Ignorance of the law may not be a valid excuse but, when it comes to Australian patents, it appears that ignorance of the best method may well be excusable. The recent Federal Court decision in Dometic Australia Pty Ltd v Houghton Leisure Products Pty Ltd  FCA 1573 (‘Dometic v Houghton’) highlights the importance of ensuring that the best method of performing the invention is disclosed in the complete specification at the time of filing, especially when filing a divisional patent application.
Australian Innovation Patent No 2016101949 (the Patent) entitled ‘Improved air conditioning system’ relates to air conditioning systems for use in confined areas. The Patentee (Dometic Sweden AB) alleged that Houghton Leisure Products Pty Ltd (‘Houghton’) had infringed the Patent and Houghton filed a cross-claim for revocation of the Patent on various grounds including failure to disclose the best method of performing the invention.
The invention was developed by Bruce Henshall (‘Henshall’) and two other inventors, when employed by Aircommand Australia Pty Ltd (‘Old Aircommand’) which was a subsidiary of Atwood Australia Holdings Pty Ltd (‘Atwood’) also known as Aircommand Australia Pty Ltd (‘New Aircommand’). A provisional application for the invention was filed by New Aircommand on 6 March 2014. Later in 2014, Dometic Sweden AB (‘Dometic’) acquired all shares of Atwood and New Aircommand became a subsidiary of Dometic. New Aircommand filed a complete application (parent application to the Patent) for the invention on 6 March 2015. In March 2016, the complete application was assigned to Dometic and, on 7 November 2016, Dometic filed the application for the Patent as a divisional innovation application. Notably, Henshall had ceased his employment with New Aircommand prior to the complete application being assigned to Dometic and the patent attorneys engaged by Dometic were different from the ones that had drafted the complete application.
During the Court proceedings, Henshall gave evidence in relation to the best method ground, claiming that the Patent did fail to disclose the best method of performing the invention. Henshall’s evidence was relied upon by Houghton to argue that the Patent was invalid. The Court admitted Henshall’s evidence, despite Henshall being an inventor of the Patent, because:
- Henshall was not the assignor of the Patent; and
- Henshall was not directly challenging the validity of the Patent.
Ultimately, the Court found that Houghton had not infringed Dometic’s Patent and also that the Patent was valid.
Date of Filing
The Court determined that the relevant date for complying with the best method requirement in s 40(2)(aa) of the Patents Act 1990 (Cth) (‘Patents Act’) is 7 November 2016, i.e. the date on which the application for the Patent was filed. The Court referred to several other notable Court decisions as supporting this and emphasized that the best method known to the Applicant is required to be disclosed ‘at the time when the complete specification was filed’.
Notably, the decision of Mont Adventure Equipment V Phoenix Leisure Group  FCAFC 84 (‘Mont Adventure’) was not considered, in which the Full court had considered the meaning of ‘the filing date of the complete application’ in relation to divisional applications. In Mont Adventure, the Full Court determined that, for the purposes of sec 24(1) of the Patents Act (grace period provision), the filing date of a divisional application is taken to be the filing date of the parent application. Although it could be argued that Mont Adventure was limited to the filing date of a divisional application in relation to the grace period only, the general observations of the Court suggest otherwise. In particular, Emmett J stated, at :
“The phrase “the filing date of the complete application” must be construed in the context of all of the provisions of the 1990 Act and the Regulations, so as to give a harmonious result achieving the apparent goal of the provisions. To construe the phrase as referring to the Parent Application and not to the Divisional Application achieves that result.”
Further, at , Jagot J succinctly stated:
“Where a divisional application discloses information that was also disclosed in the earlier (or parent or original) application the filing date of the divisional application is taken to be the filing date of the earlier application.”
Nevertheless, as Mont Adventure related to grace periods and was not considered in Dometic v Houghton, it can be inferred that, at least in regard to disclosing the best method, the filing date of a divisional application is to be taken to be the actual date on which the divisional application was filed.
Knowledge of Best Method
The best method was determined to be the use of complementary curved air outlets, which was known to Henshall and New Aircommand (the Applicant for the parent application). Based on the evidence presented, the Court held that the best method was not disclosed in the specification of the Patent.
Although Henshall had ceased his employment with New Aircommand prior to the parent application being assigned to Dometic, Henshall left behind documents relating to the invention with New Aircommand. The Court, while considering whether Dometic knew the best method at the time of filing, noted:
- Knowledge held by a subsidiary (New Aircommand) may not be imputed to the parent company (Dometic);
- “Control of a source of knowledge cannot be equated with knowledge of the information contained in that source”;
- Although certain drawings left behind by Henshall showed the air outlets, there was no accompanying description or other indication that the outlets had a significant effect on the performance of the invention.
Based on the above, the Court concluded that Dometic did not know the true best method at the time of filing (7 November 2016). In the Court’s view, Dometic had satisfied the best method requirement in s 40(2)(aa) of the Patents Act as it had disclosed the best method known to it (although not the true best method) at the time of filing of the Patent.
It is interesting to note that, while the Patentee (Dometic) would have exploited the true best method of performing the claimed invention (by selling the product) and was presumably aware of the specific shape of the air outlets (although not their significance), the fact that it was unaware at the time of filing that the specific shape of the air outlets was indeed the best method has saved the Patent from revocation.
In relation to divisional applications, Applicants would now need to consider if the best method of performing the invention known to them has been sufficiently disclosed in the complete specification, even if they became aware of the best method after the priority date or the filing date of the parent application. For pre-Raising the Bar Act cases (standard patent applications with an examination request filed before 15 April 2013), amendments can be made to the specification at a later stage, at least until the time of grant. However, for post-Raising the Bar Act cases (standard patent applications with an examination request filed on or after 15 April 2013), unless the filing of a further divisional application with the added best method is possible, a specification that has already been filed cannot be amended to include a new best method as the amendment would disclose new matter that extends beyond what was disclosed by the specification as filed and would thus be unallowable under s102 of the Patents Act.
However, adding new matter to the specification at the time of filing the divisional application, or at a later stage, may lead to further complications as the new matter added to the specification would have a later priority date and the newly added matter may then have an effect on claim construction, thereby bringing into question the priority date of those claims. Moreover, often the decision to file divisional applications is made at short notice upon failure to gain acceptance by the acceptance deadline, making it impractical for the Applicant to consider and confirm if the best method known to them has been disclosed in the specification of the divisional application.
Nevertheless, it will be comforting for Applicants and Patentees that rogue inventors will not be able to sabotage a patent application or patent by withholding the best method from the Applicant at the time of filing. Similarly, assignees filing a divisional application without knowledge of the best method which was known to the original Applicant (and not disclosed in the specification) will likely be immune from having their patent revoked for not disclosing the best method of performing the invention.
Although this Federal Court decision potentially has serious implications, it remains to be seen if the requirement of disclosing the best method known to the Applicant at the actual date of filing of a divisional application will be enforced in the future, especially considering the Mont Adventure decision.
In the meantime, in light of the Dometic v Houghton decision, Applicants and Attorneys should note that:
- The filing date of a divisional application is taken to be the actual date on which the divisional application is filed (instead of the filing date of the parent application); and
- The best method of performing the invention known to the Applicant at the time of filing a divisional application has to be sufficiently disclosed in the complete specification as it could potentially affect the validity of the patent.
 Pfizer Overseas Pharmaceuticals v Eli Lilly & Co  FCAFC 224 , ; Les Laboratoires Servier v Apotex Pty Ltd  FCAFC 27 ; Kimberly Clark Australia Pty Ltd v Arico Trading International Pty Ltd  HCA 8.