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December 2020–February 2021

Steel yourself: spilling a patent’s ‘secret sauce’ is a must

The obligation to ‘spill the secret sauce’ and describe an invention in full detail when filing a patent application is fundamental to the ‘Quid pro quo’ of the patent system. In return for making an invention that is potentially beneficial to society, the patentee is given a 20-year monopoly by the Government to commercialise it. At the end of this period, however, others are free to use and improve on the invention, and they should be able to do so because the patentee is supposed to have described everything that needs to be known to perform the invention.

Subsections 40(2)(a) and (aa) of the Patents Act 1990 require that the patent specification ‘disclose the invention in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the relevant art’ and ‘disclose the best method known to the applicant of performing the invention’, respectively.

The sufficiency requirement (s40(2)(a)) means that the patent specification must describe the invention in enough detail for a hypothetical ‘person skilled in the art’ (e.g. an unimaginative chemist, much like myself) to perform anything falling within the scope of the claims, using only the disclosure in the specification and the ‘common general knowledge’, perhaps with some routine trial and experimentation thrown in if needed. The best method requirement (s40(2)(aa)) means that the patent specification must include a complete and full description of the best way to perform the invention known to the inventors at the time the patent application is filed.

These two requirements are closely interrelated and, for some inventions (typically those relating to simple mechanical subject matter), describing the best method can also satisfy the sufficiency requirement. Unfortunately, this is rarely the case for patents relating to chemical subject matter, as chemical reactions can often produce surprises and principles of general applicability are not so easily found. Patents for inventions in the chemical technologies are therefore much larger than patents for mechanical inventions.

The importance of these provisions of the Patents Act was highlighted in a relatively recent court decision. BlueScope sued Seoul-based Dongkuk Steel for infringement of various claims of two patents relating to steel strips coated with an Al–Zn–Si–Mg alloy. Dongkuk manufactures alloy-coated steel strip products, sold by third parties in Australia. Although Bluescope had patents for this technology, the judge deemed all of the relevant patent claims invalid, and they were revoked. What went wrong for BlueScope?

Bluescope Steel Limited v Dongkuk Steel Mill Co., Ltd (No. 2) [2019] FCA 2117

In 2009, BlueScope filed patent applications for methods for coating steel strips with a particular Al–Zn–Si–Mg alloy. The coated steel strips were intended primarily for roofing products, so corrosion resistance was very important. Si is an essential component of the alloy because it apparently prevents excessive alloying between the steel substrate and the molten coating in the hot dip coating, and promotes the formation of an adherent coating. Mg is an essential component of the alloy because it apparently provides an improved protection at cut edges due to it changing the nature of the corrosion products formed. In their marketing material, BlueScope claim that the magnesium improves galvanic protection by ‘activating the aluminium, resulting in a tougher protective coating that’s more resistant to scratches and scuffs encountered during construction’.

A problem with these alloy coatings, however, is that Mg2Si forms during cooling and, if it forms in certain regions of the coating (especially near to the surface), a phenomenon called mottling occurs, which makes the coating aesthetically unappealing. Further, the Mg2Si can also form relatively large particles compared to the coating thickness, which present a corrosion risk.

BlueScope’s invention involved applying the alloy coating on the steel strip in a manner that reduces Mg2Si formation, or at least ensures that that any Mg2Si which does form is not at the surface. In simplified terms, one of the ways the distribution of Mg2Si in the coating could be controlled was to minimise variations in coating thickness. Indeed, the main patent claim defined the invention by this result, where passing the steel strip through the alloy bath results in a coating having a variation in thickness of:

… no more than 40% in any given 5 mm diameter section so that the distribution of Mg2Si particles in the coating microstructure is such that there is only a small proportion of Mg2Si particles or substantially no Mg2Si particles in the surface of the coating.

Given the importance to the invention of minimising coating thickness variations, one might expect that a specific technique or techniques that could be used to keep the variations under control would be described in the specification. However, this was not the case and the specification simply stated:

… the applicant found that short range coating thickness variations could be very high, and special operational measures had to be applied to keep the variations under control. [author emphasis]

In evidence during the trial, BlueScope submitted that four particular operational measures that could be used to control coating thickness variations were known to them at the time the patent application was prepared (in 2009), but that they had not actually tested any of these. Indeed, it took until about 2013 to commercialise this invention, using one of the operational measures known to them in 2009. BlueScope argued that these operational measures were, however, part of the common general knowledge and that there was therefore no need to provide a detailed description in their patent specification.

Dongkuk Steel, of course, disagreed and argued in court that operational measures for controlling coating thickness variations of Zn–Al-based coatings were not part of the common general knowledge. Further, Dongkuk argued that even if operational measures that might achieve this function were known, the use of the word ‘special’ in the patent would confuse a person skilled in the art and they would not have understood ‘special operational measures’ to be referring to known operational measures, let alone the particular operational measures BlueScope knew to be the best method of performing the invention.

Horrific amounts of evidence were produced by both sides, which the judge methodically worked through in his 239-page decision. I can only imagine the cost of this litigation. In the end, the invention was deemed by the court to meet the sufficiency requirement because the judge found that the evidence indicated that a person skilled in the art, using their common general knowledge and the teachings of the specification, would have been able to perform something falling within the scope of the invention.

Unfortunately for BlueScope, however, the court found that the evidence did not establish that some of the operational measures known to BlueScope for controlling coating thickness variations were part of the common general knowledge. Further, even though some of the operational measures were found to be part of the common general knowledge, the court was not persuaded by BlueScope that the person skilled in the art would know which of these operational measures were the best operational measures to perform the invention.

As the judge quite brutally put it:

Notwithstanding that BlueScope knew of the best method of performing the alleged invention as at March 2009, it did not disclose it in the specification as at the date. Rather, it confidentially used the best method commercially from 2013 whilst simultaneously benefiting from the statutory monopoly. In the circumstances, all of the asserted claims of the 257 Patent are invalid.

Thus, referring to ‘special operational measures’ being required to control variations in the coating thickness (and hence the Mg2Si distribution in the coating), but without providing any guidance about such measures, resulted in the BlueScope patent failing the best method requirement. This was found to be the case even though some operational measures that would control coating thickness variations were known in the art. The judge also made the point that this would still be the case even if the expression ‘special operational measures’ had not been used.

The upshot of this court decision was that patent claims which were otherwise valid (the court found them to be novel and inventive) were revoked. So, the moral of this story is that, when preparing a patent application, never give in to the temptation to skimp on any detail. You need to shake the bottle to get the last little bit of secret sauce out, and then leave it upside down for a while, in case there’s some left.

Andrew Jones MRACI CChem is Principal of Foundry Intellectual Property.

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