Nicholas Kiwi (Pacific) Pty Ltd v. Hospex (Australia) Pty Ltd [1985] FCA 514

CATCHWORDS

Trade Practices - misleading or deceptive conduct - associated

claim for passing off - rival manufacturers of absorbent incontinence blankets - whether use of same colour and quilting pattern constitutes similar "get up" - use of distinctive labels ~

purchasers unlikely to be misled or deceived.

Patents - claim alleging infringement of patent - whether respondent's blanket took the integers of the patented invention ~ cross-claim for revocation of patent on grounds that patent too

wide and invention not useful.

Patents Act 1953 ss.40 and 100

Trade Practices Act 1974 s.52

NICHOLAS KIWI (PACIFIC) PTY LTD v HOSPEX (AUST.) PTY LTD

No. VG 40 of 1985

Woodward J. Melbourne 9 October 1985

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY No. VG 40 of 1985

weve eu

GENERAL DIVISION

BETWEEN :

NICHOLAS KIWI (PACIFIC) PTY LTD Applicant and HOSPEX (AUST.) PTY LTD Respondent

MINUTES OF QRDER

COURT: Woodward J.

DATE: 9 October 1985

PLACE: Melbourne

THE COURT ORDERS THAT:

1. That the application and the cross-claim be dismissed.

2. That the applicant pay three-quarters of the

respondent's total costs of the application and

cross-claim.

(NOTE: Settlement and entry of orders is dealt with in 0.36 of

the Federal Court Rules.)

te.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY No. VG 40 of 1985

GENERAL DIVISTON

BETWEEN :

NICHOLAS KIWI (PACIFIC) PITY LTD Applicant and HOSPEX (AUST. ) PTY LTD Respondent

COURT: Woodward J.

DATE: 9 October 1985

PLACE: Melbourne

REASONS FOR JUDGMENT

This case concerns the production of incontinence

blankets - sometimes called incontinence pads, bed protectors or absorbent bed-sheets - by two rival manufacturers. The blankets, which clearly offer great advantages to the estimated 40,000 patients in Australia who are unable to control their passing of urine, and to those who have to care for such patients, have only been developed in recent years. The applicant company, through a related predecessor company, was the first in the field, and it brings this action against the respondent company, claiming infringement of its patent rights, and misleading or deceptive

conduct in breach of s.52 of the Trade Practices Act 1974. The

applicant alleges that, by having manufactured and marketed an

article similar in appearance to its product, the respondent has

misled or deceived potential purchasers, or 1s likely to do so. This claim is also framed as a common law "passing off" action. The respondent has denied all these allegations, and cross-claimed for revocation of the applicant's patent on the grounds, among others, that Claim 1 of the patent is too wide for the alleged

invention and the invention, as claimed, is not useful.

The letters patent for the incontinence blanket were dated 2 February 1977, sealed by the Patent Office on 2 October 1980, and issued to Nicholas Pty Ltd. On 17 December 1984, the patent was assigned to the present applicant, together with any rights of action against the respondent. No question arises from

this assignment and it will be convenient to refer throughout these reasons to 'the applicant' without differentiating between

the two companies.

The blanket, which was given the trade name "Kylie", was described in Claim 1 of the patent as,

"An assembly for the management of incontinence comprising:- at least one layer of non-~absorbent hydrophobic textile material through which urine can freely pass and at least one layer of absorbent hydrophilic textile material behind the said non-absorbent layer or layers to receive and absorb urine passing through the non-absorbent layer or layers, the said absorbent layer being formed of aligned cellulosic staple fibres of at least 0.5 inch length and denier in the range 2 to 7 formed unto a cross laid web and needled to forma felt which will absorb at least 350% by weight of urine based upon its dry weight and will disperse urine laterally by capillarity throughout the felt."

It will be necessary to consider this description in detail later. It 1s sufficient for present purposes to note two points, first,

that the patent refers to "an assembly" without specifying whether

the non-absorbent hydrophobic textile material is in fact attached to absorbent hydrophilic material, and if so, in what manner. In fact the materials are, in both the applicant's and the respondent's products, joined together by a quilting process. This has no relevance to the patent action, but is very relevant to the misleading conduct and passing off claims, because the

quilting pattern is the same in the two products.

The second point to be noted is that no question arises in the patent action about the non-absorbent hydrophobic textile material which is in direct contact with the patient. In the case of the Kylie blanket, a brushed nylon 1s used, while the respondent's 'Hospex' blanket uses a brushed polyester. The only significance of these materials, for present purposes, is that the main selling line of the Kylie product, the deluxe model, is light

blue in colour, and so is the Hospex product.

The applicant manufactures five Kylie products using the

patented assembly. The first, produced between 1978 and early 1985, was a yellow, quilted nylon blanket. In 1982, it began producing the light blue deluxe blanket, which is now superSeding the yellow blanket. Also produced are a light-weight blanket in pink, a chair-pad in blue and a protector device for ambulant patients. Of the blankets, about 70% of sales in recent months

have been of the blue deluxe model. The Senior Product Manager of

the applicant explained in evidence that the 'chicken wire'

quilting pattern on all the blankets was arrived at, after

experimenting with other patterns, because it gave the best

control of differential shrinkage. Light blue was chosen for the

deluxe blanket because "it minimizes wee the staining

characteristics and the visibility of stain".

It is important to note that, in the early stages of production of the yellow Kylie blanket in 1978/79, the contract for its production was given to a company called Mushin & Miller (Vic.) Pty Ltd, which had the necessary equipment to produce it. However, it had trouble in fulfilling its contract, partly for reasons which the company could have avoided and partly for reasons beyond its control. At the end of 1979, it closed down its workshop and arranged with the applicant for the work to go elsewhere. Mushin & Miller was, of course, given written specifications for the production of the blanket. The company now owns half the shares in the respondent company, having purchased them on 18 November 1983. The respondent produced its first

Hospex incontinence blankets in January 1984.

Evidence was given by Mr Watkins, Managing Director of both Hospex and Mushin & Miller, concerning the purchase of the Hospex shares. It seems clear that Hospex was well advanced in the development of its incontinence blanket, using an imported absorbent pad, manufactured for its own purposes by a German firm, which I shall refer to as Freudenberg, at the time of the share purchase. Certainly the Freudenberg material had been tested and

sales possibilities investigated.

Mr Watkins said that the shares in Hospex were purchased

for a commercial reason arising from a chance arrangement between Hospex and Mushin & Miller concerning medical swabs. The fact that Hospex was developing an incontinence blanket similar to the one which Mushin & Miller had made in 1979 for the applicant, and

had begun to test it, was the sheerest coincidence.

At first Mr Watkins said that he had not known of the Hospex interest in the blankets at the time the shares were bought; he had not been shown a sample of the Freudenberg material. Later he shifted his ground and said that he had known of the Hospex tests, and had been shown a sample, but was not particularly interested and had not asked or been told the results of the tests. He said that his initial lack of interest stemmed from the fact that he knew of the applicant's patent; even when he was shown a sample of the Freudenberg material, he "did not display very much interest" because he "could not see how it could possibly do the job", and in any event he was pre-occupied with the sale of the surgical swabs. However, he said, his new business associate, Mr Isaacs, who had been developing the concept of the incontinence blanket for Hospex, was "pushing me to do something with it", and so he took the advice of a patent attorney within twelve days of the purchase of shares. Favourable advice was received and the first blankets were produced within a matter of weeks. The quilting for them was done by the same firm which had been chosen by the applicant to quilt its product in 1978/79. Mr Watkins said the choice was made by Mr Isaacs without

any suggestion from him as to the firm's suitability.

I regret to have to say that I have no confidence in Mr Watkins' evidence about the sequence of events. Apart from his shifting of ground on a vital issue - his knowledge of Hospex work on an incontinence blanket before his company purchased half of the Hospex shares, his account stretches credulity beyond breaking point. Mr Isaacs was obviously very keen on the idea of the incontinence blanket; Mushin & Miller had previously manufactured just such a product; I cannot believe that its possibilities were not discussed in some detail, and the Freudenberg sample carefully examined by Mr Watkins, before the purchase of the Hospex shares was completed. The speed of action after the purchase provides strong confirmation for this view. Mr Isaacs was not called to

give his version of these events.

When the existence of a sample Hospex blanket was first brought to the applicant's attention, early in February 1984, the non-absorbent surface material was coloured navy blue. The applicant purchased one or more samples of it and had tests made before writing to the respondent on 24 May 1984, threatening legal

action for infringement of patent.

It was in June 1984, that the applicant's officers first

saw the respondent's product in a light blue colour. The reason

why no proceedings were issued until November 1984 was not explained. Proceedings were commenced in the Victorian Supreme Court in that month but were not pursued, and the present action was commenced on 28 February 1985. Until today only small quantities of Hospex blankets have been produced - many of them

have been used for testing and only a very small number have been

sold, although advertising material has been prepared. However, the evidence suggests that, if this action 1s not successful, the Hospex blanket may prove to be an effective competitor with the

Kylie blanket.

There are clearly some differences between the two products. So far as the general appearance is concerned, the view of the exposed parts of the Hospex and Kylie blankets, once made up on a bed, is very similar. Even though one has a polyester surface and the other_nylon, they are both of the same colour and both show the same sized 'chicken wire' quilting pattern. The differences in appearance lie, first, in the flaps attached so that the blanket can be tucked in - which differ slightly in colour and in material. Secondly, the Hospex blanket repeats its non-absorbent material on the underside of the blanket, which means it can be used either side up - which the Kylie can not. Thirdly, there is the attachment of distinctive labels on the

respective products.

Turning to the absorbent material used in each case, the agreed differences are that the Kylie material is wholly composed of cellulosic viscose nylon fibres whereas the Hospex/Freudenberg mater1al has some 54% of such fibres, with the balance made up of non-cellulosic polypropylene and polyamide fibres. Secondly, the Kylie material contains a layer of scrim, or lining material, in its centre, which helps to give stability to the absorbent material when the fibres are needle-punched, as described below. There is no other process used to bond the fibres together. The

Hospex/Freudenberg material contains no scrim, but it has been

subjected to heat in order to melt some of the polypropylene fibres and thus encourage a degree of thermal bonding between fibres. The Hospex/Freudenberg material 1s appreciably lighter than the Kylie material and the fibres used are finer, and thus of a lower denier, than the Kylie fibres. The Kylie product has been intensively needle-punched - at a rate of some 3500 punches to the square inch. The Hospex/Freudenberg material, if it has been needle-punched at all (which is disputed), has been punched at a rate of some 600 punches to the square inch. Another matter in dispute concerning the Freudenberg product is whether the fibres used were aligned or randomly laid before a cross-web of such fibres was created by laying them one above the other, at angles to each other, to give the material the necessary depth. The Kylie product uses aligned fibres, whereas i1t is claimed by the

respondent that the Freudenberg fibres are randomly laid.

The reason for the uncertainty is that the Freudenberg company declined, for reasons which can only be speculated upon,

to provide evidence about its manufacturing process; and the evidence of two experts who had closely examined the material

differed sharply on these two issues just referred to - use of

aligned fibres and needling in the Freudenberg product.

This then is the background against which the applicant's claims and the respondent's cross-claim have to be considered. It is convenient to deal first, and jointly, with the

related claims alleging breaches of the Trade Practices Act 1974

and passing off.

A. The Section 52 and Passing Off Claims

One can sympathise with the reaction of the applicant when 1t found a rival product entering the market which was not only very similar in construction to its own patented product, but also so similar in appearance that some people using it thought it must be the applicant's latest product. There was evidence to this effect from a New South Wales hospital to which the Hospex blanket had been sent, unlabelled, for testing. However, this evidence related to an isolated case, which was explained in evidence by the managing director of a company which manufactures and distributes uniforms and linen to hospitals all around Australia. It had asked the respondent for, and been granted, the right to distribute the Hospex blanket, particularly in New South Wales and Queensland. It had offered the blanket to the New South Wales Health Department for testing and had followed its own general custom of supplying test articles without labels, so that those reporting on the product would do so free of any bias for or against particular manufacturers. This isolated instance of confusion having been explained, there is, in my view, no substance in those of the applicant's claims presently being

considered. I say this for a number of reasons.

In the first place, the respondent is anxious to have its blanket succeed in competition with the applicant's Kylie product. The sales of such products are much more akin to wholesale than to retail transactions. Sales of such products are made by tender to government departments, in bulk to large hospitals or hospital suppliers, or in moderate numbers to the

proprietors of nursing homes. Only a very small number of such

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blankets are ever likely to be sold to private citizens. Thus decisions are typically being made by purchasing or procurement officers - no doubt after advice from nursing and laundry staff in appropriate cases - who will be very well aware of the product

they are ordering and of its origins. If the Hospex blanket were thought by users to be a Kylie product, replacement stocks might well be ordered from the applicant and the respondent would be the loser. It seems clear that, in order to compete with the well-established and successful Kylie product, the respondent must at all times stress 1t independence from that product and promote

the Hospex blanket on grounds of price or efficiency or lasting

qualities.

Secondly, it 1s clear that, apart from a few test blankets, which were either produced before labels became available or which bore no labeis at the request of the distributor, all Hospex blankets are clearly and distinctly labelled and have been since before these proceedings were issued. It is true that the label, on a side flap, 1s not evident when the blanket is made up on a bed, but the incontinent occupant of the bed is not likely to be concerned about the make-up of the blanket, or have any say in the purchase of particular brands; and the label will be quite apparent to staff concerned with the Placement and removal of the blanket or with its laundering. For the significance of proper labelling, see Parkdale Custom Built

Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191.

The third relevant point is that both the different colour and texture of the underside of the Hospex blanket, and the differences in the flaps, point away from an intention on the part of the respondent to mislead or deceive, or a tendency for persons handling the blanket, let alone those responsible for purchasing

1t, to be misled or deceived into thinking it to be a Kylie

blanket.

The applicant sought to base this part of its case on the similarity of "get-up" between the two blankets. For this purpose 1t identified the get-up as the light blue colour and chicken-wire pattern of the quilting, which present a similar appearance when the blanket is made up ona bed. It said that these two aspects of manufacture amount to "capricious additions" within the meaning of that definition of ""get-up" propounded by

Fletcher Moulton LJ in J.B. Williams Co. v H. Bronnley & Co. Ltd.

(1909) 26 RPC 765 at 773-4.

Tt may be doubted whether any such factors of appearance in today's highly specialised and analytical marketing world can properly be described as 'capricious'. 'Non-functional' might be a less elegant but more accurate term. However, in the present case, the applicant's own evidence, set out above, indicated that both these factors had a functional basis. The light blue colour was said to be a good choice for not showing stains, and the chicken-wire quilting the best for control of differential shrinkage. Other evidence indicated that light blue, along with white and dark green, is a very commonly used colour in hospitals,

and that chicken-wire quilting gives the smallest commercially-

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available quilting pattern, which adds to the general stability and cohesion of a product, such as an incontinence blanket, which

requires regular laundering.

For these reasons, I am not satisfied that the colour and quilting pattern of the Hospex blanket do constitute the get-up of the product. On the contrary, I find that each has a functional purposes. This, of course, is fatal to this part of the applicant's case; see Parkdale v Puxu (above) at pp.222-3, and

cases and articles there cited.

Before leaving this topic, I should add that the applicant's case is not assisted by the fact that it has, at material times, been producing yellow and pink blankets as well as its light blue deluxe model. The light blue blankets had only been on the market for about two years at the time the Hospex light blue blanket first appeared. I am unable to find that the Kylie blanket had established a reputation based on that colour in the same sense that a reputation was found in pink paraffin or green and black capsules in the respective cases of Shell~Mex &

B.P. Limited v Holmes (1937) 54 RPC 287 and F. Hoffmann LaRoche &

Co A.G. v D.D.S.A. Pharmaceuticals Limited (1972) 89 RPC 1, relied

on by the applicant.

B. The Patent Infringement Claim

Turning now to the question of patent infringement, the correct approach to the issues involved is conveniently set out in

Populin v H.B. Nominees Pty Ltd (1982) 59 FLR 37 at pp.41-3, and

need not be repeated here. It is convenient to determine first

oe

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the nature of the invention which the patent sought to protect. According to counsel for the respondent, the invention lay in using, as the absorbent part of the blanket, a densely-needled and therefore closely consolidated felt which, because it is densely-needled and closely consolidated, is capable of achieving the desired advantages of absorption and retention of liquid and capacity for repeated use. In the submission of the respondent, the dense needling was the most crucial element of the invention. In the first place, the intense barbed needling provided many

thousands of tufts or plugs of fibres which assisted liquid to

penetrate all layers of the blanket, from which capillarity spread it throughout the material. Thus the requirement of effective absorption was met. Secondly, the greater degree of cohesion caused when the needling took tufts of fibres from their usual alignments, horizontal to the surface of the material, and caused them to run normal, or vertically, to that surface, gave the pad a density which assisted retention of liquid - it was less likely to be squeezed out by the weight of the patient. Finally, the same

cohesion and density gave the pad the strength to withstand

regular laundering. Thus the intense needling, of the order of 3500 punches to the square inch, was the feature which would overcome the defects in the prior art, described in the patent specification. These showed that the concept of assemblies using a layer of non-absorbent material and a further layer or layers of absorbent material, was not new; it had been used successfully with disposable absorbent materials. What was new, and was' the central object of the invention, was, in the words of the patent

specification:

"l.. a commercially viable assembly which will absorb and retain a substantial amount of urine without reaching saturation under the pressure normally exerted by the patient's body, will substantially retain its strength and cohesion after wetting, through use or laundering, and will disperse urine evenly through the absorbent material away from the site of initial absorption."

Counsel for the applicant agreed generally with the respondent's formulation of the nature of the invention, but there was one important difference in their submissions. They sought to Play down the significance of the intense needling and focus instead on the resulting degree of consolidation and the

achievement of an appropriate microstructure in the material.

It 1s understandable that the applicant would not wish to be tied to a particular intensity of needling in defining its invention, although it seems that a good deal of experimentation took place before an optimum intensity was arrived at. But, in my view, 1¢ cannot escape from the fact that the only method it used, or suggested in its patent specification, for obtaining its desired degree of consolidation and microstructure was dense needling. As counsel for the applicant said, in their final submission,

"... the inventive step, or the invention, is an

invention that 15 concerned with the application of

needle-punching. There is no dispute between us about that. But what is inventive is that one can needle to produce the degree of consolidation and

microstructure that 1s identified. The preferred

method of doing it, the preferred density of needle~ punching is then given."

In fact, the specification speaks of 1500 to 2000

punches per square inch on each face, especially 1700 (1.e. 3400

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in total). There was evidence, which I accept, that anything over 1000 punches per square inch would generally be regarded as intense punching. Three to four times that intensity must clearly be regarded as very dense needling and, in my view, very dense needling - without necessarily specifying figures - is an integral

and vital part of any fair description of this invention.

I turn now to identify the integers of the patented invention. Counsel for the applicant conceded that, to establish unfringement of its patent, it must show that all essential

integers have been taken; see Populin v H.B. Nominees Pty Ltd

(above). Counsel for the respondent, in his final address, submitted that essential integers of the Kylie blanket not taken

1n the Hospex blanket were:

(1) the absorbent layer is formed of cellulosic fibres; (11) these fibres, which are formed into a cross-laid web,

must be aligned fibres before they are cross-laid; (111i) the fibres must be of a denier between 2 and 7; (iv) the cross-laid web must be needled; and (v) such needling must produce a felt.

Before dealing with these five issues, it is necessary to say something about the two expert witnesses, whose evidence is vital to the resolution of at least two issues. There can be no doubting the professional expertise of either witness. Mr K.L. Floyd, who was called by the applicant, is the Business Manager, Spinning and Non-wovens, at the Shirley Institute in the United Kingdom. The Shirley Institute has a long history of research and development behind it, having been formed in 1919 as the British Cotton Industry Research Association. Mr Floyd explained that needle-punching, or needle felting, had been developed as _ one

non-woven technique in England in the second half of last century;

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had heard of its use by Freudenberg. This past use was confirmed by another witness. Mr Floyd said he had never heard of the commercial use of pinned rollers to produce displacement of fibres such as he had observed in the Freudenberg product. At first he said that he would be pleasantly surprised if this had been

achieved but, when pressed, committed himself to saying that there was "not a hope in hell" that the displacement had been achieved

in this way.

The result of the impressions I have gained of the two witnesses is not that I prefer Dr Hickie's evidence whenever the two are in apparent conflict, but rather that I find it necessary to make allowances, by way of discount, for the emphasis and

confidence of Mr Floyd's opinions on doubtful issues.

Turning then to the first of the essential integers - the use of cellulosic fibres - it was not denied by counsel for the applicant that this was properly identified as an integer. Nor could there be any dispute that, while the fibres in the Kylie absorbent pad were 100% cellulosic, those in the Hospex/ Freudenberg pad were only 54% cellulosic. It was argued for the applicant that all the integer required was that cellulosic fibres should be present to perform the hydrophilic task required of

them. The presence of additional fibres should not take the

respondent's product out of the claim of the patent.

Before dealing with this issue it is convenient to dispose of one minor matter which arose in the course of evidence.

The non-cellulosic fibres in the Freudenberg pad are made up of

polypropylene and polyamide. Polypropylene in its natural state is entirely hydrophobic, or water-repellant, and polyamide 15 almost entirely hydrophobic. However Mr Floyd said in evidence that work had been done in recent years to modify the surface characteristics of fibres such as polypropylene so that they could be made more hydrophilic, or water-attracting - that is, absorbent. There was no evidence either way as to whether the Freudenberg product contained such treated polypropylene. I believe that I should assume, on the balance of probabilities, that this recent development had not been incorporated, and that normal polypropylene was used. The respective cases were

conducted on this basis, while acknowledging the possibility that

the facts could be otherwise.

In my view, the difference in fibres used is significant and is fatal to the applicant's claim of infringement. Nowhere in the history of the development of the Kylie product, nor in the relevant patent applications in Australia or the United States, is there any suggestion that the invention was not bascd upon the use of wholly cellulosic, hydrophilic fibres. The use of almost half hydrophobic fibres is a substantial deviation, and 1t produces a significantly different process of absorption and retention of

liquids.

The cellulosic material in the Kylie bianket, which is actually a viscose rayon, absorbs liquids within its own structure, while at the same time swelling considerably and thus reducing the amount of space between fibres which could be

occupied by liquids. Although the amount of liquid absorbed by

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the fibres 1s not large by comparison with the amount retained between fibres, it is significant. And the hydrophilic properties of the fibres also assist in the forming of films of liquid rather than droplets - this is an important part of the capillary action

which permits liquid to disperse throughout the absorbent

material.

In spite of its use of almost 50% of more or less

hydrophobic fibres, the Hospex blanket proved on testing to absorb and retain more liquid in relation to its weight than the Kylie blanket. Dr Hickie said there were several possible explanations for this. One was the much greater swelling of the Kylie fibres

taking up a great deal of free capillary space. Another was the

use of finer fibres in the Hospex blanket, providing more

capillary surfaces for the same weight of blanket.

Whatever the explanations, one cannot ignore the fact that the Hospex blanket, by using a quite high proportion of non-absorbent or only slightly absorbent fibres in its absorbent pad, actually produces greater absorbency than the Kylie blanket, which uses absorbent fibres exclusively. I find it impossible to

say that the Kylie integer of absorbent fibres has been taken.

The next integer which both parties accepted was that of aligned fibres being formed into a cross-laid web. There is no doubt about the use of a cross-laid web, which is common in the construction of felt-like materials. The issue in dispute is whether the fibres were aligned before they were cross-laid. Dr

Hickie said that he could find in the material no persuasive signs

that the fibres had ever been aligned before being cross-laid. Certainly the surface showed no signs of alignment, and he found any suggestions of parallelism in the body of the material to be

sufficiently explained by the circumstance that in the manufacturing process the cross~laid webs had probably been

compressed from a depth of around two inches to a depth of about one-quarter of an inch. Mr Floyd on the other hand said that although the surface of the material appeared to have been randomly laid, he was quite sure that most of the material had first been aligned. He relied on the evidence of various photographs, as well as his own observations, to prove his point. The photographs did not cause Dr Hickie to doubt his own judgment

on the matter.

This point has caused me considerable difficulty, and I can only say that, having studied both the oral evidence and the photographs with care, If am not persuaded that this integer of aligned fibres has been taken in the Hospex blanket. In reaching this conclusion, I have not relied upon aé_e technical data specification for the Freudenberg pad, which I allowed to be

tendered as evidence pursuant to s.7B of the Evidence Act 1905 (Commonwealth). That specification states that the structure of the non-woven material is "random laid" but, in the absence of any Freudenberg witness to explain what is meant by those words, or at what stage of the process random laying is achieved, I do not feel that I should give it any more weight than to note that the entry

is not inconsistent with my finding.

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The third integer identified by the respondent is the denier or fineness of the fibres (actually the mass in grams of 900 metres of fibre). The patent prescribes a denier of between 2 and 7. The viscose rayon fibres in the Hospex blanket had, when measured by Mr Floyd, mean values of 1.37 and 1.23 denier. It was sought to be argued by the applicant that this integer was not essential in the sense that the figure 2 should not be taken too precisely. Whenever a denier is given it is only an average figure, and tolerances in individual fibres of plus or minus 10% are commercially acceptable. Thus, it was argued, there is no

significant difference between deniers of 1.5 and 2.

I cannot accept this submission. I believe that the intention of the patent was to specify fibres having a fine denier, but not so fine that intensive needling would break too many fibres. The fact that Claim 7 specifies staple fibres having "a denier of about 2.5" shows that fractions of deniers are not to be discounted, and there was other evidence to the same effect. In my view the omission of the finest deniers commercially available at the time of the patent application was deliberate; the maker of the Freudenberg pad has chosen to use fibres of those

very fine deniers and has thus taken itself outside the patent.

The fourth integer, which the parties agree upon, is that the cross-laid web must be needled. By the end of the hearing 1t was not disputed - although there was some doubt at the outset ~ that the reference here is to barbed needles, which pass through the fibres, pick some of them up and force them, a number

at a time, out of alignment, in tufts or plugs which run

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vertically through the material. The only question here, and it is one which I. have found difficult to answer, is whether the Freudenberg pad has in fact been needled. Mr Floyd is emphatic that it has; Dr Hickie appears equally confident that it has not. He says that such displacement as has occurred can be explained by the probable use of pinned rollers to assist in consolidation in the course of the heat-bonding process. As I have already

indicated in discussing the expert evidence as a whole, Mr Floyd

rejects that possibility out of hand.

With some hesitation I find that I prefer the opinion of Dr Hickie on this issue. I do so mainly because Mr Floyd is forced to concede that there is no evidence of needling on the surface of the material, which one would expect to find in the form of a dimpled effect. He was unable to give any explanation for this which I found at all persuasive. Secondly, Dr Hickie was able to delaminate the Freudenberg material into five layers without the use of any implements. He said that he would not have been able to do so if the material had been needle~punched even to

an intensity of only 600 punches to the square inch - there was evidence of pin or needle holes in the Freudenberg product of about that density. Finally, I gained the impression that Mr Floyd had made up his mind that there was evidence of needling at a time when he had not considered the possibility of pinned rollers. He was then not prepared to consider seriously the possibility that he might have been misled in his study of the visual evidence by a failure to take account of that alternative. Without canvassing in detail the photographic evidence relied on

by the respective experts, I can say that there is nothing in it

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which persuades me to prefer Mr Floyd's evidence to Dr Hickie's. I find, while admitting to some residual doubts, that the

Freudenberg material was not punched by barbed needles.

The final integer to be considered is needle-punching to produce a felt. This would, of course, only arise if I were wrong in my finding that no needle~punching occurred at all in the manufacture of the Freudenberg pad. Even if such needling did occur, IT am not satisfied that the result could properly be described as a felt. Mr Floyd said that he calculated at least 600 needle-punch to the square inch in the Freudenberg pad, He described the estimate of 600 as 'conservative'. Dr Hickie would not accept that what he described as pin-holes occurred at an intensity of 600 to the square inch, but he offered no alternative

figure, and so I accept 600 as the appropriate figure to be taken

into account.

Dr Hickie said that, in his experience of the Australian Situation, something in excess of 1000 needle-punches to the square inch were needed before the result would classify as a felt. If needle-punching alone were relied upon, materials such as those under consideration would lack necessary consolidation, dimensional stability and structural cohesion, which were the qualities expected of a felt. Bonded fibre fabrics are not

regarded as felts.

Mr Floyd said that non-wovens still represent a growing industry, which has as yet no common language. I asked him how to

define a felt - "When 1s a felt not a felt?" He replied,

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"I do not think anybody would be brave enough to answer the question directly. The answer is that

in the trade people who use needle-punching machines, which used to be called needle looms, anything they make they would clearly call a felt, whether 1t 1s what we would call open lofty structure or a very dense conventional felt. It is not specific."

It is important to note that Claim 1 concludes with the words "and needled to form a felt which will absorb at least 350% by weight of urine based upon 1ts dry weight and will disperse urine laterally by capillarity through the felt". This states with some precision the absorption requirements of the felt, but says nothing about its retentive qualities, related to its consolidation, or its dimensional stability and structural cohesion, both obviously essential factors if it 1s to stand up to constant laundering and have a commercially acceptable life expectancy. The word "felt" is, in my view, meant to achieve these results in an Australian context, and should be so read. It

means, in effect, 'needied to achieve a consolidated, stable and

cohesive state. '

I accept, on the evidence, that this would require well over 1000 needle-punches to the square inch and it is clear that if the Freudenberg pad was needled at all, it was at an intensity well below 1000 to the square inch. It relied, for its qualities of cohesion and stability, to a considerable degree, upon a

process of thermal bonding not contemplated by the patent.

Thus, for all the reasons just given, I find that there has been no infringement of the patent. The fact that a number of

essential integers of the Kylie patent have not been taken by the

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Hospex/Freudenberg blanket underlines the essential differences between the two absorbent pads in fibres used, method of manufacture and resulting microstructure. While I have expressed some doubts on individual issues, because of the conflict in expert opinion evidence, I have no doubt at all about the conclusion that the Hospex blanket does not infringe the Kylie patent. Thus this part of the applicant's claim fails also and

the application must be dismissed.

Cc. The Cross-Claim

This leaves me with the cross-claim to consider. To a considerable extent this was raised as a shield rather than a sword. It was argued that, if the Hospex blanket were found to infringe the Kylie patent, then the claim made by that patent, expressed in terms of results achieved, must be too wide, and

extend beyond the subject-matter of the invention, because the

Freudenberg pad is so different from the Kylie blanket in its

method of construction. See Montecatini Edison S.p.A. v Eastman Kodak Co. (1971) 45 ALJR 593 at 597. In view of the findings I

have made it is unnecessary to consider this broad argument.

However the respondent has maintained, without pursuing the point very vigorously, that the Kylie patent Claim 11s wider than the invention in any event. There is also a_ subsidiary argument that, if too broad an interpretation is given to the word "felt" in the claim, then, in the absence of any stipulation about

needling intensity, the claim will be bad for lack of utility.

Section 40 of the Patents Act 1952 provides, so far as is relevant,

"40.(1) A complete specification -

(a) shall fully describe the invention, including the best method of performing the invention which is known to the applicant; and

(b) shall end with a claim or claims defining the invention.

(1A) wee (2) The claim or claims shall be clear and

succinct and shall be fairly based on the matter described in the specification.

Section 100 states, again so far as is relevant, "100.(1) A standard patent may be revoked, either wholly or in so far as it relates to any claim of

the complete specification ... on one or more of the following grounds, but on no other ground:

(c) that the complete specification ... does not comply with the requirements of section 40;

(h) that the invention, so far as claimed in any claim of the complete specification ».. is not useful; ... "

The substance of the respondent's argument is that, because the applicant has chosen not to limit its claim toa felt produced by a particular intensity of needle-punching, or a felt which is consolidated to an extent which could be defined in terms of its weight or its thickness, it is possible that the claim includes elements which would not secure the objects of the

invention - which would cover products that could prove not to be useful. As to the scope of this objection to validity, see Blanco

White on Patents for Inventions, 5th Ed, paras 4-401 to 4-403.

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It 1s true that, in securing later patent rights in the USA, the applicant did limit its claim in the first instance by intensity of needle-punching, and later by the weight of the absorbent pad. However I am not satisfied, on the material before me, that the applicant's patent can be successfully challenged on

this ground.

I have already found that the word 'felt', as used in Claim 1, should be given a significant meaning as if the adjective 'consolidated' were attached to it and it were understood that, in the context, relatively intense needling would be required. It may well be that, to achieve the stipulated result of effective absorption throughout the material, and given the other data set out in the claim, dense needling of the order of 3000 - 4000 punches to the square inch would be necessary. In any event, I am satisfied that intense needling would be required to produce the necessary microstructure, and that this would also produce stability and a high degree of consolidation. This is the substance of the applicant's invention and, so far as I am able to judge on the material before me, the object of the invention will be achieved by observing the requirements laid down in Claim 1, when read in the light of the specifications generally.

Accordingly the cross-claim should be dismissed.

So far as costs are concerned, I think that justice would be done if the applicant were to pay three-quarters of the

respondent's total costs of the claim and cross-claim.

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I certify that the twenty-seven (27) preceding pages are a

true and accurate copy of the Reasons for Judgment herein of

The Hon Mr Justice Woodward

CASS ee

Associate

Dated: 9 October 1985

Counsel for the Applicant : Mr K Hayne QC &

Mr R Finkelstein Counsel for the Respondent : Me R Macaw Solicitors for the Applicant : Darvall McCutcheon

Solicitors for the Respondent : Davies & Ryan

Pa)