Secret Use and "Trial and Experiment"

/ Martin Pannall / Articles

Many people are aware that for an invention to be patentable, the invention must not have been publicly disclosed prior to filing a patent application for the invention (i.e. must be “novel”). Public disclosure of the invention as claimed in a patent application may prevent grant of the patent application, or may later invalidate an Australian patent granted for the invention.

Less well-known, is the fact that “use” of the invention, even if under confidential terms (or “in secret”), can, in some cases, equally invalidate a patent granted for the invention, if that use was made before the earliest priority date of the patent1.

The philosophy behind the secret use provisions is to prevent a patentee from obtaining a “de-facto extension” of term of the patent, beyond the normal 20 year term2 (or 8 years for an Innovation Patent). The classic example of this is in the case where a company makes and sells a product that is manufactured using a secret manufacturing process and then some years later, seeks to obtain patent protection for the process to obtain a 20-year monopoly, thus having effectively had over 20 years of protection. Under the normal “novelty” requirements, because the process was never made public (i.e. had been kept secret), the invention is novel at the time of filing a patent application and would, but for the secret use provisions, mean that a valid patent may be able to be obtained.

Section 9 of the Australian Patents Act 1990 sets out the provision of Secret Use, and in particular, sets out what is not to be taken as secret use, as paraphrased below:

(a)  use of the invention for the purpose of reasonable trial or experiment only;

(b)  any use of the invention occurring solely in the course of a confidential disclosure of the invention

(c)  any other use of the invention for any purpose other than the purpose of trade or commerce;

(d)  any use of the invention by or on behalf of the Commonwealth, a State, or a Territory where the patentee or nominated person, has disclosed the invention, to the Commonwealth, State or Territory.

Thus, it can be seen that a number of factors will exclude use as “secret use” for the purposes of considering the validity of a patent. One of these factors is whether the “use“ was for “reasonable trial and experiment” (subsection 9(a)), rather than for the main purpose of gaining commercial benefit..

In a recent Federal Court Decision, SNF (Australia) Pty Limited v BASF Australia Ltd2, this concept of what is “reasonable trial and experiment” was considered. In this case, SNF (Australia) Pty Limited (SNF) attacked the validity of Australian Patent App Nos. 2004203785 and 2013204568   entitled “Treatment of Aqueous Suspensions”, and directed to a process of treating a material, claiming that they were invalid because Ciba Specialty Chemicals Water Treatments Limited (Ciba), the previous owner of the patent applications, had secretly used the claimed inventions on a number of field sites prior to filing any patent application.

SNF contended that Ciba had (among other things), used the claimed invention at 3 mines between Dec 2002 and the priority date (2003); sold 29 tonnes of flocculent for a value of $93,915 for use in the claimed invention before the priority date; and sold or licensed equipment for use in the claimed invention before the priority date and derived at least $50,000 from that use.

SNF argued that these examples of use clearly provided Ciba with a commercial advantage and was thus not solely for “reasonable trial and experiment”.

BASF Australia Ltd (BASF) countered that the use was for reasonable trial and experiment because (among other things); the trial team at Ciba were involved in the use at all times and the results of the trials were discussed at monthly meetings; the work was undertaken to support patent applications and further data collection; secrecy agreement was in place, which is only really used when trialling an invention; both CRL (the owner of the sites and for whom the invention was being trialled) and Ciba made R&D tax claims for the work; the nature of the invention required testing in the field – not just in the laboratory; and that at no point during the trial work did CRL accept the technology to be proven, even well into 2003 (and well after the earliest priority date of the patent applications of 7 May 2003).

In deciding whether the use was for “reasonable trial and experiment”, despite the fact that some monies were charged during the trials, Justice Beech noted the following considerations:

First, the relevant enquiry is whether the true purpose of the use was reasonable trial or experiment. If the true purpose of the use is found to be for trial or experimentation, the fact that there may be some commercial benefit to the patentee will not constitute invalidating prior use.

Second, the assessment of whether a series of activities can be characterised as trials or experiments must be made in light of the nature of the invention to be claimed and the tasks and conditions for which it was designed.

Third, to constitute reasonable trial or experiment there must be some intention to use the invention to be claimed with a view to its development or validation including proof of concept.

Fourth, it may be significant that no remuneration was received for any of the trials. To receive remuneration may point away from reasonable trial or experiment; and

Fifth, it may be significant that although there have been negotiations for the supply and manufacture of the invention, the negotiations were not concluded until after the priority date. If they have been concluded beforehand, that may support an invalidating secret use.

Taking all considerations and facts into account the use by Ciba was held to be for reasonable trial and experiment and thus not to be secret use for the purposes of invalidating a patent.

Thus, when considering whether use is made of the invention in secret, and even in cases where monies were charged or other commercial events took place, that use may be excluded from secret commercial use if it falls under one of the exemptions of Section 9, including “reasonable trial and experiment”, and thus the specific details of the use must be sought and considered.

It is also worth noting that under the current patent law, which was not applicable in this case, any use which would otherwise be considered to be “secret use”, and thus potentially invalidating, is to be disregarded if a Complete patent application is filed within 12 months of the first of that use3.

  1. Paragraph 18(1)(d) of the Patents Act 1990 states that an invention is patentable if (among other things), the invention “(d)  was not secretly used in the patent area before the priority date of that claim by, or on behalf of, or with the authority of, the patentee or nominated person or the patentee’s or nominated person’s predecessor in title to the invention.”
  2. SNF (Australia) Pty Limited v BASF Australia Ltd [2019] FCA 425 (20 march 2019)
  3. Section 9(e) Australian Patents Act 1990