Grace period limits: Inventor’s own disclosures kill two patents
Fuchs Lubricants (Australasia) Pty Ltd v Quaker Chemical (Australasia) Pty Ltd [2021] FCAFC 65
Need to know
- An invention should be confidential at the time of filing the first patent application.
- “Grace periods” can protect a patent from being invalidated by earlier public disclosures of the invention, though these grace periods only apply under certain circumstances.
- The grace period that covers trialling of an invention does not cover disclosures leading up to the trial itself.
What to do
- Before applying for patent protection, keep an invention confidential as far as is practicable.
- If an invention must be disclosed before applying for patent protection, ensure the disclosures are subject to an express or implied obligation of confidentiality (e.g., have non-disclosure agreements in place).
- If in doubt about whether the reasonable trial grace period applies, it may be prudent to assume it does not and to file the first patent application as a complete patent application (i.e., not a provisional).
Background
Novelty
To qualify for patent protection, an invention must be novel and inventive.
Novelty and inventiveness are assessed by comparing an invention with information that was publicly available before the first patent application was filed.
Consequently, an inventor’s own public disclosures can rob their invention of its novelty and inventiveness. It is thus best to keep an invention confidential before applying for patent protection.
Saving grace
It can be difficult to keep an invention confidential, especially if its development requires experimentation and public trialling.
The Patents Act 1990 (Cth) and regulations thus provide various “grace periods” whereby certain public disclosures of the invention made during these grace periods do not count against the novelty and inventiveness of the invention.
A common grace period
One grace period commonly relied on simply requires that a complete patent application (i.e., not a provisional) be filed within 12 months of the first public disclosure made by the patentee or their predecessor in title.
This grace period is often encountered by Australian businesses that are new to the patent application process and that only consider patent protection after receiving commercial success or interest in their invention.
The reasonable trial grace period
A less commonly considered grace period is one that protects a patent against public disclosures made via “reasonable trials” of the invention.
Under this reasonable trial grace period, it is possible to file a provisional patent application within 12 months of the first public trialling of the invention, followed by a complete patent application 12 months thereafter.
While the reasonable trial grace period can result in a complete patent application filed two years after the first public trial, this grace period only applies under narrow circumstances.
The invention
Quaker (the patentee) and Fuchs (the alleged infringer) supply hydraulic fluids to mine operators. These fluids are kept at such high pressures in mining machinery that fine streams of the fluids can inadvertently escape and inject bystanders.
High pressure fluid injection injuries often produce only a slight stinging sensation and victims may ignore them, thinking they will get better with time. However, if such injuries are not treated early, they can cause serious tissue damage and may even be fatal.
The inventor, Mr Wayne Thompson, conceived of adding a fluorescent dye to the fluid so that a suspected fluid injection can be verified by passing a UV light over the skin.
Timeline
Sep / Oct 2010: Mr Thompson’s first disclosure
Hoping to trial the invention at the Metropolitan mine in NSW, Mr Thompson disclosed the invention to the engineering manager of Peabody Energy Australia Pty Ltd (which operated the Metropolitan mine).
Oct / Nov 2010: Mr Thompson’s second disclosure
Mr Thompson demonstrated the invention to two Peabody managers in the carpark of the Metropolitan mine.
May 2011: Invention trialed at Metropolitan mine
It was not until over six months after Mr Thompson’s 2010 disclosures that the invention was publicly trialled at the Metropolitan mine.
2 Sep 2011: Quaker files provisional patent application
Quaker filed their first application as a provisional patent application, establishing a priority date of 2 September 2011. Quaker is eventually granted a standard patent and an innovation patent claiming the same priority date.
The case
Infringement proceedings
Quaker commenced infringement proceedings against Fuchs for supplying hydraulic fluids containing fluorescent dye to customers. In response, Fuchs alleged that Quaker’s patents were invalid on a number of grounds.
At first instance, Justice Robertson found Quaker’s patents valid and infringed in part.
Fuchs’ appeal to the Full Court of the Federal Court of Australia
Fuchs’ appeal turned on whether Quaker’s invention lacked novelty given Mr Thompson’s public disclosures in 2010.
Quaker argued that these public disclosures were protected by the reasonable trial grace period, which grace period covers the public working of the invention for the purposes of reasonable trial.
Findings of the Full Court
In contrast to Justice Robertson, the Full Court adopted a narrower interpretation of the reasonable trial grace period, finding that this grace period covers disclosures made public through the working of the invention.
In contrast, Mr Thompson’s 2010 disclosures were not made public through the working of the invention; instead, they were simply public disclosures ‘relating to’, ‘for the purposes of’, or ‘as a necessary precursor’ of the invention being worked in public.
The Court thus found that the reasonable trial grace period did not cover Mr Thompson’s 2010 disclosures, and thus his disclosures rendered Quaker’s patents invalid.
Tellingly, the Court commented that there was ‘no good reason’ why Mr Thompson’s 2010 disclosures could not have been kept confidential.
Key takeaways
- Ensure an invention is confidential at the time of applying for patent protection.
- Disclosures of an invention before applying for protection should be subject to an obligation of confidentiality (e.g., a non-disclosure agreement).
- The reasonable trial grace period covers disclosures made public through the working of an invention for the purposes of reasonable trial; it does not cover disclosures leading up to the trial.
- Had Quaker established a priority date via a complete patent application instead of a provisional, Mr Thompson’s 2010 disclosures would likely have been covered via the more common grace period discussed above. If in doubt, it may be prudent to pursue patent protection with the assumption that the reasonable trial grace period does not apply.
