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[2019] ZASCA 115
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Sandvik Intellectual Property AB v Outokumpu OYJ and Another (879/2018) [2019] ZASCA 115; 2020 (4) SA 441 (SCA); 2019 BIP 15 (SCA) (18 September 2019)
Links to summary
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case no: 879/2018
In
the matter between:
SANDVIK
INTELLECTUAL PROPERTY
AB APPELLANT
and
OUTOKUMPU
OYJ FIRST
RESPONDENT
OUTOTEC
OYJ SECOND
RESPONDENT
Neutral
citation:
Sandvik v Outokumpu OYJ &
another
(879/2018)
[2019] ZASCA 115
(18
September 2019)
Coram:
Navsa, Tshiqi, Swain, Molemela and
Plasket JJA
Heard:
30 August 2019
Delivered:
18 September 2019
Summary:
Patents – application for
revocation of patent – invention obvious to a person skilled in
the art and thus not involving
an inventive step in terms of
ss 25(1)
and (10) of the
Patents Act 57 of 1978
.
ORDER
On
appeal from
:
Court
of the Commissioner of Patents, Pretoria (Makgoka J sitting as court
of first instance):
(a) The appeal is upheld with costs.
(b) The judgment in the court below is
set aside and substituted as follows:
‘
1
South African Patent No. 2002/58267 is revoked.
2
The applicant is granted the costs of revocation, including the costs
relating to the respondent’s application for the joinder
of the
second respondent in the application for revocation.’
JUDGMENT
Navsa
JA (Tshiqi, Swain, Molemela and Plasket JJA concurring):
[1]
In this appeal the question for consideration is whether the
appellant’s application in the Court of the Commissioner
of
Patents (Makgoka J), for the revocation of South African Patent
2002/5826 (the patent), entitled ‘Belt for the thermal
treatment of a continuously operated material bed’, was
correctly refused. The appeal is before us with the leave of that
court. The patent involves a belt used in a continuously operated
conveyor-type thermal treatment of a material bed in a sintering
process. Before us, an attack on novelty having been abandoned, the
challenge in the appellant’s heads of argument to the
patent
was based on: (a) claims 1 to 9 of the complete specification not
being clear; or (b) not being fairly based on the matter
disclosed in
the application; and (c) the invention not involving an inventive
step. As will become apparent, claim 1 of the patent
was the focus of
this appeal.
[2]
The thermal treatment referred to in the patent is a sintering
process. Sintering is defined, inter alia, as follows:
‘
Sintering
consists in mixing metal powders having different melting-points, and
then heating the mixture to a temperature approximately
the lowest
m.p. of any metal included.’
[1]
‘
Sinter’
is defined in the
Concise Oxford English Dictionary
12ed
(2011), inter alia, as follows:
‘
[S]olid
material which has been sintered – coalesce form powder into
solid by heating (and usually also by compression).’
The
pictorial depiction of a sintering plant set out hereafter will
facilitate an understanding of the issues in this case:
[See
PDF for image]
[2]
The
belt in question is envisaged for use on a conveyor system
illustrated above.
[3]
The appellant, Sandvik Intellectual AB (Sandvik), is a Swedish
Corporation, with limited liability, with its headquarters in
Sandviken, Sweden. The patentee is Outukumpu OYJ (OT), the first
respondent, a company with limited liability, incorporated in
Finland, with its headquarters at Riihitontutie, Finland. The patent
was later assigned to the second respondent, Outotec OYJ,
also a
Finnish company. The detailed background is set out hereafter.
[4]
OT lodged a Patent Cooperation Treaty (PCT) patent application on 24
January 2001, claiming priority from a Finnish patent application
filed on 31 January 2000. The initial patent application included
nine claims. It had only one independent claim, namely claim
1. An
initial search report, which is part of a PCT application process,
revealed material prior art, which were ‘of particular
relevance’. It went on to state: ‘the claimed invention
cannot be considered novel or cannot be considered to involve
an
inventive step’. On 20 March 2002 OT lodged an amended set of 8
claims. The amended PCT application contained only one
independent
claim, claim 1. It is this claim that is at the centre of the present
dispute. A comparison between the initial claim
1 and the amended
claim 1 is shown below, with the underlined wording reflecting the
amended wording and the wording that is struck
through reflecting
that which was deleted by way of the amendment.
‘
A
conveyor belt for a continuously operated conveyor-type thermal
treatment, i.e. sintering, of a material bed, said conveyor belt
being provided with perforations in order to allow the gasses that
are used for heating and possibly cooling the material bed to
flow
through the material bed and the conveyor belt,
and
said conveyor being based on elements connected to each other
,
characterised in that the conveyor belt is made of a perforated, at
least one-part element
(1,
11, 21)
made of
a metal piece and allowing the gas to flow through,
said
element being mechanically connected to the preceding and successive
element (1, 11, 21) in the proceeding direction (5, 15,
28) of the
conveyor belt by means of a junction made in the lateral direction of
the conveyor belt,
and that the perforations
(2,
13, 14, 26, 27)
are arranged in zones alternating with perforation-free element
parts,
and that the
area of the perforations is about 20 – 60% of the total area of
the conveyor belt.
’
A
PCT examination report regarded the amended claims as novel, but
obvious, and in that regard it referred to prior art.
[5]
OT lodged a Brazilian patent application in terms of the PCT
nationalisation phase, once again claiming priority from the Finnish
patent application. This resulted in Brazilian Patent No. PI
0107924-7. OT, similarly, lodged a South African patent application,
in terms of the PCT nationalisation phase, claiming priority from the
Finnish patent. The South African patent application incorporated
the
amended PCT claims set out in the preceding paragraph with a ninth
claim added in the form of an omnibus claim. As stated earlier,
it is
the amended claim 1 that is the focus of this appeal.
[6]
The integers of claim 1 are as follows:
A.
A
conveyor belt
for a continuously operated
conveyor-type thermal treatment, i.e. sintering, of a material bed,
B. said conveyor belt being provided
with perforations in order to allow the gasses that are used for
heating and possibly cooling
the material bed to flow through the
material bed and the conveyor belt, and
C. said conveyor being based on
elements connected to each other, characterised in that
D. the conveyor belt is made of a
perforated, at least one-part element made of a metal piece allowing
the gas to flow through,
and
E. that the perforations are arranged
in zones alternating with perforation-free element parts, and
F. that the area of
the perforations is about 20 – 60% of the total area of the
conveyor belt.
[7]
The application for the
revocation of the patent was filed on 6 May 2013. The application was
brought on the basis that the invention
as claimed was not new,
lacked clarity, lacked a fair basis and did not involve an inventive
step ‘as required in terms of
s 25(1) of the Patents Act 57 of
1978 (the Act), read with subsection (6) & (10),
[3]
in that the inventions were obvious to a person skilled in the art,
having regard to all matter which formed, immediately before
the
priority date of the inventions, part of the state of the art by
virtue only of subsection (6)’. This appeal turns on
the
last-mentioned ground, namely, lack of an inventive step.
[8]
OT opposed the application for revocation. In respect of lack of
clarity, it took the view that the integers when viewed individually
and collectively can clearly be understood and that, in essence, what
was envisaged was that the conveyor belt is made up of elements
connected to each other, constituted by perforated zones alternating
with non-perforated zones. OT denied that there was lack of
a fair
basis. In respect of lack of novelty, OT was adamant that the prior
art, properly construed, did not disclose all the integers
of claim
1. In relation to Sandvik’s assertion of lack of an inventive
step, OT said the following:
‘
[I]t
is submitted that the inventive step in the conveyor belt of the
invention is that the conveyor belt is made of perforated,
at least
one-part elements formed from a metal piece, having perforations on
each at least one-part element which are specifically
arranged in
zones which alternate with perforation-free zones on the at least
one-part element, and with the area of the perforations
being about
20 – 60% of the total area of the conveyor belt.’
[9]
Sandvik cited matter that formed part of the prior art
immediately before the priority date of 31 January 2000. The prior
matter
was admitted by OT. The following constituted Sandvik’s
list:
‘
a.
DE 2742100 A1 (Polysius AG), 29 March 1979, figures 2a and 5;
b.
US 3735858 A (Walter J. Hartwig), 29 May 1973, column 7, lines 23 to
29;
c.
US 4316718 A (Roland Drugge), 23 February 1982, figures 2 and 4, and
claim 1;
d.
US 3756380 A (Ronald Tunstall Ackroyed et al), 4 September 1973,
figures 1, 3 and 10; and
e.
US 4024610 A (Reinhard Korting), 31 May 1977, column 1, line 68, to
column 2, line 3, figure 1, and claim 13.’
However,
OT denied that the prior art supported Sandvik’s claim for
revocation.
[10]
For a better appreciation of the issues and the findings of the court
below, it is necessary to have regard to illustrations
of the three
preferred embodiments of the invention in question:
These
figures depict variations of metal elements that are linked together
as part of the complete belt that passes through the
conveyor system.
They are the three preferred embodiments of the invention. Figures 1
and 2 are illustrative of integers D, E and
F in that they show metal
elements having perforations arranged in zones which alternate with
perforations-free zones and with
the area of the perforations being
about 20-60% of the conveyor belt. Figure 3, however, unlike figures
1 and 2, has two perforated
zones alongside each other flanked by two
non-perforated zones.
[11]
In the court below, Makgoka J, took the view that Sandvik had
abandoned ‘reliance on the prior art’ and, consequently,
ignored the prior art in adjudicating whether the invention was new.
The attack by Sandvik on lack of novelty was rejected. Makgoka
J said
the following, at para 27 of his judgment:
‘
The
patent specification makes it clear that the specific total area
occupied by the perforations is an important aspect of the
invention.
To achieve one of the primary advantages of the invention, the patent
teaches that it is the combination of (i) the
specific area occupied
by the perforations; and (ii) the alternating perforation-containing
zones and perforation-free parts of
the element that together allow
the conveyor belt.’
He
went on to hold as follows:
‘
In
the ultimate end, as counsel for the respondents submitted, the
invention of the patent balances the requirements of (i) effective
heat transfer through the belt (which occurs primarily in the central
region of the belt); and (ii) limiting thermal and tensile
stresses
on the belt. Hartwig discloses integers E or F of claim 1. In the
result I conclude that the attack based on novelty should
fail.’
[4]
[12]
Turning, finally, to the question of lack of an inventive step, which
entails dealing with obviousness, the court below had
regard to the
provisions of s 25(10), referred to earlier in this judgment. Makgoka
J considered the approach of this court in
dealing with the question
of obviousness as set out in
Ensign-Bickford (South Africa) (Pty)
Ltd & others v AECI Explosives and Chemicals Ltd
1999 (1) SA
70
(SCA), at 79I-80J:
‘
As
is pointed out in
Roman
Roller CC & another v Speedmark Holdings (Pty) Ltd
[1995] ZASCA 78
;
1996 (1) SA 405
(A) at 413, in order to apply these provisions to a
particular case it is necessary to determine what the art or science
to which
the patent relates is, who the person skilled in the art is
and what the state of the art at the relevant date was. But the
inquiry,
in my view, must then proceed further. After those factors
have been determined, a more structured inquiry must be undertaken. .
. Four steps are identified. They include or restate in part what has
been said above but may be taken to conveniently list the
inquiries
to be made:
(1)
What is the inventive step said to be involved in the patent in suit?
(2)
What was, at the priority date, the state of the art (as statutorily
defined) relevant to that step?
(3)
In what respect does the step go beyond, or differ from, that state
of the art?
(4)
Having regard to such development or differences, would the taking of
this step be obvious to the skilled man?’
[13]
Makgoka J had regard to integers D to F of claim 1 which, it was
contended, identified the inventive step. It bears restating:
‘
[T]he
conveyor belt is made of a perforated, at least one-part element made
of a metal piece and allowing the gas to flow through;
the
perforations are arranged in zones alternating with perforation-free
elements parts; and the area of the perforations is about
20-60 % of
the total area of the conveyor belt.’
[5]
He
went on to consider the prior art. In his view the integers set out
in the preceding paragraph were not to be found in the prior
art and
concluded as follows:
‘
In
sum, the applicant has failed to discharge the onus resting on it to
prove that the patent is invalid on any of the grounds relied
on. The
application accordingly falls to fail. An order should be made in
terms of section 74 of the Act certifying the validity
of the
patent.’
[6]
The
following order was made:
‘
1.
The application for revocation of South African patent number
2002/5826 is dismissed with costs;
2.
Each of the claims of South African patent number 2002/5826 are
certified as being valid in terms of section 74 of the Patent
Act 57
of 1978.’
[7]
It
is against these orders that the present appeal is directed.
[14]
Before us the dispute was narrowed. On behalf of Sandvik, it was
accepted that the appeal should succeed or fail on the basis
of
whether there was a lack of an inventive step. It is clear that the
onus to show that a patent is invalid rests on an applicant
for
revocation and that the onus is discharged on a balance of
probabilities. In this regard, see
Marine
3 Technologies Holdings (Pty) Ltd v Afrigroup Investments (Pty) Ltd &
another
2015 (2) SA 387
(SCA). Thus,
the onus to show that the patent is invalid on the basis of lack of
an inventive step rested on Sandvik.
[15]
In
Ensign-Bickford
this court referred to what it said earlier
in
Power Steel Construction Co (Pty) Ltd v African Batignolles
Construction (Pty) Ltd
1955 (4) SA 215
(a) at 224E-F:
‘
A
claim is a portion of the specification which fulfils a separate and
distinct function. It, and it alone, defines the monopoly;
and the
patentee is under a statutory obligation to state in the claims
clearly and distinctly what is the invention which it desires
to
protect.’
[8]
In
Kirin-Amgen Inc. & others v Hoechst Marion Roussel Limited &
others
[2005] 1 All ER 677
;
[2004] UKHL 46
, the House of Lords
held as follows:
‘
The
best-known statement of the status of the claims in UK law is by Lord
Russel of Killowen in
Electric
and Musical Industries Ltd v Lissen Ltd
(1983) 56 RPC 23
, 39:
“
The
function of the claims is to define clearly and with precision the
monopoly claimed, so that others may know the exact boundaries
of the
area within which they will be trespassers. Their primary object is
to limit, and not to extend, the monopoly. What is not
claimed is
disclaimed. The claims must undoubtedly be read as part of the entire
document, and not as a separate document. Nevertheless,
the forbidden
field must be found in the language of the claims and not
elsewhere.”’
[16]
Counsel on behalf of OT rightly did not seek to place any reliance on
the body of the specification where the object of the
invention was
said to be ‘to eliminate the draw-backs of the prior art’
in that it resulted in economy in manufacturing
costs and enabled the
belt to be replaced in parts. Similarly, reliance was not placed on
that part of the body of the specification
which cites as an
advantage, the transversal or parallel arrangement of the
perforations. Before us, OT was constrained to restrict
the inventive
step to integers D, E and F. In relation thereto, it was submitted
that the inventive step involved alternating the
perforated areas
with the non-perforated areas and that the percentage of the
perforated areas in the range 20-60% was so as to
establish, in the
words of counsel, a ‘sweet spot’ for optimal thermal
treatment.
[17]
In addressing the first three steps referred to in
Ensign-Bickford
,
as set out in para 12 above, it is necessary to have regard to the
evidence presented in the court below. Before doing so, I pause
to
consider the value of expert evidence. In
Schlumberger Logelco Inc
v Coflexip
SA
2003 (1) SA 16
(SCA) this court clarified
the position as follows:
‘
It
is the technical evidence by expert witnesses in respect of the
nature of the step claimed to have been inventive, the state
of the
art as at the priority date relevant to that step and the respect or
respects in which the step goes beyond or differs from
that state of
the art which constitutes the primary evidence. It is clear from a
reading of the
Ensign-Bickford
case, at 81D-83A, that the Court considered the question of
obviousness on that basis. The technical evidence of the witnesses
was considered without any reference to their opinions as to whether
the invention was obvious. Expert witnesses who are either
of the
opinion that the invention is obvious or that it is not obvious would
almost invariably give the primary technical evidence.
In these
circumstances it may sometimes be difficult to avoid them expressing
the conclusion that the step is either obvious or
not obvious, but
that would do no harm so long as it is borne in mind that that
conclusion is immaterial.’
[9]
[18]
The evidence placed before the court below by Sandvik was that of Mr
Anders Bodin who obtained an MSc in Engineering Physics
from Uppsala
University in 1986. From that time until 2001 he gained experience
and knowledge in steel and metallurgy. From 2001
until the time of
the litigation in the court below, he gained extensive experience in
the development of steel belts of the kind
in question.
[19]
In relation to the question of lack of an inventive step, Mr Bodin
had regard to the prior art listed by Sandvik and admitted
by OT.
According to him integers A, B, C and D were all present in the prior
art. Integers E and F, as referred to above, involve
perforated parts
of elements of the belt being arranged in zones alternating with
perforation-free parts, with the extent of the
area of the
perforations being 20-60% of the total area of the conveyor belt. In
Mr Bodin’s view, the prior art encompassed
perforated zones
alternating with non-perforated zones. In relation to the stated
percentages of perforated areas referred to above,
Mr Bodin took the
view that integer F does not recognise any advantage, preference or
importance related to the percentages. That
the range is so broad, in
his view, negated any argument about any advantage or an inventive
step.
[20]
Mr Pekka Santala provided evidence in support of OT’s case. He
obtained a M.Sc. Eng. in 1980 from the Technical University
of
Helsinki, Department of Mining and Metallurgical Technology, Espoo,
Finland. During 1981 and 1982 he developed experience as
a research
engineer in a metallurgical laboratory. Between 1982 and 1985 he was
employed as a metallurgist in process development.
From 1985 to 1989
Mr Santala was employed as a process engineer; and from 1989 to 1991
as a process metallurgist. Mr Santala has
extensive experience in
belt sintering and has been involved in the manufacturing of steel
belts, which are important components
of a steel belt sintering
furnace. He identified the inventive step as those contained in
integers D, E and F. He took the view
that the prior art did not
disclose perforations arranged in zones, alternating with
perforation-free parts. Furthermore, there
was no disclosure of the
area of perforations being 20-60%. Mr Santala, in identifying the
inventive steps of the invention in
question, placed reliance on that
part of the specification referred to above which indicated that the
object of the invention
was to promote economy in manufacturing costs
and to enable replacement of parts of the belt, rather than the
whole. In addition,
he also indicated as an advantage of the
invention that the different configurations of the perforations
promoted optimal thermal-treatment.
As stated earlier, these latter
two grounds, absent as they are from claim 1, were not relied on by
counsel on behalf of OT and
the dispute was restricted to integers D,
E and F.
[21]
I interpose to record that in the court below it was submitted on
behalf of OT that Mr Bodin’s evidence was not admissible
or had
no value because he was not skilled in the art of the patent as he
had no experience of steel belts at the priority date.
This
submission was based on a statement in a judgement of this court,
namely,
Ausplow
v Northpark Trading
[10]
[2011] ZASCA
123
, where Harms AP said the following at para 41:
‘
The
inventor’s (Mr Ryan’s) evidence that the invention solved
the problems set out under the quoted “Background”
was
met by what fairly may be called a bald denial by Mr Steyn
who
was in any event not an agricultural engineer at the effective date
of the patent
.’
The
latter part of the quote was not relevant to the result in that case
and it should not be construed as authority for the proposition
that
an expert properly qualified cannot be of assistance to the court in
the manner contemplated in
Schlumberger
because he or she was not such an expert at the priority date of the
patent. The court below rejected this submission on behalf
of OT.
Counsel on behalf of OT rightly did not, in oral argument before us,
persist in that submission.
[22]
I turn to consider the prior art. In
US Patent 3735858 A
(Walter J. Hartwig), 29 May 1973, the following figure illustrates
one of a number of metal elements which constitute
the belt that
forms part of that invention. As can be seen, it contains
perforations alternating with non-perforated parts of a
metal
element.
The following illustration depicts a
number of linked elements.
The
assertion now not relied on, that the advantage of the elements of
the invention in question is that they can be removed and
replaced
individually rather than the entire belt being replaced was, rightly,
not persisted in.
[23]
In US Patent
4316718 A (Roland Drugge), 23 February 1982, the
following illustration depicts perforated areas in a different
pattern. It does,
however, also show perforated zones alternating
with non-perforated zones.
[24]
Drugge shows a conveyor system including a plurality of mutually
adjacent endless, imperforate belt parts separated by perforated
regions. Furthermore, ‘the perforations in the conveyor are
formed by slots which preferably extend in the transverse direction
of the conveyor, whereby differences in longitudinal expansion of the
perforated regions and of the imperforate belt parts in the
longitudinal direction of the conveyor can be compensated by
spontaneous change of the width of the slots, so that buckling or
other forms of deformation of the imperforate belt parts is at least
substantially avoided, while expansion of the upper conveyor
part in
its cross-direction can be permitted to lead to a certain amount of
sagging of the perforated regions between the supported
imperforate
regions.’ This demonstrates that the width and area can be
adjusted at will and across a range so as, in the
words of counsel,
to locate a ‘sweet spot’.
[25]
The stated 20-60% range of perforations is the only ostensible
distinction in relation to the prior art. Having regard to the
prior
art the stated broad range would have been obvious to a person
skilled in the art. The court below ought to have concluded
that
Sandvik discharged the onus and that the challenge to the patent on
the basis of a lack of an inventive step was well founded.
[26]
The following order is made:
(a) The appeal is upheld with costs.
(b) The judgment in the court below is
set aside and substituted as follows:
‘
1
South African Patent No. 2002/58267 is revoked.
2
The applicant is granted the costs of revocation, including the costs
relating to the respondent’s application for the joinder
of the
second respondent in the application for revocation.’
_________________
M S Navsa
Judge
of Appeal
APPEARANCES:
For
Appellant: A J Bester SC
Instructed
by:
Bouwers
Inc., Hyde Park
Phatsoane
Henney Attorneys, Bloemfontein
For
Respondent: G D Marriott
Instructed
by:
Spoor
& Fisher, Centurion
Matsepes
Inc., Bloemfontein
[1]
See T C Collocott & A B Dobson (eds)
Chambers
Dictionary of Science and Technology
revised
ed (1974) 1076.
[2]
Pressing
and Sintering of Powder Parts,
https://thelibraryofmanufacturing.com/pressing_sintering.html
(accessed 29 August 2019).
[3]
The relevant subsections of s 25 read as follows:
‘
(1) A patent may, subject to
the provision of this section, be granted for any new invention
which involves an inventive step
and which is capable of being used
or applied in trade or industry or agriculture.
. . .
(6) The state of the art shall
comprise all matter (whether a product, a process, information about
either, or anything else)
which has been made available to the
public (whether in the Republic or elsewhere) by written or oral
description, by use or
in any other way.
. . .
(10) Subject to the provisions of
section 39(6), an invention shall be deemed to involve an inventive
step if it is not obvious
to a person skilled in the art, having
regard to any matter which forms, immediately before the priority
date of the invention,
part of the state of the art by virtue only
of subsection (6) (and disregarding subsections (7) and (8)).’
[4]
Para 30.
[5]
Para 38.
[6]
Para 44.
[7]
Para 48.
[8]
In this regard the famous dictum of Lord Russel in
Electrical
Musical Industries v Lissen
56 R.P.C 23
, 39 was being cited.
[9]
Para 34.
[10]
[2011] ZASCA 123
;
[2011] All SA 221
(SCA) at para 41. (Italics my
own.)