Australia: How best method became a major pitfall for foreign (and domestic) patent owners in Australia

Failure to disclose the best method known to the patentee of performing the invention¹ has proven to be a powerful ground of attack in Australia - if successful, it is capable of rendering all claims of the patent invalid. While other key jurisdictions have abandoned the best method requirement (it was abolished in the US in 2011, the UK in 1977, and is not a consideration under European laws), it is still a requirement under Australian patent law - despite calls for its abolition.

Given this difference between Australian law and other jurisdictions, it is important for foreign patentees to be aware of the requirement and its implications. Best method has gained significant traction as a ground of revocation as a result of recent decisions, with the effect that it is:

• not only peculiar to Australia but also more onerous than previously understood;
• more difficult to cure any "best method" defect by amendment, and;
• assessed at the filing date (which is often at least 12 months and can be significantly later than the priority date).

In this article we discuss the best method requirement under Australian patent law and the reasons for its growing significance as a ground of revocation.

Best method is peculiar to Australia and more onerous than previously understood

Given differences between patent validity requirements between major jurisdictions, it is necessary for patent owners to proceed with caution when prosecuting or enforcing patents. Australia's best method requirement provides a good example.

In the case of Les Laboratoires Servier v Apotex Pty Ltd [2016] FCAFC 27 (Servier) Servier's patent was found to be invalid on the sole basis that it did not disclose the best method known to it of performing the invention. The primary judge found that the patentee's description of its best method was "wholly inadequate',² and the Full Court of the Federal Court of Australia upheld the primary judge's findings. The patentee had provided a high level description that the invention directed to arginine salt of perindopril was 'prepared according to a classical method of salification of organic chemistry' (emphasis added).³ While it was common ground between the experts that it was possible to produce an embodiment of the invention claimed, this was insufficient to meet the requirement of best method as the skilled person would have had to engage in 'extensive trial and error experimentation'.⁴ The Court found that even though the invention was for a product and not a process, the best method obligation was not met by simply identifying the claimed compound.

The Servier decision reinforced the importance of satisfying the best method requirement and made clear that the requirement was more onerous than previously understood.

Difficulties amending a patent to 'cure' a failure to disclose the best method

The ability to 'cure' a failure to disclose the best method by amending a patent depends in part on whether the request for examination of the relevant patent was before or after April 2013.

Prior to amendments made by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (RTB), patents were able to be amended to include further description, even after grant. This practice allowed patentees to amend patents in the Patent Office to include the best method and that position continues to apply to pre-RTB patents. However, where infringement/revocation proceedings are before a court, amendments can only be made by the court, and the court must exercise its discretion to allow any amendment. Experience has taught that the court is more reluctant to exercise that discretion in favour of allowing any amendment, than previously anticipated.

In Servier, following judgment in the initial Federal Court decision, the patentee attempted to amend the patent to introduce disclosure of a method, in order to address the court's findings concerning best method. However, the court refused the amendment because of evidence that the issue had previously been flagged during the application process and the patentee had chosen not to address it.⁵ The correspondence between the patentee and their Australian patent attorney during prosecution of the application showed that the patent attorney recommended the inclusion of additional disclosure even if it was not strictly necessary. The court also considered that the timing of the amendment request was relevant to its discretion - the patentee had delayed in seeking its amendment until after judgment, instead of during trial.⁶

Similarly, in BlueScope v Dongkuk (No 2) [2019] FCA 2117, there was a finding of invalidity for failure to disclose the best method, due to the phrase 'special operational measures' which would not have been understood by the skilled addressee.⁷ In that case, the patentee applied at the outset of the court proceeding to amend the patent to include additional disclosure in relation to the 'special operational measures'.⁸ While the amendments were technically allowable (under the old Patents Act) the court refused the amendment primarily because the patentee had "constructive knowledge" of the need to amend the specification about 10 years earlier, as the phrase of concern was raised by Patent Offices in Australia, South Korea, Japan and the US.⁹ The court found that the patentee had gained a commercial benefit by withholding the best method to the detriment of the public, and this was a calculated decision.¹⁰

Under the post-RTB provisions of the Patents Act,¹¹ amendments to the disclosure of the specification are not allowed where this would result in added matter. This essentially rules out any amendments that would correct deficiencies in relation to best method, for patents for which requests for examination were made after April 2013.

However, where a corresponding divisional patent application remains on foot it may be possible to amend that application in the Patent Office (before grant) to include the best method. This provides another good reason to maintain a live divisional patent application.

Timing - the requirement is assessed later than what would be expected

A 2018 decision of the Federal Court of Australia found that the relevant date for assessing compliance with best method is the filing date of a patent or a divisional patent, rather than the priority date.¹²

The timing of the assessment for best method presents a problem - the patentee has an ongoing obligation of disclosure up to the filing date. This is often 12 months following the priority date, however in the case of divisional patent applications this can be years later. Failure to update the disclosure to include the best method known to the patentee at that date - which may follow subsequent research and development - can result in invalidity.

In Dometic Australia Pty Ltd v Houghton Leisure Products Pty Ltd [2018] FCA 1573 (Dometic), it was held that even where the best method is disclosed at the filing date of the parent patent, if the patentee becomes aware of a better method prior to filing a divisional application, then the divisional patent will be vulnerable to future invalidity claims. Fortunately for the patentee in that case, they were found not to have been aware of the true best method at the time of filing, which saved the patent from invalidity.¹³

Key takeaways

In Australia best method has gained significant traction and become a "go to" ground of invalidity for revokers. This is a consequence of it being:

• a peculiar Australian requirement and more onerous than previously understood;
• difficult to cure failures, and;
• assessed following the priority date.

In light of this, patentees should:

• Carefully consider compliance with best method when filing Australian patent applications and before seeking to enforce granted patents. In doing so, they should ensure that this is assessed having regard to any further research or development that took place before the relevant filing date.
• For pre-RTB patents, patentees should consider whether it is desirable to remedy any failure or questionable failure to disclose the best method by amending the patent in the Patent Office.
• For post RTB-patents, patentees should consider maintaining live divisional patent applications so that they might be amended if a corresponding granted patent is vulnerable to a best method attack.

While the best method requirement remains a part of Australian patent law, it is likely to remain a 'go to' ground of invalidity by those facing or seeking to avoid infringement actions in Australia.

Footnotes

¹ Section 40(2)(aa) of the Patents Act 1990 (Cth)

² Les Laboratoires Servier v Apotex Pty Ltd [2013] FCA 1426 [179].

³ Ibid [141].

⁴ Ibid [177].

⁵ Ibid [250].

⁶ Ibid [243] (in obiter).

⁷ BlueScope v Dongkuk (No 2) [2019] FCA 2117

⁸ Ibid [1336].

⁹ Ibid [1511]-[1512].

¹⁰ Ibid [956], [1512].

¹¹ Section 102 of the Patents Act.

¹² Dometic Australia Pty Ltd v Houghton Leisure Products Pty Ltd [2018] FCA 1573 [233].

¹³ Ibid [261].