Ajinomoto

The Full Court has dismissed Ajinomot's appeal from Finkelstein J's finding that its patent for a new artificial sweetener was invalid because it lacked an inventive step.

The main point in the appeal was whether the botched attempt to introduce the diligent searcher via s 7(3) - in the form it stood before the 2001 amendments - meant it was necessary to identify a person skilled in the art in Australia.  It turns out that the short answer was "Yes", but there was in fact such a person ...

Ajinomoto's patent was for an intense sweetner which was a combination of 3 known sweetners.  It sued Nutrasweet for infringing that patent and Nutrasweet counterclaimed for invalidity.

The practical problem that Nutrasweet faced was that there is no industry in Australia developing new artificial sweetners - or, more accurately "the selection, testing and manufacture of blended compounds for use as a sweetening agent does not take place in Australia".  It's all done by large transnational corporations overseas.  

The textual problem that confronted Nutrasweet was that Ajinomoto's patent was granted (OK, formally, its complete specification was lodged) before the amendments to s 7(3) made by the Patents Amendment Act 2001 applied. 

Section 7(2) tells us that a patent is inventive unless it would not be regarded as inventive by a person skilled in the relevant art in light of the common general knowledge or that knowledge when combined with a document or use as permitted by s 7(3).

At the relevant time, s 7(3) provided:

(3) For the purposes of subsection (2), the kinds of information are:

   (a)  prior art information made publicly available in a single document or

        through doing a single act; and

   (b)  prior art information made publicly available in 2 or more related

        documents, or through doing 2 or more related acts, if the

        relationship between the documents or acts is such that a person

        skilled in the relevant art in the patent area would treat them as a

        single source of that information; being information that the skilled

        person mentioned in subsection (2) could, before the priority date of

        the relevant claim, be reasonably expected to have ascertained,

        understood and regarded as relevant to work in the relevant art in the

        patent area.

For present purposes those words "work in the relevant art in the patent area" were deleted after the 2001 amendments (i.e., for complete specifications lodged after 31 March 2002). 

The trial judge had rejected Ajinomoto's argument that there couldn't be any relevant knowledge in Australia (aka "the patent area") if there wasn't a relevant industry here.  Any other result would lead to Australia becoming a resting ground for bad patents.

After testing and teasing the legislative history every which way possible, the Full Court concluded that Ajinomoto was right: pre 1 April 2002 patents cannot be invalidated on the basis of s 7(3) prior art unless there was at "some point" a relevant art in Australia:

119 The expression "relevant to work in the relevant art in [Australia]" should, in our view, be given its ordinary and natural meaning. There is no conflict, when construing this phrase, between a textual approach and a purposive approach. It must be remembered that a purposive approach is not to be equated with an approach that the Court regards as reflecting sound policy. The question is always one of ascertaining the legislative intent. This is done by considering the language and structure of the Act, as well as its objects.

120 In the present case, it may be that the legislature made bad law when it enacted s 7(3) in its original form but that does not entitle the Court, under the guise of a purposive analysis, to distort the ordinary and natural meaning of the language used by introducing a notion conspicuously absent from the text, namely the idea of hypothetical work.

121 There may be some force in NutraSweet’s argument that the territorial limitation came to be excised from s 7(3) by sheer accident when the amendments proposed in the 2001 Bill were not accepted during the course of debate. There are cases where last minute changes to a draft bill have produced peculiar, and unintended, results. This may detract somewhat from the force of Ajinomoto’s reliance upon the Dunmunkle principle.

122 Nonetheless, it must be remembered that the task of a court when construing a statute is not to seek to ascertain the subjective intention of those who voted to enact the Bill. It is rather to discern from the structure, content and text of the statute, including its evident purposes, an objective intention which should be imputed to the legislature. The fact that s 7(3), in its pre-2001 form, may have reflected a parochial, and unwise, approach to the establishment of a prior art base cannot dictate the proper construction of the critical phrase. It is difficult to accept that when the words in question were included in 1990 they were not intended to serve any purpose. It is also difficult to accept that those words were only removed in 2001 because it finally dawned upon the legislature that it had mistakenly included them, for no apparent purpose. Had this been the reason for the deletion of this expression, one would have expected some reference in the extrinsic material to that fact.

In the end, this didn't save Ajinomoto, however.  It turned out that, even though no-one in Australia was engaged in "the selection, testing and manufacture of blended compounds for use as a sweetening agent", it was common practice amoong food technologists and the like actually to blend intense sweetners so that the disadvantages of one were offset by the strengths of another.

This was particularly important as the Full Court appears to have considered at [127] that it would not have been enough to show just that the information was circulating in Australia and even would be referred to by Australians interested in the area in closely related areas.

Ajinomoto also had a go at arguing no-one would have regarded the relevant piece of prior art as relevant because there were lots of other potentially relevant prior art documents.  This was rejected on the facts.

If you think that the amendments to s 7(3) made in 2001 fixed the problem (a) have a look at [105] and (b) bear in mind that (i) there are an awful lot of patents that are governed by the "old" form of s 7(3) and (ii) the amendments came into force on April Fools day.

Finally, the Full Court has yet to decide whether the primary judge rightly rejected Ajinomoto's application to amend its patent after trial.

Ajinomoto Co Inc v NutraSweet Australia Pty Ltd [2008] FCAFC 34.