No saving grace period patents invalidated by inventors disclosures in connection with public trials

What you need to know

• The Patents Act and regulations provide patentees with "grace periods", so that certain disclosures of the claimed invention before the priority date of the patent will not invalidate it.  
• In this case, the Full Court adopted a narrow construction of the grace period for trialling an invention in public.  
• The Full Court held that the grace period did not cover oral communications leading up to the trial.  Because of this, Quaker's patents were invalid for lack of novelty.  

What you need to do

• If you are proposing to disclose information about your invention or engage in trials before applying for patent protection, you should ensure that such disclosures and trials are protected by confidentiality arrangements.  
• If it is necessary to trial your invention in public, be aware that the statutory grace period is unlikely to apply to ancillary disclosures leading up to the trial.  

Grace periods

The novelty and inventiveness of a claimed invention are assessed against the state of the art at the priority date for the claimed invention.  However, the Patents Act 1990 (Cth) and regulations provide patentees with certain "grace periods" before the priority date.  During these grace periods, the patentee may make certain disclosures to the public about the invention, without invalidating the patent for lack of novelty or obviousness. 

This case concerned the grace period for the working in public of the invention within 12 months before the priority date, in circumstances where (i) the working in public is for the purposes of reasonable trial, and (ii) it is reasonably necessary for the invention to be worked in public because of its nature.  This case was decided under the pre-"Raising the Bar" Patents Act and regulations, although there are similar provisions under the post-"Raising the Bar" regime. 

Background to the appeal 

Quaker Chemical (Australasia) Pty Ltd (Quaker) sued Fuchs Lubricants (Australasia) Pty Ltd (Fuchs) for infringement of two patents, each with a priority date of 2 September 2011 (the Patents).  

The Patents relate to a method of detecting high pressure fluid injection (HPFI) injuries.  HPFI injuries occur when fluid kept under high pressure in machinery escapes, and is injected into a person's body.  The Patents teach the addition of a fluorescent dye to the fluid.  If there is a suspected HPFI injury, a UV light can be passed over the skin to determine if an injury has occurred.  

At first instance, Justice Robertson upheld Quaker's infringement claim in part, and dismissed Fuchs' cross-claim that the Patents were invalid (see Quaker Chemical (Australasia) Pty Ltd v Fuchs Lubricants (Australasia) Pty Ltd (No 2) [2020] FCA 306, discussed in our article here).  

Fuchs appealed against the primary judge's dismissal of its invalidity case on the ground of lack of novelty.  Quaker cross-appealed, arguing the primary judge should have made further findings on infringement in its favour.

Did Quaker benefit from the grace period? 

Fuchs' lack of novelty claim relied on two oral communications made by the inventor, Mr Wayne Thompson, to an employee of the Metropolitan mine in around September to November 2010.  The evidence indicated that Mr Thompson's disclosures were designed to create commercial interest in his invention.  

Quaker accepted that the claimed inventions would lack novelty if Mr Thompson's disclosures did not benefit from the grace period.  

The Full Court considered that the grace period provisions in the Patents Act and regulations should be construed narrowly.  The grace period applies to information made publicly available through "the working in public of the invention" for the purposes of reasonable trial.  The grace period does not apply to information made publicly available "relating to", "for the purposes of", or "as a necessary precursor to" the working in public of the invention.  

The Full Court held that "the working in public of the invention" did not embrace ancillary disclosures leading up to the working in public.  The Full Court did accept that a "working in public" may encompass some written or oral communications as part of the working, for example signs directed to employees who are involved in performing the method to be patented.  However, the Full Court held that such communications must have a direct or close connection with the physical working, such that they can sensibly be said to be part of the working.

Applying these principles to the present case, the Full Court considered that Mr Thompson's disclosures did not constitute a "working in public of the invention".  They were too distant in time from the actual trials, which occurred in December 2010 and May 2011.  The Full Court also considered that it was not reasonably necessary for those disclosures to be in public; Mr Thompson could have asked the Metropolitan mine to enter into a confidentiality agreement.    

Accordingly, Fuchs' appeal was allowed and the Patents were found to be invalid.  Because the Patents were invalid, Quaker's cross-appeal on the infringement issues was dismissed.