Infringer Violates Parking Infringement Patent, Gets Ticket, No Excuse

by FPA Patent Attorneys

Vehicle Monitoring Systems Pty Limited v Sarb Management Group Pty Ltd (trading as Database Consultants Australia) (No 2) [2013] FCA 395 (3 May 2013)

A recent decision of the Federal Court of Australia concerning an innovation patent does not make any surprising new law, finding infringement and contributory infringement of the claims and upholding the claims as valid. The case however, does contain a few gems, reminding us of the nuances of fair basis and innovative step set down in earlier important judgements.  And for those more academically minded, a tricky issue is raised concerning the overlap of the contributory infringement provisions and the defence of prior user.

The claimed invention

The invention relates to parking violations, particularly the detection of vehicles that overstay a defined time interval in parking spaces.  The claims include a number of apparatus claims, at least some of which were held infringed by the respondent (SMG) by supplying a product falling within the scope of the claims.  The claims also include method claims for identifying overstay of a vehicle in a parking space.  SMG was held not to directly infringe these claims as it did not carry out the method.  However, Yates J held there was contributory infringement by operation of Section 117 of the Patents Act (the Act) because other persons used the product in an infringing way in accordance with instructions and inducements given to them by SMG or contained in advertisements published by or with SMG’s authority.

The Defence under Section 119

Interestingly, SMG claimed the defence provided by Section 119 of the Act.  This section exempts from infringement persons who were exploiting the patent or had taken definite steps to do so immediately before the priority date.  (This section could only be successfully invoked by SMG if SMG was successful in challenging the priority date of the patent, which it was not.)

Overlap of prior user defence and contributory infringement

One of the most interesting issues of the case, the overlap between the prior user defence of section 119 and the contributory infringement provisions of S117, Yates J temptingly revealed and then declined to answer. Yates J said that the defence under Section 119 is limited to the alleged infringer’s own actions of exploitation and does not cover the act of authorising another person to exploit the invention.  In this scenario, he left open the question of whether SMG would still be liable for contributory infringement under Section 117 for supplying a product to another person who carries out the infringement, even where the defence of Section 119 applies to the other person carrying out the method.

I must say that the legislation leaves us rather confused on this point. The contributory infringement provisions of Section 117 require the user of the product to infringe the patent thereby making the supplier liable for infringement. So, in the case of the user being a prior user under Section 119, is the user infringing or not? On the one hand, Section 119 expressly indicates that a person exempted under Section 119 does so “without infringing a patent”. So far so good for the supplier. If the user is not infringing by virtue of Section 119, then arguably the supplier is not caught under Section 117. I would like to say that that is the end of the story.

However, Section 119 continues to state that the person (i.e. the user) may do an act “that would infringe the patent apart from this subsection”. Section 119 acknowledges the concept of infringement but also states that this is not infringement where certain prior user criteria are fulfilled. We are therefore left in doubt as to which version of infringement is to be ascribed to Section 117. No wonder Yates J declined to address the issue.

Fair Basis

The innovation patent was filed by way of a divisional application from a parent application which itself was a divisional application of an earlier application (the grandparent).  The claims of the innovation patent no longer included features which had been included in the claims of the parent or the grandparent application.  Therefore, SMG alleged that the claims lacked fair basis, thereby depriving the innovation patent of its earliest priority date.  SMG failed in its attack.

Yates J reminds us of the principles set out in Leonardis v Sartas No 1 Pty Ltd (1996) 67 FCR 126.  In that case, the Full Court explained the difference between fair basis required for a priority document and a divisional application as compared with the requirement for internal fair basis i.e. the requirement for claims to be fairly based on its own specification.  Based on statutory interpretation, the Full Court in Sartas said that fair basis on a priority document or on a parent application in the case of a divisional application need not relate to all the matters disclosed in the earlier documents.

Thus, in the present case, the omission of features claimed in the parent and the grandparent from the claims in the divisional application for the innovation patent did not deprive the claims of the innovation patent of fair basis.

Innovative Step

The decision also reminds us of the very low threshold of innovative step set out in Dura-Post (Aust) Pty Ltd v Delnorth Pty Ltd [2009] FCAFC 81.

We are reminded about the difference between inventive step and innovative step, particularly with regard to the role of common general knowledge.  When considering inventive step, if the difference between the claimed invention and the prior art can be found in the common general knowledge then there is a strong argument that the claim lacks inventive step.  Not so with innovative step.  In the case of an innovation patent, Yates J said that it is of no significance that the claimed feature or features that distinguish the invention over the prior art represents an obvious deployment of common general knowledge.  All that is required for innovative step is that the feature or features make a substantial contribution to the working of the invention.

Using a real example from the case, the Tetsuya document was considered close prior art.  Tetsuya was concerned with vehicles that are stationary in areas where parking is prohibited, not time-limited.  In that context, a count is commenced once the stationary vehicle is detected.  When the count reaches a predetermined limit, this fact is registered and sent from the count management means to the wireless communication means, which then relays this fact to a base station.  Yates J accepted that the invention as claimed to determining vehicle overstay in a parking space of defined time duration, rather than to identifying illegal parking in a prohibited parking area, makes no substantial contribution to the working of the invention.  However, the claimed inventions operate by a processor that processes data from the sensor, which it stores and then analyses to determine whether overstay has occurred in a parking space of defined time duration.  Yates J said that the claimed processor functions provided flexibility, such as taking into account different parking restrictions for different days of the week and different times of the day.  In contrast, the device of Tetsuya provided only simple count management and not the claimed processor functions.  These claimed processor functions were considered to make a significant contribution to the working of the invention.

One might consider that a processor instead of a counter might be an easy substitution for a person skilled in the art equipped with the common general knowledge of counters and processors. The case serves as another reminder that you must forget what you know about obviousness and inventive step when considering innovative step. The only thing that matters is whether the difference makes a substantial contribution to the working of the invention. The threshold of innovative step is indeed very low.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© FPA Patent Attorneys | Attorney Advertising

Written by:

FPA Patent Attorneys

FPA Patent Attorneys on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.