The Australian Federal Court hands down its judgement: Caffitaly System Spa V One Collective Group Pty Ltd [2020] FCA 803.
Caffitaly alleged that One Collective’s coffee single-use capsules infringed three of its patents, the 627 Patent, 121 Patent and 388 Patent. A single-use coffee capsule contains coffee granules. The coffee machine pierces the front and rear ends of the capsule, and injects hot water into the capsule through the front end to extract the flavour and aroma in the granules. The hot water passes through a filter, and exits the capsule through the rear end, at which point it is ready for consumption.
627 Patent
The 627 Patent related to capsules with embossed channels formed to direct water through the capsule in order to achieve a uniform distribution of water through the capsule. The parties’ infringement arguments centered on the meaning of an “embossing”. The court considered that an “embossing” is refers to a shape with a bulging or convex appearance. Although One Collective’s capsules included six raised ribs, they were not bulging or convex, such that they did not infringe the 627 Patent.
One Collective also had success with inventive step. Its expert designed a single serve espresso coffee capsule based on his knowledge at the priority date. Although his design including raised shapes to direct water flow, they were not an “embossing”. The court nonetheless found the 627 Patent obvious because, if similar shapes had been created using well-known manufacturing techniques such as pressing, they would have been bulging or convex as required of an embossed shape. The difference between the expert’s capsule and the claims reflected “small differences in detail that are of no importance to the inventive step analysis”. No case authorities were cited to support this approach, which seems to expand the traditional bounds of obviousness.
121 Patent
The capsule of the 121 Patent included a snap-fit groove to secure a filter inside the capsule. The court interpreted this feature as requiring the snap-fit groove to prevent the filter moving both horizontally and vertically. Although One Collective’s capsule included a snap-fit groove, it did not prevent vertical movement in both directions (towards the upper end of the capsule, but not in the opposite direction), and so did not infringe the 121 Patent.
The court also held the 121 Patent obvious based on the 627 Patent. In the 627 Patent, the filter was attached to the capsule via an alternative means. The court rejected Caffitaly’s argument that the skilled addressee had no reason to incorporate a snap-fit groove into the design of the 627 Patent. The skilled addressee would understand that there are different methods of securing the filter, including snap-fit grooves which were well known in the art. Even though the 627 Patent disclosed an alternative means, and the court identified nothing that would motivate the skilled addressee to change that means, they would still be directly led to try other well-known securing means.
388 Patent
The 388 Patent explains that increasing the pressure of the water that passes through the coffee grounds in the capsule allows the water to penetrate micro-pores in the grounds, increasing the extraction of essential oils from the granules and improving the flavour and aroma of the coffee. The 388 Patent achieved that high pressure by incorporating into the capsule a cut in the rear face. The cut is small enough to keep the coffee grounds in but large enough to allow air out of the capsule as water is injected into the capsule. As the pressure in the capsule increased as more water is injected, the distance between the edges of the cut expands, eventually growing large enough to allow the water to escape.
Caffitaly introduced experimental evidence conducted on One Collective’s capsules. Those experiments demonstrated that the slit in the capsules performed in accordance with the claims. However, they were conducted under conditions different to those in Caffitaly’s coffee machine (replicating those conditions was prohibitively expensive). The machine affects the performance of the slit (since it determines the pressure of the injected liquid). Unfortunately for Caffitaly, the court held that it is the performance of the capsules in the coffee machine in which they will be used that is relevant to the 388 Patent. The court did not explain why it was not sufficient for a cut to be capable of performing in accordance with the claims at least under some conditions. That alternative approach is arguably preferable given the claims were product, not method, claims, the claims made no reference to the coffee machine and, on the court’s approach, a capsule may or may not infringe the claims depending upon the machine in which it is used.
The court also found the 388 Patent insufficiently described the invention. The 388 Patent provided no indication of many of the parameters required to work the invention. Due to the number of unknown parameters, the experimental work required to identify them via trial and error went beyond standard or routine work.
Conclusion
Caffitaly has appealed the court’s decision to the Full Federal Court. It will be interesting to see whether the Full Court endorses the approaches on inventive step and claim construction adopted at first instance.