Kingdom cases decided on the 1977 UK Patents Act are irrelevant for the purposes of determining fair basis in Australia. In this respect, the High Court may have finally put the last nail in the coffin of the case Mullard v Philco 53 RPC 323. That case, dating from the 1930s, was often cited to support arguments that the claims were invalid because they were too broad, having regard to the merit of the invention.

The Court rejected this approach and reinforced that of the Court in the earlier Australian cases, (1977) 180 CLR 236 Olin v Super Cartridge and Kimberly-Clark v Arico (2001) 207 CLR1, that the question of fair basis is not to be resolved by consideration of whether the monopoly claimed would be an undue reward for the disclosure but rather whether it travelled beyond the matter which the specification disclosed.

After clarifying what fair basis does not involve, the High Court’s approach to the question of fair basis was relatively straightforward. It followed authorities which required that there be a real and reasonably clear disclosure of the claimed invention in the specification.

The enquiry is essentially confined to matters which are contained within the specification itself and is not to be confused with issues of inventive step or the like. The views of a person skilled in the art can, however, be taken into consideration in the limited context of interpretation of the meaning of the terminology used in the specification and certainly not to be considered in the context of inventive step or merit of the invention. The court also followed authorities which had held that the claims must not travel beyond matter described in the specification. The court cited with approval the finding in AtlantisCorporation Pty. Ltd. v Schindler (1977) 33 IPR 29 that the claim in that case was held to be not fairly based because it travelled beyond the subject matter disclosed in the specification. In that case, the specification described the structure of a particular form of sub-soil drainage module. The claims, however, claimed a structure without reciting any purpose for which the structure could be used.

A matter of considerable practical importance to patent attorneys was the Court’s discussion of the role of the “consistory statement”. The Court had regard to the fact that the body of the specification contained a statement of the invention in broad terms corresponding to claim 1 and that further description of the relevant elements were generally prefaced by words such as “preferred”, “may be”, “not to be understood as limiting”, “suitable” and “one particular form”. While the Court made it clear that mere verbal conformity between the consistory clause and the claim would not be sufficient to establish fair basis if the claim was inconsistent with a proper reading of the specification as a whole, it seems to confirm the desirability of including a consistory statement and, of course, exercising care to ensure that the preferred embodiment is described as just that.

A further and important point stressed in the judgement is that in a combination patent it is the combination claimed that is required to involve an inventive step and not each or any individual integer.

The High Court, having focused its attention on the central issues of fair basis, had no difficulty in finding that the claimed invention had a real and reasonably clear disclosure in the claimed specification. The court also had no difficulty in finding that the claims did not travel beyond the specification. The court also upheld the well established principle that a specification need not disclose any more than a single embodiment of an invention and yet still be able to include valid claims which embrace a variety of ways of putting the invention into practice. If the High Court had not made a clear finding on this point, it may well have had far reaching adverse consequences. The court therefore held that all of the claims of the patentee’s specification were fairly based. The matter was remitted back to the Federal Court for determination of the remaining issue of novelty, obviousness and adequacy of description.


The High Court has not laid down any new rules concerning the issue of fair basis but it has gone a long way in sweeping aside a number of undesirable trends which had crept into this area of the law. As a result, this branch of the law should operate in a more rational way to the benefit of all Australian patentees.

The Lockwood specification in disclosing a single embodiment but with broad claims embracing a variety of ways of putting the invention into effect was drafted in a typical and perhaps traditional manner for inventions in the mechanical sciences. A rather different practice has evolved in the drafting of specifications in the chemical sciences where it is considered necessary to include multiple examples or embodiments to support a broad claim. The extent to which this finding of the High Court will influence the approach to drafting specifications in these other areas of technology remains to be seen.