Patents: The Court of Appeal's decision in Peterson Portable Sawing Systems

Peterson Portable Sawing Systems v Lucas (4 March 2005, CA 64/03 and CA 97/03, Anderson P and McGrath and Glazebrook JJ) was an unsuccessful appeal by Mr Peterson and his company against a High Court decision that they infringed Lucas' patent for a portable sawmill, rejecting Peterson's claims that the patent was invalid. Surprisingly, the decision took nearly a year to issue from the date of hearing.

Mr Lucas, an Australian, had developed the Lucas mill in response to competition from an American-designed apparatus known as the "Lewis mill". The claim for novelty of the Lucas portable sawmill centred on a moving device for raising in unison the two parallel rails along which the saw mechanism ran.

Mr Lucas filed a provisional patent for the Lucas mill in the Australian Patent Office on 24 March 1994. The following April, Mr Peterson visited Mr Lucas, who allowed him to photograph the Lucas mill and gave him with a copy of the provisional patent specification.

Shortly afterwards, Mr Peterson began marketing successive new designs in New Zealand with significant points of similarity to the Lucas mill. In 1999, the Lucas interests sued Mr Peterson and his company in New Zealand for patent infringements and for breach of the Fair Trading Act.

High Court decision

The principal issues in the High Court were challenges to the validity of the patent, alleging lack of novelty and obviousness.

Section 41(1)(e) of the Patents Act permits a Court to revoke a patent on the ground that the invention is not new having regard to what was known or used before the priority date of the claim in New Zealand.

Similarly, section 41(1)(f) allows the Court to revoke a patent on the ground that the invention is obvious and does not involve any inventive step based on what was known or used before the priority date of the claim in New Zealand.

Justice Fisher upheld Lucas's claim for infringement. On the allegation of lack of novelty, Justice Fisher canvassed the orthodox principles for interpreting patent specifications and then went on to consider the new Peterson designs in issue in light of the previous Peterson design and then against the Lewis and other mills. As a matter of fact, the judge found that the Lucas patent was not open to challenge on the basis that it lacked novelty.

On the allegation of obviousness, the judge held that the starting point for determining obviousness is the four-stage analysis set out in Windsurfing International Inc v Tabur Marine (Great Britain) Ltd [1985] RPC 59 at 73, namely:

"The first [step] is to identify the inventive concept embodied in the patent in suit. Thereafter, the court has to assume the mantle of the normally skilled but unimaginative addressee in the art at the priority date and to impute to him what was, at that date, common general knowledge in the art in question. The third step is to identify what, if any, differences exist between the matter cited as being "known or used" and the alleged invention. Finally, the court has to ask itself whether, viewed without any knowledge of the alleged invention, those differences constitute steps which would have been obvious to the skilled man or whether they require no degree of invention."

The judge then went on to identify supplementary principles, including the important principle that the mere fact that the claim is merely to an improvement to a product already on the market does not preclude an inventive step ( Hickman v Andrews [1983] RPC 147 at 149).

Applying these principles, Justice Fisher found that the Lucas mill survived the obviousness challenge by bringing together in one mill, for the first time, a series of advantages which combined lightness, ease of assembly, open access through the end-frames and speed of operation. In reaching his conclusion, the judge preferred the expert evidence of the respondent's witnesses over that of the appellants.

In summary, Justice Fisher found that none of the challenges to validity were sustainable and that the Peterson designs infringed the Lucas patent and that both Mr Peterson and his company were liable for infringement. Mr Peterson and his company appealed.

Court of Appeal Decision

In the Court of Appeal, the appellants challenged all aspects of the High Court decision. In dismissing the appeal, the Court endorsed the orthodox principles of the interpretation of patent specifications and the assessment of obviousness as set out by Justice Fisher.

The Court concluded that, though the concepts of obviousness and novelty may be subtle when expressed abstractly or when applied to a particular case, there was no basis for assuming that the High Court had misunderstood these.

It agreed with Justice Fisher that the inventive concept in Lucas' patent was a simple but not obvious combination of known factors, noting that the question of whether the Lucas mill was anticipated or obvious was one of fact, and the appellants had not met their onus of satisfying the Court that the High Court was wrong in its conclusion, either through applying wrong tests or because of an absence of an adequate evidential basis for the conclusions. In doing so, the Court emphasised that the crucial test in assessing inventiveness is the statutory expression examined in terms of the orthodoxy of Windsurfing.

The Court of Appeal also confirmed the High Court's finding that Mr Peterson as the principal of the Peterson company was personally liable as a joint tortfeasor for participating in a common design with the company.

Comment

Patent decisions at the Court of Appeal level are few and far between, and this judgment is interesting as it represents a modern high-level endorsement of orthodox principle in relation to the interpretation of patent specifications and issues of inventiveness and as it provides a reference summary of orthodox principle.

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