The following article considers a recent Australian Federal Court decision concerning secret use as a ground of patent revocation in Australia.
Is an Advertisement Prior to the Priority Date a Secret Use of an Invention?
In Australia, an invention may only be granted a patent if, at the priority of the patent application, the invention is novel and possesses an inventive step over the disclosure of the prior art. As is well known, a public use or disclosure by the applicant or inventor of the invention prior to the filing of the patent application will cause the invention to be not novel and therefore, not entitled to be granted a patent.
Such use of the invention prior to filing the patent application also includes the concept of secret use, where the use of invention is conducted secretly by the applicant. Such use of the invention in secret may result in a longer monopoly than the statutory 20 year period provided by patent laws, since the applicant may enjoy a period of de facto monopoly through the secret use before the priority date. This is seen as a breaking of the patent bargain where the applicant is granted a monopoly right in the invention, in return for meeting the corresponding obligation of the public disclosure of the invention.
However, the question of whether advertising an invention for sale prior to the priority date of a patent application has not, until now, been addressed in Australia. The Australian Federal Court decision of Southern Cross Mining Services Pty Ltd v Mickala Mining Maintenance Pty Ltd [2020] FCA 1064 (27 July 2020) addressed such a question.
Southern Cross Mining Services Pty Ltd (SCM) filed and was granted Australian innovation patent No. 2013100095 for a low voltage LED “Lighting Tower”. The patent application claims an earliest priority date of 30 January 2013 and was certified on 28 March 2014. SCM commenced patent infringement action against Mickala Mining Maintenance Pty Ltd (Mickala). In response, Mickala file proceedings against SCM for revocation of the patent.
In an application to amend their grounds for pleading for revocation of the patent, Mickala has sought to test the bounds of secret use in Australia against the patent.
In their application, Mickala identified an advertisement by SCM published in a trade journal on 8 January 2012 (more than 12 months prior to the priority date of the patent) and argued that the advertisement listed by SCM amounted to secret use of the invention in Australia since the object of the advertisement was to bring about a sale of one or more lighting towers made in accordance with the alleged invention. The advertisement was argued by Mickala to embody all the essential features of the invention (even though these were not disclosed in the advertisement) merely by touting the virtues of the lighting tower in the advertisement, at 64-65:
The pleaded facts are that Southern Cross secretly used the pleaded invention by causing the advertisement to appear in the AMSJ on or before 8 January 2012 and the object of so placing the advertisement was to bring about a sale of products (one or more lighting towers) made in accordance with the pleaded invention (that is, embodying the essential integers).
As a result, the patentee is said to have enjoyed a period, before the filing of the patent application, during which it has derived a commercial benefit of placing an advertisement for the sale of products with the object of bringing about a sale of products embodying the invention as claimed without disclosing the essential integers of the claims for the invention. Thus, the patentee was provided with a de facto extension of the patent term by securing private advantage without the corresponding public disclosure as the price of the grant of the monopoly [emphasis in original].
Although it was not explicitly argued by Mickala, the main contention appeared to be that, by not identifying all the essential features of the invention in the advertisement, that SCM engaged in concealment of those essential features, thus enlivening the “secret use” provision available under section 18(1A)(d) of the Patents Act 1990 that the invention is not a patentable invention and the patent must be revoked.
How Is Secret Use Defined
The relevant “use” engaging the statutory conception of “not secretly used” in section 18(1A)(d) is understood as taking a step from which it can be concluded that the patentee has, before the priority date, “reaped commercial benefit from what was done before the priority date”.
Prior discussion of secret use by Gyles J in Azuko Pty Ltd v Old Digger Pty Ltd [2001] FCA 1079; (2001) 52 IPR 75 has established that making and stockpiling a patented invention prior to the priority date of the patent, does not constitute secret use of the invention since it does not amount to any de facto extension of the patent term.
This decision by Greenwood J reexamines the nature of the term “secret” in “secret use” and affirms that the term “secretly used” means deliberately concealed which is consistent with the dominant understanding of the term “secret” and the derivative adverb “secretly”. Therefore, to succeed in revocation of a patent on the grounds that it is not a patentable invention by virtue of the patentee secretly using the invention prior to the priority date, each of the following must be satisfied:
- There must be a use of the innovation in the sense that the patentee has derived a commercial benefit by doing something with the invention that produces the benefit
- The use must be use of the invention “as claimed”, taking all the essential features of the claims
- The commercial benefit gained must be an exercise of a de facto monopoly arising out of the patentee’s deliberate concealment of the essential features of the invention
- The concealment must be an act of deliberate concealment.
Therefore, to seek revocation of a patent, it must be precisely particularised in the pleadings as to the commercial benefit obtained by the patentee by using the invention in secret prior to the filing date of the patent application.
In the present application, Mickala argued that the placement of the advertisement, coupled with the stated object of bringing about sales, was, in fact, the equivalent of a sale (despite that no actual sales were alleged to have been made) prior to the priority date and thus constituted secret use of the invention.
SCM’s position in response to the advertisement is understood to be that the advertisement does not disclose “all the inner workings of the machine” such as whether the alternator of the Lighting Tower is a low voltage alternator; whether the low voltage alternator has a voltage output of less than 50V; whether such an alternator is connected directly to a shaft of the engine; and other such matters.
SCM also mused that, as affirmed by Azuko, since making a patented article prior to the priority date was not an extension of the patent term, it was difficult to see how placing an advertisement in relation to the invention could be regarded as having “secretly used” the invention.
In reply, Mickala argued that, to the extent SCM has not disclosed such integers (or others) of the claims, then SCM has kept aspects of the invention “secret” within the understanding of the term “secretly used” in s ection18(1A)(d) in the patent area before the priority date in relation to innovation patents, and therefore the patent ought to be revoked.
Commercial Benefit?
Greenwood J discusses at [114] that the commercial benefit which could possibly be obtained by SCM was that sales would be able to be made after the priority date (it was not suggested that SCM made sales before the priority date) sooner than it would have made those sales, had the advertisements been placed on or after the priority date.
However, Mickala did not present that argument in their pleadings or oral submissions and, also, did not make any pleadings as the commercial benefit obtained by SCM from the advertisement prior to the priority date of the patent.
Was There Prior Secret Use?
Without any arguments being presented by Mickala of the actual commercial benefit obtained by SCM from the advertisement, nor any submissions that withholding the details of the essential features of the invention from the advertisement equated to deliberate concealment by SCM, Mickala’s pleadings as to prior secret use of the invention by virtue of the advertisement were ultimately rejected and the application to amend the revocation pleadings were refused.
Greenwood J left open the possibility for Mickala to revert to the court with revised pleadings directed to Greenwood J’s observations in the judgement including that
“using an invention as claimed, before the priority date, so as to obtain or extract a commercial benefit from the exercise of a de facto monopoly (as those concepts are understood according to the authorities), might be capable of being pleaded where a step was taken engaging a public act, but where concealment of essential features from that public act also occurred”.
Therefore, in summary, when submitting arguments that a patent is susceptible to revocation by virtue of being secretly used prior to the priority date, it is essential to:
- identify that the actual commercial benefit obtained by the patentee rises to the level of an extension of the patent monopoly
- that the prior use was use of the invention “as claimed”, taking all the essential features of the claims
- establish that the prior use of the invention was kept secret by deliberate concealment of the use by the patentee.
Prior secret use of an invention is neatly summed up by Lord Diplock’s discussion in [Bristol‑Myers Co v Beecham Group Ltd [1974] AC 646] of this matter, discussed by Greenwood J here at [70] & affirmed at [83], being where the inventor has reaped a commercial benefit from a de facto monopoly owing to his or her concealment of the essential features of the invention … “Concealment gives rise to the de facto monopoly which enables the commercial benefit to be extracted or reaped: Greenwood J at [83].
Please contact Wrays should you have any questions regarding the operation of secret use as a ground of patent revocation in Australia.