Patent revocation for fraud, false suggestion or misrepresentation
Uniline Australia Ltd v SBriggs Pty Ltd  FCA 222 (16 March 2009)
Revocation proceedings based upon grounds of fraud, false suggestion or misrepresentation have been uncommon in Australia. The Federal Court was recently requested to determine whether statements made in a patent specification, or made in written communication with IP Australia, were instances of fraud, false suggestion or misrepresentation.
Facts of the case
Sbriggs Pty Ltd (“Sbriggs”) is the exclusive licensee of Australian Patent No. 706458 entitled “Spring Clutch” (“the patent”), which relates to a helical spring typically used with roller blinds. Sbriggs threatened Uniline Australia Ltd (“Uniline”) with patent infringement proceedings, and was subsequently sued by Uniline for unjustified threats. Sbriggs cross-claimed infringement of only claim 13 of the patent. Whilst Uniline counterclaimed that the patent was invalid based on a number of typical revocation grounds, the Federal Court was unusually asked to consider whether the patent, or a voluntary post-grant amendment to the patent claims, were obtained by fraud, false suggestion or misrepresentation.
Much of the case, including the alleged fraud, false suggestion or misrepresentation, centred upon an object statement in the patent specification, which read: “It is an object of the invention to provide a bi-directional clutch which avoids the need for a plurality of helical springs and complex configuration of the second shaft.”
A key aspect turned on whether, properly interpreted, the conjunction “and” meant:
- the invention avoided the need for a plurality of helical springs altogether, or
- the invention avoided the need for a plurality of helical springs only when in combination with a complex configuration of a second shaft.
The alleged infringing product of Uniline contained multiple separate springs.
Interpretation (1) essentially meant there was no infringement of claim 13, whereas interpretation (2) meant claim 13 could be infringed. The embodiments in the patent specification only described a unitary helical spring.
During the court proceedings, Sbriggs argued for a particular construction of the claims which resulted in claim 13 covering a spring clutch with multiple separate springs wound in opposite directions. Uniline countered this construction by arguing that the inventor had represented in the specification itself that the invention as claimed provided an advance over the prior art by providing a bi-directional clutch which avoided the need for multiple helical springs in favour of a single helical spring of unitary construction.
First, Uniline argued that Sbriggs had represented to IP Australia, in the body of the specification, that the invention resided in use of a single helical spring of unitary construction, on which understanding the patent was granted in view of the prior art.
Uniline said this was inconsistent with the approach now adopted by Sbriggs before the court on the question of infringement, meaning there had been fraud, false suggestion or misrepresentation, under s138(3)(d) of the Patents Act 1990, committed against IP Australia and the patent should be revoked.
Secondly, Uniline also argued that a further false representation had been contained in a letter to IP Australia by solicitors for Sbriggs stating that the aim of a post-grant voluntary amendment to the patent claims was “…to include two claims of narrow scope for the purpose of better distinguishing the invention from the prior art”. Uniline argued that, actually, based on the interpretation now adopted by Sbriggs before the court, the amendments provided a broader construction of claim 13 to cover a multiple spring arrangement, and did not better distinguish the prior art. Therefore, Uniline argued that the amendments were obtained by fraud, false suggestion or misrepresentation, under s138(3)(e), and the patent should be revoked.
Greenwood J stated the test for determining fraud, false suggestion or representation is whether the conduct of the patentee was “a material inducing factor” leading to the outcome. His Honour noted that there is no requirement to present “proof of a deliberate intention on the part of the applicant for the patent (or amendment) to the deceive the Commissioner. If the representation is based upon a belief, it is relevant to consider whether the belief is false or not held reasonably”.
As to the first representation, Greenwood J found that:
“It is difficult to conclude that a false representation arises out of an applicant putting its view or opinion of the construction of the patent to the Commissioner. SBriggs simply puts its view of construction which, it says, is consistent when the specification, the discussion of the prior art, the object and the claims are properly read in context.”
Based on this reasoning, the first assertion of false suggestion was dismissed. In regard to the second representation, Greenwood J found that:
“A statement made by an applicant in good faith to the Commissioner concerning the effect of the prior art is unlikely to provide a basis for concluding that such a statement of opinion is false, when that opinion is subsequently shown to be incorrect.”
Greenwood J noted that a statement expressing an opinion about the prior art and amendments to the claims is simply a debate between the applicant and the Commissioner which does not qualify as a suggestion of bad faith. Therefore, the second asserted false suggestion was also dismissed.
On other matters, no infringement was found and accordingly the action for unjustified threats made by Sbriggs was successful.
This decision means, somewhat fortunately for practitioners and patentees, that submissions made to IP Australia, in good faith and as part of routine argument or amendment, will rarely constitute a basis for a finding of fraud, false suggestion or misrepresentation.
When assessing whether a fraud, false suggestion or misrepresentation exists, a broader test of “was a representation based on a false or unreasonable belief” applies, rather than “was the representation deliberately intended to deceive the Commissioner.” However, whilst the broader test does apply, it appears a somewhat higher threshold is required to be met so as to establish fraud, false suggestion or misrepresentation.
If there is some reasonable basis for interpreting a claim in a particular manner in submissions to IP Australia, even should a court ultimately disagree, it appears fraud, false suggestion or misrepresentation are not typically available to revoke a patent. Interestingly, the court did not apparently rely on any statements made to IP Australia when construing the scope of the claims.
Communications with IP Australia were only considered for the allegations of fraud, false suggestion or misrepresentation. The scope of the claims was interpreted according to normal principles using the patent specification before the court. That is, no question of file history estoppel arose. This affirms the general position in Australia that, unlike the US for example, representations or amendments during prosecution are not generally considered when a court construes claim language.
This decision also highlights the potential dangers in having “object” statements in a patent specification. Much was made of the object statement providing impetus to read down the scope of the claims. The object statement was clearly a substantial hindrance to the patentee’s attempt to obtain a broader interpretation of the claims. It may be prudent practice to amend or delete such statements.