SNE ENGINEERING CO LTD v. HSIN CHONG CONSTRUCTION Co LTD AND ANOTHER

CACV 88/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 88 OF 2014

(ON APPEAL FROM HCA NO. 1466 of 2012)

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JUDGMENT
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Hon Lam VP, Cheung and Kwan JJA:

A. Background

1.  For the construction of the High Speed Railway between Hong Kong and Shenzhen, there were sites in Hong Kong where some pre-existing piles had to be removed.  Some of them were bored piles and some were H-piles.  One of the sites in question was the site for the Nam Cheong Station.  Hsin Chong Construction Company Limited [“Hsin Chong”], the 1^st Defendant in the action below was a contractor engaged by the Mass Transit Railway Corporation to undertake the works for the removal of the piles at Nam Cheong Station site.  SNE Engineering Co Limited [“SNE”], the Plaintiff, was the sub-contractor engaged by Hsin Chong.

2.  Hsin Chong awarded the sub-contracts to SNE as the latter had demonstrated a method for removal of piles which had not been used in Hong Kong, but according to Hsin Chong’s case, SNE’s representatives had described as widely used in Japan.  The sub-contracts were signed on 11 March 2011 though works had actually been commenced earlier in September 2010 (in respect of bored pile extraction works) and November 2010 (in respect of H-pile extraction works).

3.  For the execution of the pile removal works, SNE engaged Chim Kee Machinery Company Limited [“Chim Kee”], the 2^nd Defendant, to supply machinery and operators of some such machinery since September 2010.  The relevant machinery included cranes, crawlers and rotators and Chim Kee provided operators for cranes and crawlers only.

4.  The pile removal works did not progress at the rate anticipated by the parties and due to that, Hsin Chong had to consider the termination of the sub-contracts in around June or July 2011[1]. The sub-contracts were actually terminated in September 2012 though Hsin Chong had taken over the majority of the site since end of July 2012.

5.  The present case is not about liabilities under the sub-contracts and this court is not concerned with the adjudication of the merits on the termination.  Instead, the claims by SNE in this appeal (and in the court below) were based on the infringement of a short-term patent HK1150416 [“the Patent”] which it had obtained in Hong Kong for the pile removal method.  It obtained such registration on 23 December 2011 based on its application made on 4 August 2011.  Thus, the term of the patent was to run for a period of 8 years starting from 4 August 2011.

6.  SNE’s case was that after the termination of the sub-contracts Hsin Chong used the patented method to continue with the works at the site without its permission and Chim Kee (engaged by Hsin Chong to supply the same machinery and operators as before) participated in such infringement.

7.  The action was commenced on 17 August 2012 (before the actual termination of the sub-contracts).  Directions for speedy trial were given.  The trial took place before Deputy High Court Judge Lok (as he then was) [“the Judge”] in September and October 2013.  It lasted for 20 days.  Further written submissions were filed after the court had heard the closing submissions of the parties.

8.  On 26 March 2014, the Judge handed down his judgment [“the Main Judgment”; reported in [2014] 2 HKLRD 822] dismissing the claims of SNE.  This is the appeal from that judgment.

9.  The Judge also ordered costs against SNE and SNE had applied to vary the same.  By his Decision handed down on 23 June 2015 [“the Costs Judgment”], the Judge rejected SNE’s application.  Without the leave of this court, SNE filed a Second Supplemental Notice of Appeal on 8 July 2015 (which was the second day of the hearing of this appeal, which commenced on 7 July) seeking to appeal against the Costs Judgment.  Notwithstanding such irregularity, after reading the notice, this court decided to deal with that notice at the hearing and we heard submissions on the same on 14 July 2015 (with skeleton submissions filed beforehand as directed by us).

B. The Patent

10.  Instead of making an application for a standard patent, SNE applied for and obtained the grant of a short-term patent under Part XV of the Patents Ordinance Cap 514.  The application was supported by a Search Report prepared by the State Intellectual Property Office of the People’s Republic of China, a prescribed searching authority.  

11.  The Claims in the Patent were drafted in Chinese as follows:

「 權利要求書

１、一種提取樁的施工方法，其特徵在於，將樁從上部依次分節切斷並提取該節樁體，具體包括以下步驟：

a、 沉入鋼套管：將鋼套管（5）沉至地下，使鋼套管（5）內含樁（3）的頂部一節或者使鋼套管（5）內含樁（3）的頂部一節的一部分，挖掘鋼套管（5）內的土壤；

b、 圓形楔楔入：用圓形楔（2）楔入樁（3）和鋼套管（5）之間；

c、 切斷樁：驅動圓形楔（2）運動，在樁（3）的兩節之間的預計斷點（4）附近切斷樁（3）；

d、 拔樁：對切斷的樁（3）進行提取;

e、 回填：回填拔取樁（3）之後留下的洞。

2、 根據權利要求1所述的一種提取樁的施工方法，其特徵在於，所述步驟a分為以下子步驟：

(a1) 對待拔的樁（3）進行定位，定位後在其上方的地面上以地平線為主水平基準安裝旋轉裝置（1）和起重機；

(a2) 將鋼套管（5）竪向沉至地下，使鋼套管（5）內含樁（3）的頂部一節或者使鋼套管（5）內含樁（3）的頂部一節的一部分；

(a3) 運用旋轉裝置（1）及其上安裝的抓斗挖掘樁（3）與鋼套管（5）之間的土壤，讓樁（3）的頂部一節或者頂部一節的一部分露出，鋼套管（5）的內部需要留下土壤，從而防止附近的土地沉降。

3、 根據權利要求1所述的一種提取樁的施工方法，其特徵在於，所述步驟b具體為：

將抓斗更換為圓形楔（2），通過旋轉裝置（1）將圓形楔（2）放置在鋼套管（5）與樁（3）的頂部之間。

4、 根據權利要求1所述的一種提取樁的施工方法，其特徵在於，所述步驟c具體為:

將圓形楔（2）沿與主水平基準垂直的方向楔入樁（3）和鋼套管（5）之間，一直楔入到樁（3）兩節之間的預計斷點（4）處，用旋轉裝置（1）驅動圓形楔（2）繞樁（3）做圓周運動，通過圓形楔（2）扭轉樁（3），直到樁（3）在預計斷點（4）或預計斷點(4)的附近斷裂，從而切斷樁（3）的頂部一節或者樁（3）的頂部一節的一部分。

5、 根據權利要求1所述的一種提取樁的施工方法，其特徵在於，所述步驟d具體為:

將圓形楔（2）更換為抓斗，通過旋轉裝置（1）使用抓斗抓取鋼套管（5）內斷裂的樁（3），測量抓取的斷裂的樁（3）的長度。

6、 根據權利要求5所述的一種提取樁的施工方法，其特徵在於，在斷裂的樁（3）的長度與預計斷點（4）以上的樁（3）的長度相符時，用起重機提取鋼套管（5），重新定位樁（3）的剩餘部分中最上節的預計斷點（4）的位置或者重新對樁（3）定位，此時再次操作從 (a2) 至 (c) 的步驟以及步驟（d）中使用抓斗抓取斷裂的樁（3）並測量抓取的斷裂的樁（3）的長度的步驟，直到多次提取後剩餘的樁（3）的高度符合設計要求。

7、 根據權利要求5所述的一種提取樁的施工方法，其特徵在於，在斷裂的樁（3）的長度與預計斷點（4）以上的樁（3）的長度不符時，檢查抓取的斷裂的樁（3）、旋轉裝置（1）、圓形楔（2）及其它設備後繼續提取工作，直到多次提取後剩餘的樁（3）的高度符合設計要求。

8、 根據權利要求1所述的一種提取樁的施工方法，其特徵在於，所述步驟e具體為:

提取樁（3）後，剩餘的樁（3）的高度符合設計要求時，用旋轉裝置（1）拔出鋼套管（5），同時根據剩餘的樁（3）的頂部的水平線，用回填材料回填拔取樁（3）之後留下的洞，然後用沙子覆蓋地面；回填材料的頂部高於並與鋼套管（5）的底部動態保持一段距離，直到回填材料填充到上述洞的洞口，然後繼續拔出鋼套管（5），直至完全拔出。

9、 根據權利要求1所述的一種提取樁的施工方法，其特徵在於，鋼套管（5）的直徑為1.5 – 3.0 m。」

12.  The English translation (including the different translations put forward by the Plaintiff and the Defendants for some of the words or phrases)  placed before the Judge and us reads:

“ CLAIMS

1. A construction method for extracting a pile, comprising breaking the pile by sections sequentially from its top part extracting the broken section of the pile; specifically comprising the following steps:

a. Sink the steel casing: Cause the steel casing (5) to be sunk into the ground such that a section of the top part of the pile (3) or a part thereof, are enclosed by the steel casing (5), excavate the soil inside the steel casing (5);

b. Wedge the circular wedge: use a circular wedge (2) to wedge between the pile (3) and the steel casing (5);

c. Break the pile: drive the circular wedge (2) to move, break the pile (3) at a position close to a predicted breakpoint (4) between two sections of the pile (3);

d. Extract the pile: extract the broken pile (3);

e. Backfill: backfill the hole left after the pile (3) is extracted.

2. The construction method for extracting a pile as claimed in claim 1, the characteristic of which is that, wherein step a comprises:

(a1) locate the position the pile (3) to be extracted; after locating the position, install a rotating device (1) and a crane above the pile on the ground taking the horizon as the Principle Datum;

(a2) cause the steel casing to be vertically sunk into the ground such that a section of the top part of the pile (3) or a part thereof are enclosed by the steel casing (5);

(a3) Utilize a rotating device (1) and a grab installed [D1 on] [P: above] it to excavate the soil between the pile and the steel casing to expose a section of the top part of the pile (3) or a part thereof; while there is a need to leave some soil inside the steel casing (5) so as to avoid the ground nearby from settling.

3. A construction method for extracting a pile as claimed in claim 1, the characteristic of which is that, wherein step b comprises:

Replace the grab by a circular wedge (2), [D1: using the rotating device to] place the circular wedge (2) [P: through the rotating device (1),] in a position between the top part of the pile (3) and the steel casing (5).

4. A construction method for extracting a pile as claimed in claim 1, the characteristic of which is that, wherein step c comprises;

Wedge the circular wedge (2) between the pile (3) and the steel casing (5) along a direction perpendicular to the Principle Datum until it reaches the estimated breakpoint (4) between two sections of the pile (3); use the rotating device (1) to drive the wedge (2) to move in a circular motion around the pile (3), [D1: using] [P: through] the circular wedge (2) [D1: to] twist the pile (3), until the pile (3) is fractured or ruptured at or around the estimated breakpoint (4), so as to break a section of the top part of the pile (3) or a part thereof.

5. A construction method for extracting a pile as claimed in claim 1, the characteristic of which is that, wherein step d comprises:

Replace the circular wedge (2) with the grab; [D1: utilizing the rotating device (1) to] use the grab to grab [P: through the rotation device (1),] the broken pile (3) inside the steel casing (5); measure the length of the broken pile which is grabbed.

6. A construction method for extracting a pile as claimed in claim 5, the characteristic of which is that, when the length of the broken pile (3) matches with the length of the pile (3) above the estimated breakpoint (4), extract the steel casing (5) with a crane and reposition them to an estimated breakpoint (4) of the top part of the remaining pile (3) or reposition them to the pile (3). At this time, repeat the steps (a2) to (c) and the procedure of using the grab to grab the broken pile (3) and measuring the length of the broken pile (3) in step (d) until the height of the remaining pile (3) meets the design specifications after numerous extractions.

7. A construction method for extracting a pile as claimed in claim 5, the characteristic of which is that, when the length of the broken pile (3) does not match with the length of the pile (3) above the estimated breakpoint (4), continue the extraction works after inspecting the grabbed broken pile (3), the rotating device (1), the circular wedge (2) and other equipment until the height of the reaming pile (1) meets the design specifications after numerous extractions.

8. A construction method for extracting a pile as claimed in claim 1, the characteristic of which is that, wherein step e comprises:

After the pile (3) is extracted, if the height of the remaining pile (3) meets with the design specifications, use the rotating device (1) to extract the steel casing (5), while at the same time, according to the level of the top of the remaining pile (3), backfill the hole left after the pile is extracted with backfill material, and then with sand to cover the ground. During the process, the top level of the backfill material should be higher than the bottom of the steel casing (5), and the two should be dynamically spaced from each other by a certain distance until the backfill material reaches the top of the aforesaid hole. Subsequently, continue extracting or pulling out the steel casing until it is completely extracted or pulled out.

9. A construction method for extracting a pile claimed in claim 1, the characteristic of which is that, the diameter of the steel casing (5) is 1.3-3.0m.”

13.  There were 2 embodiments and 7 diagrams in the Patent.   The diagrams are annexed by the Judge to the Main Judgment in Annex 2. 

14.  As will be seen below, the Search Report also has some significance and we therefore set it out below:

「 1. 對比文件1 作為最接近的現有技術，其公開了一種提取樁的施工方法，並具體公開了以下技術特徵：該施工方法是將樁從上部依次分節切斷並提取該節樁體，具體步驟包括:沉入套管１：將套管1沉至地下，使套管內含樁的頂部一節，挖掘套管內的土壤；將切割器10放入樁和套管之間；驅動套管運動，在樁的兩節之間的預計斷點附近切斷樁；對切斷的樁進行提取，回填拔取樁之後留下的洞；對比文件1中的技術方案雖然也公開了一種分節切斷樁並提取狀體的施工方法，但對比文件1中並未公開採用圓形楔楔入樁和鋼套管之間以及只驅動該圓形楔從而切斷樁的技術特徵；因此權利要求1所要求保護的技術方案具有新穎性，符合中華人民共和國專利法第二十二條第二款的規定。

2. 上述區別技術特徵既未被檢索到的對比文獻公開，也不屬於本領域中的公知常識，權利要求1的技術方案相對於現有技術而言採用了一種新型的圓形楔作為切斷樁的工具，而且在施工過程中只需要驅動圓形楔繞樁做圓周運動從而扭轉切斷樁，適應性强，並可以帶來所需拔樁力小，能夠拔取深樁且可準確預計出斷點的技術效果，因此相對於現有技術並非顯而易見；因此權利要求1所要求保護的技術方案具有創造性，符合中華人民共和國專利法第二十二條第三款的規定。」[2]

15.  The Judge set out his reading of the Search Report at §132 of the Main Judgment:

“ In the said two paragraphs, the examiner compares the pile removal method claimed in the Patent with the existing prior art the closest of which is the Kaneken Patent. The examiner refers the Kaneken Patent as a method of cutting the pile. In paragraph 1, the examiner describes the characteristic of the patented method as, after the wedging of the circular wedge into the space between the pile and the casing, it only drives the circular wedge to cut the pile (採用圓形楔楔入樁和鋼套管之間以及只驅動該圓形楔從而切斷樁的技術特徵). According to the examiner, what is different between the patented method and the method in the Kaneken Patent is that the Patent refers to the use of a new type of circular wedge as a tool to cut the pile (新型的圓形楔作為切斷樁的工具). During the execution process, it is only necessary to drive the circular wedge around the pile in a circular motion to twist and cut the pile (在施工過程中只需要驅動圓形楔繞樁做圓周運動從而扭轉切斷樁).”

16.  Apart from the term of a short-term patent, there are other significant differences between it and a standard patent.  As the Registrar is only required to conduct a formality examination before the grant of a short-term patent[3], it was provided in s129 of the Patent Ordinance that in any court proceedings for the enforcement of rights in relation to a short-term patent, the proprietor has to establish the validity of the patent.  The effect of s129 is subject to debate in this appeal and we shall discuss the same below.

17.  Based on the evidence before him, the Judge identified the key concepts of the invention at §146 of the Main Judgment:

“ Having considered all the evidence of the case, I do not think that the parties would disagree that the key concepts or the “pith and marrow” of the rotator and wedge method consist of the following:

(i) the use of a wedge of any shapes, or an assembly of wedges of any shapes, as jamming and immobilising device between the pile and the internal surface of the casing; and

(ii) with the trapping of the pile inside the casing, the rotation of the casing causing the pile to twist and to break at a pre-determined point.”

18.  Before us, Mr Clark (counsel for SNE) criticised the Judge for his use of the phase “pith and marrow” and his reference to “wedge of any shapes”.  Counsel submitted that the Patent only confines to circular wedge though he also submitted that in the eyes of a skilled man, having regard to Diagram 6 in the Patent, “circular” could mean anything akin to a cylindrical object with a concave groove.  With respect, the Judge clearly used the expression “pith and marrow” as a shorthand for the essence of the invention.  We do not think the Judge had inadvertently applied the old approach disavowed by Lord Diplock in Catnic Components Ltd v Hill & Smith Ltd [1982] RPC 183.  Further, it is equally clear that the Judge did not overlook the circular aspect of the wedge in the Patent as he pinpointed this as one of the problems in sufficiency at §156 of the Main Judgment.  We shall discuss Mr Clark’s other submissions later.  Mr Clark also confirmed that apart from these complaints, he agreed with the Judge’s identification of the key concepts of the invention.

C. The Main Judgment

19.  The Judge came to the conclusion that the Patent was invalid on the following grounds in the Main Judgment:

(a) The specification of the Patent does not disclose the invention in a manner sufficiently clear and complete for it to be performed by a person skilled in the art, see §§146 to 173 of the Main Judgment; and

(b) Alternatively, the method which SNE sought to be patented was not new because it had been made available to the public, see §§190 to 269 of the Main Judgment.

20.  On the insufficiency ground, the Judge considered the evidence of the two expert witnesses before him, Professor Lee (SNE’s expert witness) and Dr Yeung (Hsin Chong’s expert witness) and at §§152 to 166 referred to six matters which he, donning the mantle of a skilled person, regarded as insufficiently clear:

(a) The Patent does not specify whether the wedge is to be used as a jamming or immobilising device;

(b) The Patent is not clear as to what causes the wedge to rotate inside the casing ;

(c) The reference to the shape of the wedge as circular is causing confusion;

(d) The diagrams in the Patent are causing confusion as they do not correspond with the description of the method in the text;

(e) It is not clear how the method works in the extraction of bored piles; and

(f) There are technical flaws in the description of the process.

21.  In coming to such conclusion, the Judge placed some significance on Professor Lee’s initial difficulty in understanding how the method worked by reading the Patent.  It was only after someone from SNE had shown him a presentation on how it actually worked on site that he could understand it[4].

22.  The Judge also referred to the explanation by Mr Sugisaki, SNE’s major shareholder, of the method in a substantially different manner from those given by the expert witnesses.  The description by Mr Sugisaki had the additional feature of hardening the soil around the pile (instead of excavating the soil) which was not referred to in the Patent[5].

23.  The Judge alluded to the discrepancy between the subject matter of the Search Report and the invention which was supposed to be patented.  He highlighted that in the Search Report, the examiner was examining a method in which the function of the circular wedge was to cut the pile and the inventive feature was “a new type of circular wedge to cut the pile”.  He was of the view that the Search Report could not prove the novelty of the supposed subject of the Patent and neither could the evidence of Professor Lee prove the relevant prior art[6]. 

24.  The Judge’s consideration of the question of novelty was divided into two sections.  The first section is on the challenge based on prior art in Japan[7].  The second section is on the challenge based on disclosure of the method by SNE[8].

25.  In the first section, due to the lack of pleas from the defence to raise objection based on prior art apart from a plea relating to the Nippon Sharyo Brochure [“the Brochure”], by reason of Order 103 Rule 21 the Judge declined to entertain a challenge from them as to the failure of SNE in adducing evidence of prior art in Japan.  This part of the Judge’s decision is subject to challenge from Hsin Chong and Chim Kee in their respective Respondent’s Notice.

26.  Hsin Chong and Chim Kee’s challenge based on the Brochure was entertained by the Judge.  That Brochure was introduced into evidence by SNE and Mr Clark examined Professor Lee on the same.  In the course of cross-examination, Mr Philips Wong (counsel for Chim Kee) managed to elicit evidence from Professor Lee by comparing the Brochure with the method supposedly subject to the Patent which was unfavourable to SNE on the question of obviousness, thus lack of novelty.  After that, at the invitation of leading counsel for SNE, Hsin Chong and Chim Kee sought and obtained leave to amend their particulars of objection to include an objection to the validity of the Patent based on the Brochure.  SNE did not oppose the amendment.  Thus, the objection based on the Brochure was introduced into the trial.  The circumstances pertaining to this objection shall be further considered later in our discussion on the appeal as to costs.

27.  The Judge discussed the challenge based on the Brochure at §§214 to 222.  After commenting on the difficulty the court faced when it had come to the conclusion that the Patent was not sufficiently clear to a skilled person, the Judge said these at §§221 and 222 (based on which Mr Clark on the one hand and Mr Stewart Wong SC, counsel for Hsin Chong and Mr Philips Wong on the other hand advanced different submissions):

“ 221. The court is perhaps facing the same paradox here. Although the person skilled in the art for obviousness is not necessarily the same person skilled in the art for performing the invention once it is made (as observed by the English Court of Appeal in Schlumberger v EMGS), I am of the view that, in the present context, persons skilled in art, when they have difficulty in working out the exact method under the Patent, would have the same problem when they have to work out the rotator and wedge method just by studying the method described in the Brochure. On the other hand, if persons skilled in the art would have been so skilful in working out the rotator and wedge method by studying the specification in the Patent, which I do not accept it to be the case, the rotator and wedge method would have been obvious to them after studying the method described in the Brochure. In other words, the Patent involves no inventive step.

222. In the Judgment above, I have already ruled that the Patent is invalid for insufficiency, as the specification has failed to disclose sufficient particulars to enable a person skilled in the art to work out the alleged patented process without undue burden.  As the key concepts of the rotator and wedge method are missing both in the specification in the Patent and in the description of the method in the Brochure, I do not accept that the rotator and wedge method is obvious to a person skilled in the art after studying the method described in the Brochure.  Hence, the challenge based on the prior art in Japan and s 129(1) of the Patents Ordinance fails.”

28.  In their respective Respondent’s Notice, Hsin Chong and Chim Kee contended that the Judge should also have held in their favour on the question of obviousness.

29.  In the second section on novelty, the Judge considered disclosure of the method by SNE to the personnel involved in the piles removal project during negotiations and execution of works at the site[9]. His finding of fact was that the Japanese parties of SNE had made a representation to Hsin Chong and Chim Kee at a meeting on 14 January 2010 that the method in question had been widely used in Japan and Singapore[10]. Based on that finding, he came to the conclusion that Hsin Chong and Chim Kee owed no obligation of confidentiality to SNE in respect of the disclosure during the course of negotiations leading to the sub-contracts and the actual execution of works at site[11].  The gist of the Judge’s reasoning can be found in the following parts of the Main Judgment:

“ … However, if a partner of a business project makes a representation to another to the effect that the information contained in the communication has already been in the public domain, then the person who receives the information is free in law and equity to make use of the information for himself, with the effect that the disclosure would have an invalidating effect.[12]

… If I were to accept the evidence of Hsin Chong that the Japanese partners of SNE had made a representation to it that the rotator and wedge method had been widely used in Japan and Singapore, then the law should not impose confidentiality on the information passed between the parties about the operation of such method, because the information was supposed to be already in the public domain. If the court were to make such finding of fact, Ms Tam accepts that no confidence should be attached to the relevant communications.”[13]

30.  In addition, the Judge also held that Chim Kee did not owe any implied duty of confidentiality to SNE as it was only a machinery supplier.  He said at Main Judgment §250:

“ … Chim Kee was only involved in the machinery rental industry. It is very difficult to argue that a machinery supplier is under a general duty to keep confidential the information it receives in the absence of any warning about the novelty of the invention or express confidentiality agreement. It was for SNE to take the necessary precaution against a low-level participant like Chim Kee. Without any warning or express confidentiality agreement, the court should not impose an obligation of confidence on the operators of Chim Kee about the operational procedures of the pile removal works.”

31.  In respect of disclosure to the public and parties not involved in the project, the Judge mainly referred to the execution of the works at the site and possible observation of the following features by members of the public:

(i) the details of the equipment to be used in the process, including the rotator, the casing and the wedge;

(ii) the sinking of the casing into the ground;

(iii) the lowering of the wedge into the casing itself;

(iv) the rotation of the casing by the rotator; and

(v) the extraction of the twisted pile.

32.  Though members of the public could not see what happened inside the casing, based on the evidence of Dr Yeung, the Judge concluded that a person skilled in the art could still work out the method by reference to what were observable.  He also remarked that such observations would teach a skilled person more about the method than the specification in the Patent.[14]

33.  On the question whether Chim Kee could be held liable for infringement by virtue of its role in the execution of the works after the termination of the sub-contracts, the Judge highlighted the following undisputed facts:

(i) Chim Kee is one of the most well-established construction machinery suppliers in Hong Kong, and it has had business in Hong Kong for many years;

(ii) Chim Kee does not provide operators for all kinds of  machinery it supplies, and usually it only provides operators for cranes and excavators because such operators are required to have a licence under the law to operate such machinery and the supply of such operators is small in the market;

(iii) for Contract 802, the operators provided by Chim Kee only operated the crawler cranes and excavators supplied by Chim Kee;

(iv) Chim Kee does not have a “sub-contractor” licence and so it cannot conduct and has not conducted any business or undertaking involving any kind of construction work itself; and

(v) Chim Kee was not aware of the terms of the contract between MTRC and Hsin Chong, the Sub-Contracts between SNE and Hsin Chong and the code of practice of MTRC.[15]

34.  The Judge identified the steps in the invention which the Patent was supposed to protect and found that as Chim Kee’s operators was not involved in all the steps and on that basis held that SNE’s claim against Chim Kee as an infringer on its own must fail.[16] 

35.  The Judge further rejected SNE’s contention that Chim Kee was liable as a joint tortfeasor in relation to a common design because it was not pleaded.  In any event, as Chim Kee only provided machinery and its operators only performed the works according to the instructions of the staff of Hsin Chong at site, the Judge held that there was no basis for holding Chim Kee liable as joint tortfeasor pursuant to a common design.

D. The issues in the appeal against the Main Judgment

36.  In light of the submissions advanced before us, the appeal against the Main Judgment involves the consideration of the following broad issues:

(a) Whether the Patent is invalid on the ground of insufficiency.  In that context, one would also need to consider the proper construction of the Patent by adopting a skilled man’s perspective and how the court should apply that perspective with the aid of expert evidence.  These issues will be discussed in Section E of this judgment;

(b) The proper construction and effect of s129 of the Patents Ordinance and the applicability and effect of Order 103 Rule 21 of the Rules of the High Court in an infringement action based on a short term patent granted under the Patents Ordinance.  In the present context, the principal point involving consideration of these issues is the contention of Hsin Chong and Chim Kee in their Respondent’s Notices that SNE bears the burden of adducing evidence of prior art in Japan and the Judge’s holding that the Search Report could not be relied upon to prove the novelty of the Patent.  We will discuss these issues in Section F of this judgment;

(c) Whether the Patent is invalid on the ground of lack of novelty due to obviousness by reference to the Brochure or due to disclosure before the date of application.  These issues will be discussed in Section G of this judgment; and

(d) Whether Chim Kee is not liable in any event for the reasons given by the Judge.  The issues under this head will be discussed in Section H of this judgment.   

37.  The appeal against the Costs Judgment involves consideration of the progress of the trial and the general exercise of discretion by the Judge on costs.  It will be discussed in Section I of this judgment.

38.  Before we turn to these issues, we shall explain briefly why we allowed Hsin Chong and Chim Kee to advance submissions based on their late Respondent’s Notices, the summons for which were filed on 4 and 5 June 2015 respectively.  Order 59 Rule 6 requires respondent’s notice to be filed within 21 days of the service of the notice of appeal.  At the same time, Rule 7 permits a party to an appeal to amend his notice of appeal or respondent’s notice without leave 3 weeks before the hearing of the appeal.

39.  In addition to the timetable set out in the rules, this court had stressed the importance of case management considerations in the exercise of discretion which may impact on the fair and efficient conduct of the appeal, see To Pui Kui v Ng Kwok Piu [2014] 5 HKLRD 103; PW v PPTW CACV 224 of 2013, 16 Dec 2014.  We take this opportunity to reiterate the policy underlying Order 1A and these decisions and it would be wholly wrong to regard our acceding to the applications of Hsin Chong and Chim Kee to file their Respondent’s Notices at a late stage as undermining what had been said in those cases. 

40.  The procedural history of the appeal is relevant. The original Notice of Appeal was served in April 2014.  However, SNE substantially amended its notice of appeal by serving a supplementary notice of appeal on 14 April 2015.  At the same time, there was a pending summons by Hsin Chong seeking security for costs, which had been taken out on 9 December 2014. Due to the time taken up for the filing of evidence in the summons, it was only heard on 7 May 2015.  The court ordered security to be given and an interim stay pending the payment of security was ordered.  SNE paid the security on 28 May 2015.

41.  The points raised by the Respondent’s Notices were mentioned in the earlier parts of this judgment.  Those were points fully canvassed before the Judge.  Notwithstanding the late stage at which SNE was given notice of the points being taken, Mr Clark was able to deal with them effectively at the appeal.  Very properly, Mr Clark did not oppose the s129 point being taken.  The proper construction of this section, which according to counsel is a unique Hong Kong provision without any relevant overseas authorities to shed light on how it should be construed, is a question of some general public importance.     

42.  As regards the Brochure and obviousness point, the contentions of the parties basically revolved around §§221 and 222 of the Main Judgment.  Depending on our conclusions on the other issues in the appeal, it may not be necessary to deal with the question of obviousness by reference to the Brochure.  Mr Wong SC informed us that Hsin Chong would wish to preserve the point in any event.  As indicated by us, if the point were to become relevant, this court is not minded to assess the question of obviousness afresh and will probably remit the same to the court below for determination.  In the circumstances, the time taken for this point to be canvassed in the appeal would not be long and there cannot be any prejudice to SNE in permitting the same to be argued in the appeal.

43.  In such circumstances, we granted leave to Hsin Chong and Chim Kee to rely on these arguments in this appeal.

44.  We should also record that we indicated at the hearing that it would not be appropriate for us to deal with the question of infringement in view of the absence of relevant finding of facts in the judgment below on account of the Judge’s conclusions on invalidity of the Patent.  As in the case of the contention of obviousness, this question only arises if we reverse the Judge’s findings on invalidity.  In that event, as indicated, we would remit the question to the court below for the relevant findings to be made.

E. Insufficiency

E.1 Issues raised by SNE on insufficiency

45.  To attack the Judge’s finding of invalidity on insufficiency, Mr Clark raised a number of arguments.

46.  First, he raised a pleading point.  He submitted that Hsin Chong did not plead any objection to the sufficiency of Claim 1 and Chim Kee did not raise any plea of insufficiency at all.  So the Judge should only have considered whether the claims which were challenged for insufficiency were valid and should have held Claim 1 to be valid.

47.  Second, he submitted that most of the evidence referred to by the Judge in arriving at the six matters which are the main reasons for ambiguities and lack of clarity in the Patent is inadmissible, as construction of claims is a matter of law for the court not the expert witnesses.  The Patent is to be construed by reading the claims as interpreted by the description and the drawings and not by considering “all the evidence of the case”, as stated in §146 of the Main Judgment.  The Judge wrongly approached the question of sufficiency by choosing the evidence of the expert he preferred.

48.  Third, it was contended that the Judge had made various errors of law in construing the Patent.  He only construed the claims in the context of insufficiency and did not construe the Patent as a whole.  He made no reference to the circular wedge in §146 of the Main Judgment.  He failed to construe Claim 1 purposively.  He treated the Patent like an instruction manual when it is not required that the Patent should teach the skilled addressee the invention will work or why the patented process will work and that the requirement of enabling disclosure will be satisfied if the Patent sufficiently informed the skilled addressee of the steps necessary to perform the process claimed so that it is plausible to the addressee that the invention will work.  He was wrong to hold that the Patent was invalid for ambiguity, as ambiguity is not a ground for revocation.  Further, he wrongly held that the Patent was required to enable all the embodiments in the specification.

49.  Fourth, the Judge failed to take into account relevant aspects of Dr Yeung’s evidence to the effect that a skilled team on site would know by trial and error what to do to work out the patented process. He failed to consider that both Professor Lee and Dr Yeung had accepted a construction engineer would understand that the jammed wedge is driven by the rotation of the casing.  Thus construed purposively, the Patent is not insufficient.

50.  Fifth, the Judge made no reference to Professor Lee’s 1^st supplemental expert report which was made in response to the points on insufficiency raised in Dr Yeung’s report.  Nor did the Judge mention the detailed submissions in SNE’s closing submissions in relation to Hsin Chong’s pleaded case on insufficiency.

E.2 The pleading point

51.  Mr Clark took the court to Hsin Chong’s Re-Re-Amended Particulars of Objection [“POO”] and submitted that in §3 Hsin Chong had only pleaded insufficiency in relation to Claims 2, 3, 4, 5 and 6 of the Patent and had not challenged Claims 1, 7, 8 and 9.  As mentioned earlier, Chim Kee did not plead insufficiency as a ground to challenge the validity of the Patent.  He submitted that as the conventional hierarchy of claims is to start with the widest and progress through subsidiary claims of ever narrowing scope, the antecedent claim, Claim 1, would be read as wider than the later subsidiary or dependent claims, Claims 2 to 9.  He contended that Dr Yeung’s report had only addressed the subsidiary claims but not the sufficiency of Claim 1.

52.  Mr Clark relied particularly on Order 103 rule 21(3) of the Rules of the High Court in submitting that the particulars of objection must state the fact that an example of the invention which is the subject of a claim cannot be made to work and each such claim must be identified.

53.  For the above reasons, Mr Clark argued that the court must treat Claim 1 as not having been challenged due to insufficiency.

54.  This pleading point was taken by SNE at a late stage during the trial.  The objection was raised only in the written closing submission of SNE after the conclusion of the evidence, when the witnesses had been questioned extensively on all aspects of the specification.  The Judge did not deal with it in his lengthy judgment.  He must be taken to have rejected it, and rightly so, in our view.

55.  It is correct that the particulars given in §3 of the POO only mentioned Claims 2, 3, 4, 5 and 6, but §3 started with the general averment that “the specification of the alleged invention, the subject of [the Patent], does not disclose the alleged invention in a manner sufficiently clear and complete for it to be performed by a person skilled in the art”.  As pointed out by Hsin Chong’s trial counsel to the Judge, the wording of steps a to e of the method described on page 2 of the specification is identical to steps a to e in Claim 1.  So in effect Claim 1 has been pleaded in the general averment[17].

56.  Further, as submitted by Mr Wong SC, Claim 3 is equivalent to step b in Claim 1 but with a narrower scope as there was an explanation of the process in greater detail and Claim 4 is the equivalent to step c in Claim 1 with a narrower scope.  Claims 3 and 4 tracked the wording of the particulars of steps b and c given in page 2 of the specification.  If Claims 3 and 4 were held to be insufficient notwithstanding there was explanation of the process in greater detail, steps b and c in Claim 1 must likewise be held to be insufficient.  We agree with his submission.

57.  SNE’s pleading objection came at the end of the trial when all the evidence had been led and the expert witnesses had given evidence on technical matters relating to the construction of the Patent and the issue of insufficiency.  No one had taken issue about the admissibility of such evidence.  We see no unfairness in the trial process and no prejudice to SNE.  This is precisely the kind of situation which Ma CJHC (as the Chief Justice then was) referred to as pedantic, small or insignificant points of pleadings and objections without force in Wing Hang Bank Ltd v Crystal Jet International Ltd [2005] 2 HKLRD 795 at §7.

58.  There is no merit in the pleading objection.

59.  In the course of his submission, Mr Clark also contended that of the six factors found by the Judge to have constituted grounds of insufficiency, only some of them were pleaded in the POO, being the second factor (what causes the wedge to rotate inside the casing, at §153 of the Main Judgment); the third factor (the specific reference to the shape of the wedge, i.e. circular in shape, causing confusion, at §§156 to 159); and the sixth factor (technical flaws and errors in the Patent, at §166).  He submitted that the Judge had gone beyond the issues raised in the pleadings in making his findings.

60.  We have considered the particulars pleaded in the POO.  We agree with Mr Wong SC that material facts were adequately pleaded in relation to each of the six factors found by the Judge to have rendered the Patent bad for insufficiency. 

E.3 The admissibility of expert evidence

61.  There is no dispute about the legal principles, which the Judge had correctly and succinctly stated in §135 of the Main Judgment:

“ 135. It is trite law that the construction of a patent is ultimately a matter for the court and not the witnesses. However, since a patent has to be construed in the eyes of persons skilled in the art, the court can take into account the evidence of the relevant experts, who are presumably persons skilled in the art, in construing the terms of the patent itself. The experts may not be asked what the specification means, but expert evidence may be admissible, even on the issue of construction, for instance to explain technical matters. They are also able to give evidence on the issue of insufficiency, i.e. whether the specification in a patent has disclosed sufficient particulars to enable persons skilled in the art to work out the patent itself. For the purpose of this case, the persons skilled in the art are construction or civil engineers. ”

62.  The judge cited Terrell on the Law of Patents (17^th ed) at §§9-80 to 9-84 in support of the above propositions. We have also considered §§9-85 to 9-87 and 9-90.  An expert may give evidence of what the notional skilled addressee would understand from the teaching of the document.

63.  Mr Clark contended that the Judge had approached his task of determining the scope of the invention by resolving factual disputes between the parties’ experts assuming, incorrectly, both to be the notional skilled addressee and that he had determined the issue of insufficiency by simply choosing the evidence of the expert he preferred.  But Mr Clark was unable to find support for his contention by pointing to any particular passage in the Main Judgment showing that the Judge had erred in the manner as contended, for instance, where the Judge had acted on expert evidence as to the meaning of ordinary words in the Patent which have no special or technical meaning in the art.  Nor did counsel point to any particular part of the Main Judgment or the transcript showing that any of the experts had given evidence as to the meaning of the claim (a question of construction for the court), as opposed to the teaching of the specification (a question of disclosure to the notional skilled addressee for which evidence is admissible).

64.  As for the submission that the Judge had erred in construing the Patent by considering “all the evidence of the case” as stated in §146 of the Main Judgment and not by reading the specification as a whole, we agree with Mr Philips Wong that read in its proper context, the Judge in that paragraph was referring to the relevant expert evidence he was entitled to take into account.  It is clear from the paragraphs that follow, from §§147 to 171, that the Judge had referred to the expert evidence adduced by the parties (but not other factual evidence) to assist him in construing the specification in the Patent by donning the mantle of a skilled addressee. 

65.  There is plainly no merit in any of the above complaints.

E.4 If errors of law were made in construing the Patent

66.  Mr Clark submitted that the Judge had only construed the claims in the context of insufficiency.  We do not think that is a fair reading of the Main Judgment in particular §126 which read as follows:

“ As one can see from above, construction of a patent and insufficiency are very much related issues. In determining whether a patent should be revoked on the ground of insufficiency, the court has to first understand the patented product or process as claimed by the patentee. After knowing the invention itself, the court has to construe the specification in the patent, putting itself in the shoes of a person skilled in the art, and to determine whether the patent has disclosed the invention in a manner sufficiently clear and complete for it to be performed by a person skilled in the art. …”

67.  In so doing, the Judge followed the approach of Kitchin J (as he then was) in Eli Lilly and Co v Human Genome Sciences, Inc [2008] RPC 29 at §239.  There was no error of law in the Judge’s approach at construction.

68.  Nor do we accept that the Judge had not construed the Patent purposively, as contended by Mr Clark.  The Judge had correctly set out the principles of construction in §§105 to 117 of the Main Judgment and the principles underlying the requirement of sufficiency in §§118 to 126. Having stated the legal principles and analysed the evidence given by the experts from §§147 to 171, the Judge came back to the purposive approach of construction and said the following in §173:

“ In construing the specification in the Patent, I have reminded myself that the court has to adopt a purposive approach. I appreciate that the draftsman of a patent may have difficulty in describing something new, and so the court should not adopt a legalistic approach in construing the meaning of an invention, like the approach of a lawyer in construing the meaning of a contract or a piece of legislation. Nevertheless, the Patent here is not concerned with some completely new theory or concept which is difficult to express in conventional language. It is only about the extraction of piles. There are various ways for the extraction of building piles involving the use of similar equipment, and it is how the use of such equipment, or the new concept in the use of such equipment, which is the subject matter of the Patent. The language used by the patentee in describing the process is therefore of critical importance. Although one does not expect the Patent to be a technical manual and the drawings contained therein to be working drawings, the Patent should identify the novel concept involved in a reasonably clear manner. If the Patent is reasonably capable of being understood by persons skilled in the art as referring to two or more different methods, the draftsman of the Patent should have supplied sufficient particulars in the specification so that there is a reasonable degree of certainty about the Patent.”

69.  We could discern no error in the above statements of the Judge and no support for the contention that he had failed to construe Claim 1 purposively.

70.  Mr Clark pointed to §146 and submitted that as the Judge had made no reference to a circular wedge, but mentioned “the use of a wedge of any shapes, or an assembly of wedges of any shapes” as the jamming device, this indicated that he had not construed the Patent properly by reading the specification as interpreted by the description and drawings.  We do not think this is a fair reading of that part of the Main Judgment.  As mentioned in the opening sentence of §146, the Judge was dealing with the “key concepts” of the “rotator and wedge method” as described by Professor Lee, which he had set out earlier in §38 of the Main Judgment, noting in §39 that a good illustration of this method can be found in two diagrams in a written presentation of Hsin Chong and a photograph taken at the site for the H-pile removal works carried out by Hsin Chong after the termination of the sub-contracts[18], and stating in §40 that it is SNE’s case that the invention claimed in the Patent is the rotator and wedge method as described.

71.  Having identified the key concepts in the rotator and wedge method, the Judge then posed the question at §147 whether the specification in the Patent does disclose the key concepts.  He sought to answer this question in the paragraphs that follow, assisted by the expert evidence as to what the disclosure of the Patent would teach a skilled addressee.  In doing so, the Judge construed the specification and drawings and, as we have observed earlier, in §§156 to 159 he had referred to the circular wedge that featured in the specification and diagrams and found that the specific reference to the circular wedge is causing confusion.  Clearly, the Judge had construed the specification with reference to circular wedge and such of the variants as claimed by SNE.  There is no merit in Mr Clark’s criticisms.

72.  As is also apparent from §173 of the Main Judgment, the Judge is mindful that “one does not expect the Patent to be a technical manual and the drawings contained therein to be working drawings”.  He was just asking if “the Patent should identify the novel concept involved in a reasonably clear manner”.  In §167, he came to the conclusion that a combination of the six factors found by him “would create considerable confusion in the minds of persons skilled in the art, and they would have serious difficulty in working out the patented process themselves”.  This is entirely in line with the requirement in sections 77 and 91(1)(c) of the Patents Ordinance, that the specification of a patent for an invention shall “disclose the invention in a manner sufficiently clear and complete for it to be performed by a person skilled in the art”.

73.  Mr Clark pointed to the last sentence in §152 in which the Judge wondered “why the draftsman of the Patent did not specify such key concept [i.e. the wedge being used as a jamming or immobilizing device] clearly in the Patent itself” and submitted that the Judge had erred in law in treating the specification as a manual that teaches perfectly how the patented process should be performed, and requiring the Patent to explain why the invention will work.  We do not think that is a proper reading of the Main Judgment.

74.  Mr Clark also prayed in aid the proposition that the notional skilled addressee when considering a claim should rule out interpretations which are illogical or which do not make technical sense and should try to arrive at an interpretation of the claim which is technically sensible and takes into account the whole disclosure of the patent, with a mind willing to understand and not a mind desirous of misunderstanding (T 190/99, 6 March 2001, decision of the Technical Board of the European Patent Office).  He submitted that errors and technical flaws in the description of the patented process are not grounds to invalidate the Patent as the skilled addressee would readily notice them and by trial and error work out how the process would work.

75.  The relevant principles in dealing with obvious errors in the specification were mentioned in §§122 and 123 of the Main Judgment, in which the Judge cited Terrell at §13-32 and Mentor Corporation v Hollister Inc [1993] RPC 7 where the English Court of Appeal approved the test of Aldous J at 14:

“ The test to be applied for the purpose of ascertaining whether a man skilled in the art can readily correct the mistakes or readily supply the omissions, has been stated to be this: Can he rectify the mistakes and supply the omissions [without] the exercise of any inventive faculty? If he can, then the description of the specification is sufficient. If he cannot, the patent will be void for insufficiency.”

76.  The Judge applied the law to the facts he found on the teaching of the specification and what a person skilled in the art would do with that teaching without the exercise of inventive ingenuity. He then came to the view in §166 that despite the attempts of a skilled person using common general knowledge and trying his best to figure out the patented process with a view to achieve success, “with all the ambiguities and technical flaws in the Patent, even [a] person skilled in the art would start to query whether the alleged patented method, if he can figure out the exact process, is workable”.  The Judge did not make any error of law as contended by Mr Clark.

77.  Mr Clark further submitted that ambiguity is not a ground for revocation of the Patent, and even if the Judge were to find the Patent ambiguous, he would still have to grapple with the construction of the Patent for better or worse, as the court does not have the option of revoking the claims concerned for ambiguity under section 91(1) of the Patents Ordinance, citing Terrell at §9-108.

78.  The Judge dealt with this in §124 of the Main Judgment:

“ Lack of clarity of a claim is not as such a separate ground of revocation. However, a claim that lacks clarity may suffer from the defect of lacking sufficient particulars in the specification and therefore be vulnerable to an insufficiency attack. That was actually what happened in Kirin-Amgen v Hoechst Marion Roussel[19] where the House of Lords held that the claim was bad for insufficiency. The Law Lords found that the lack of clarity made the specification insufficient, as all the skilled man could do in that case was to guess what was in the mind of the patentee.”

79.  The Judge also made reference in that paragraph to Terrell at §§13-34 to 13-37.  He was clearly aware of the legal principles.  Having weighed all the relevant factors, he came to the view that the lack of clarity in the description and drawings of the Patent “does not merely create a fuzzy boundary between that which will work and that which will not” (per Lord Hoffmann in Kirin-Amgen at §126), but the claimed process is truly ambiguous and thus insufficient on the principles laid down in Kirin-Amgen.  We do not think there is any merit in the submission of Mr Clark.

80.  Lastly, Mr Clark referred to a “principle of general application” mentioned by Lord Hoffmann in Biogen Inc v Medeva plc [1997] RPC 1 at 48 to 49 in which this explanation was given regarding the principle of patent law that the specification must enable the invention to be performed to the full extent of the monopoly claimed:

“ If the invention discloses a principle capable of general application, the claims may be in correspondingly general terms. The patentee need not show that he has proved its application in every individual instance. On the other hand, if the claims include a number of discrete methods or products, the patentee must enable the invention to be performed in respect of each of them.

Thus if the patentee has hit upon a new product which has a beneficial effect but cannot demonstrate that there is a common principle by which that effect will be shared by other products of the same class, he will be entitled to a patent for that product but not for the class, even though some may subsequently turn out to have the same beneficial effect: see May & Baker Ltd v Boots Pure Drug Co Ltd (1950) 67 RPC 23, 50.  On the other hand, if he has disclosed a beneficial property which is common to the class, he will be entitled to a patent for all products of that class (assuming them to be new) even though he has not himself made more than one or two of them.”

81.  Lord Hoffmann gave further explanation of what was meant by a principle capable of general application in Kirin-Amgen at §§112 to 113:

“ … It simply means an element of the claim which is stated in general terms. Such a claim is sufficiently enabled if one can reasonably expect the invention to work with anything which falls within the general term. …

… the notion of a “principle of general application” applies to any element of the claim, however humble, which is stated in general terms. A reference to a requirement of “connecting means” is enabled if the invention can reasonably be expected to work with any means of connection. The patentee does not have to have experimented with all of them.”

82.  The specification here contained 2 embodiments and 7 diagrams.  As the Judge has noted in §129 of the Main Judgment, diagrams 1 to 6 are related to the first embodiment, which provides the details of the working procedures to remove bored piles (which would have a diameter bigger than that of the steel casing such that only a part of the upper section of the pile would be enclosed in the casing in step a) and diagram 7 is related to the second embodiment, which is concerned with the working procedures to remove H-piles (which would have a square cross section much smaller than the diameter of the steel casing such that the pile would be enclosed in the casing in step a).  Mr Clark drew our attention to the last paragraph in the specification which read:

“ The above paragraphs together with the accompanying figures describe the implementation examples of the present invention, but this invention does not limit to the above particular implementation examples. The above mentioned implementation examples are indicative only but not limiting in nature. An ordinary technical person in this art could, under the inspiration of the present invention, without departing from the spirit and principle of the present invention and the scope of protection of the Claims, perform many different modifications, equivalents and improvements, which are all included in the scope of protection of the present invention.”

83.  Mr Clark submitted that the invention of the Patent is a principle capable of general application and the monopoly claimed is to remove any kind of pile by the process.  So long as the method works for one of the embodiments, such as H-piles, it is not necessary to demonstrate that the method may also be performed for bored piles.  The Judge was therefore in error in holding as a ground of insufficiency that the patented method does not work for bored piles in §§163 to 165 of the Main Judgment.

84.  We reject this submission.  As pointed out by the Judge in §163, it is stated in the Patent that the method can work both in relation to the extraction of bored piles and H-piles.  Other than the assertion in the last paragraph of the specification, on the evidence as analysed by the Judge in §164, there is nothing to indicate that one can reasonably expect the invention to work with both bored piles and H-piles in the two embodiments, let alone other various types of piles.  SNE has not demonstrated that there is a common principle of operation of the invention capable of general application to various kinds of piles.  The specification only disclosed two embodiments which did not permit generalisation across the width of the claim.  The Judge is correct in holding that the specification did not enable the invention to be performed to the full extent of the monopoly claimed and is insufficient also on that ground.

85.  To conclude, we reject all the contentions raised by SNE that the Judge had made errors of law in construing the Patent.  We turn to the evidence considered and evaluated by the Judge.  

E.5 If errors were made in the assessment of the evidence

86.  To start with, it must firmly be borne in mind that the question of insufficiency is a question of fact involving the assessment, evaluation and weighing of various factors in applying the standards laid down in cases like Mentor Corporation v Hollister Inc.  to the evidence of the nature of the problem.  The ruling of insufficiency by the Judge involves no question of principle but is simply a question of fact and degree.  The appeal court should be very cautious in differing from the Judge’s evaluation and it should be reluctant to interfere (SmithKline Beecham plc’s Patent [2006] RPC 10 at §38, per Lord Hoffmann; Halliburton Energy Services Inc v Smith International Inc [2006] EWCA Civ 1715 at §24, per Jacob LJ; Terrell at §13-39).

87.  The Judge came to the view that the specification in the Patent was badly drafted and essential particulars are missing such that persons skilled in the art would have serious difficulty in working out the exact process claimed in the Patent. There were better illustrations and clearer explanation of the rotator and wedge method in the method statements of Hsin Chong.  For the purpose of construing the Patent and determining the question of insufficiency, it is not necessary to enquire, nor did the Judge enquire, as to why the Patent was so badly drafted, although different reasons were put forward by SNE and Hsin Chong.  SNE submitted it was because the Patent in Chinese was not explained to the inventor Mr Sugisaki until the Patent was obtained[20]. Hsin Chong submitted it would appear to be a case of wilful non-disclosure of a key concept of the invention, pointing to the evidence of Mr Sugisaki that the characteristic of a patent would require explanation of the very important part of the invention and once disclosed everyone would get to know[21].

88.  Mr Clark submitted that after considering the description and diagrams of the specification, and taking into account the evidence of the experts on what the technical terms would mean, having donned the mantle of a skilled addressee, the Judge should have construed the invention of Claim 1 to be a method of extracting intact building piles in situ by (a) wedging a circular wedge between the pile and the internal surface of a casing (integer b in Claim 1); and (b) rotating the casing which drives the wedge that has been jammed to twist the pile and break it at a pre-determined point (integer c in Claim 1).

89.  In support of his submission, Mr Clark relied on various parts of Professor Lee’s 1^st supplemental report (such as §§18, 24 and 30), in which SNE’s expert stated that an engineer skilled in foundation engineering would understand the method as described in the specification.  He also relied on parts of Dr Yeung’s evidence in which Hsin Chong’s expert said words to the effect that an engineer would understand that rotating the casing would move the wedge to break the pile[22]; that the wedge is being rotated indirectly[23]; and that engineers on site or engineers in hierarchy would work out how to do things[24].

90.  Mr Clark contended that both Professor Lee and Dr Yeung accepted in their evidence that a construction engineer would understand that the jammed wedge is driven by the rotation of the casing, citing in support of his contention that part of the specification on the implementation of the second embodiment (but not the first embodiment), Professor Lee’s 1^st supplemental report at §30, and parts of Dr Yeung’s evidence[25].

91.  We do not agree with Mr Clark’s reading of the evidence, which appeared to us to be taken out of context.  We note that those parts of Dr Yeung’s evidence Mr Clark particularly relied on was cross-examination in relation to Hsin Chong’s method statement and the methodology described there, not the specification of the Patent.  What Dr Yeung said about the wedge driven indirectly by the rotator was premised on getting a proper jamming and he was being asked about the method of Hsin Chong.

92.  As to what Professor Lee said in his report about what a skilled engineer could work out from the specification, it is important that this should be read with regard to relevant parts of his subsequent testimony in court, in which he said:

“ His Lordship: But, by looking at this, you don’t know how this method is being used to remove --

A. This is why I say this, and when you look at diagram 2, it looks to me that the wedge, which is number 2 --

His Lordship: It’s usually cut rather than –

A. -- is cut rather than rotated. So I’m sorry to say that up to now, I’m not too sure how that’s going to work.

His Lordship: That means the diagram does not quite support –

A. Exactly, what has been described.

His Lordship: The diagram does not support. But now, with the method that you are being told -- forget about the diagram -- can it be used to remove the bored piles, using the same technology, same method?

A. Yes, because what I meant -- because after that I have been giving a lot of thought to this, and so rather than the first impression from looking at it, then my conclusion is that you have to not just use a single wedge to jack in there, to jam up the space. You need to have something like what I call a circular wedge or a combination of a number of wedges, to jam that wedge into the space, so that you are able to cause rotation to break the pile. That’s what I mean by if I am asked to do it by using this method, then I will think along those lines.

His Lordship: Just like the one in diagram 6, is that right?

A. Yes, diagram 6 is purposively built for the H-pile, which you can just slot in there, but this gives me the thinking or the sort of idea that we have to find --

His Lordship: But diagrams 1 and 2 just don’t make sense?

A. Exactly. There’s a difference, say for example --

His Lordship: It seems to be quite unrelated to the invention, right?

A. But that’s what I mean, when I first looked at it, the first time I looked at it, I wouldn’t say I was very clear at that stage.

His Lordship: I think I had the same thinking.

Mr Wong: Prof Lee, going back to your first report, paragraphs 32 and 33, in paragraph 33 you said that you have been instructed that this method had been used successfully. When were you actually told that this method had been used successfully in real life?

A. When I have meeting with the people, the Japanese friends from SNE or whatever, and then they explain to me, and also at that time they have shown me a video that they have been doing this type of thing in Japan. Then I have to convince myself, to say this is a method that someone else has tried out, I may not understand it fully, but it seems to be something that works, and that’s why I try to think more deeply into this and then try to see how this is going to work.

Q. So is it fair to say that but for the fact that someone had told you the method worked in real life, you would have doubt on the workability of the method stated in the Short Term Patent?

A. As I said, when I just look at the patent itself, just those few pages, I don’t think at that time I was really convinced that this is going to work. Put it this way, I do not see how this is going to work, just by looking at this. I cannot understand fully how this is going to work.[26]

Q. Prof Lee, I do not mean this as criticism, so don’t take it in a negative way or take it the wrong way: were you at the time intellectually trying to fit this additional information into the patent that you have considered earlier, that you said that you don’t understand how it works?

A. I won’t say that I’m trying to fit this into it, but when I first just read the patent, as I think I have mentioned somewhere, first of all the diagrams given to me was not clear, and just by reading this sentence I have difficulty in comprehending the actual way that the thing is to be carried out. Then, as mentioned in here, later, when I have more information from those people, in particular that they indicated to me that this has been successfully carried out, and then I get a clearer copy of that patent, then I think more deeply into this.

Q. And then --

A. And then --

His Lordship: That’s the problem, because you have been told by someone else --

A. Not just told, because I’ve got to see --

His Lordship: Here, we have to concentrate on reading the patent, by someone just like you, someone in the trade. So is that right, according to your evidence, after reading the patent you are able to configure it yourself, that is about the method of jamming, are you able to do it?

A. I have been able to see the concept, if I use the word, or the idea of jamming, but I’ve not been able to see the details from the drawing, because the drawings were not clear at that stage.

…

Mr Pao: Prof Lee, you mention those two paragraphs in the patent, and you said that it’s by rotating the casing, that in turn will take the wedge and then twist and break the pile, is that what you are saying?

A. It’s not rotating, but because the wedge has been placed – originally, I think, in the beginning -- the wedge is placed between the pile and the internal face of the casing. So, when the casing starts to rotate, then this is going to cause the wedge to be jammed in between the space between the pile and the casing. Then, when you continue to rotate the casing, then it is going to bring in the wedge to break the pile, because the rotation will try to bring the wedge in, into the space.

Q. I see. Is this something that the Japanese gentleman told you?

A. No.

Q. It’s not?

A. As I said, basically I have looked at from the video.

Q. From the video?

A. But I mean, reading here, as I said, in particular without the diagram and so on, I was not very clear how this is going to work.

Q. So it was from the video supplied to you by these Japanese gentlemen that you saw that it was in fact the rotation of the casing, and then the subsequent part you –

A. Then I agree with the concept here or the idea here that this is one of the ways to break a pile.

Q. I see.

His Lordship: If you look at the diagram -- I don’t know how it works. For example, the bored pile, item 1.

A. Yes.

His Lordship: How does it show the jamming?

A. That’s what I mean, in the very beginning, when I, in particular, without any clearer picture and so on, by looking at this alone I have difficulty in understanding the whole concept, because now, my understanding is that the wedge which is number 2 is to be inserted next to – originally next to the piece of the pile, and then the rotating of the casing tries to bring in the wedge 2 into the space, and that’s why in figure 2 --

His Lordship: It’s more like a cutting method, cut to the pile, used it to --

A. Now this wedge, when we – I mean, a wedge is not of a, say, rectangular section, whatever, because you need to start to get into some of the gaps, some of the smaller spaces, and then gradually -- so the wedge is normally made with, say, some of the edges which are --

His Lordship: Wedge?

A. – quite thin. Yes, so that you are able to chip into the space, because the space between the casing and the cut portion of the pile inside the casing is not that big. Then, if we just use a thick wedge right in the beginning, there is no way that the wedge is able to wedge into the space.[27]

Q. … But you subsequently said that after watching the video, you were told that the method has been successfully carried out somewhere, in Hong Kong or somewhere, you began to think a bit deeper and you said that was possible. Then what was not clear to you at that time was resolved.

A.  Basically, what was not clear is that I think, just like now, there’s a lot of things in the patent, the diagrams, et cetera, is not that clearly written out and correlated.  So just by reading that alone, without thinking very deeply, then I got the impression that it may not be easily carried out in Hong Kong, but later, when I am required to think much deeper on this and able to get more information on this, I have been able to develop the sort of thinking and the sort of idea that I have tried to draw out and produce here.[28] ”

93.  In our view, the passages quoted above bear out amply the findings of the Judge that the Patent does not specify in clear terms that the wedge is being used as a jamming device; that there is confusion as to what causes the wedge to rotate inside the casing; that the shape of the wedge – whether it is used as a jamming or cutting device – is another source of confusion; that the diagrams are causing confusion; and that the method does not work for bored piles. 

94.  Mr Wong SC provided to the court a table giving all the relevant references in the transcript of the evidence of both expert witnesses that go to support the six factors discussed by the Judge as causing insufficiency.  We do not propose to quote the other references.  We have read and considered those relevant parts of the transcript.  It is apparent from those extracts that both experts had difficulties in understanding the invention as described in the specification and illustrated in the diagrams and how the invention was meant to work.  In gist, Dr Yeung did not understand the method in the Patent.  Professor Lee was of the view the Patent teaches the rotator and wedge method.  However, he was able to work out how the invention worked only after he had watched a video showing the method, something not available to the notional skilled addressee. And, to add to the confusion, Mr Sugisaki gave evidence explaining the rotator and wedge method which was different from the understanding of both experts[29], as the Judge had observed in §172 of the Main Judgment.

95.  We see no basis to interfere with the Judge’s analysis and assessment of the evidence.

E.6 If the Judge had failed to consider pertinent matters

96.  The complaints here are that the Judge did not mention Professor Lee’s 1^st supplemental report and those parts of SNE’s written closing submission responding to Hsin Chong’s pleaded case on insufficiency.  There is nothing to these complaints.  The fact that the Judge made no reference to those matters in his judgment of 98 pages does not mean he had not considered them.

97.  Professor Lee was cross-examined extensively on his 1^st supplemental report.  It is a matter for the Judge whether he should attach any weight to that report in light of the oral testimony of Professor Lee.

98.  As to the written closing submission of SNE, insofar as references were made in the submission of those parts of the evidence of Professor Lee and Dr Yeung that the Judge should consider, the Judge had quite clearly reviewed their evidence when he identified the six factors which gave rise to insufficiency.  He did not need to deal with the submissions made on the evidence specifically. 

F. Section 129(1)

99.  In Hong Kong, there are two types of patent, namely, standard patent and short-term patent.  The latter is unique to Hong Kong.  Section 115 of the Patents Ordinance provides for the examination by the Registrar as to the ‘formal requirements’ of the application process to establish the inventiveness of the short-term patent.  It can hardly be challenged that, unlike a standard patent, a short-term patent only requires a formality examination on its application.  The documents that are required to be submitted are first, a specification which includes claims (section 113(1)(b)) and a search report which provides information to users on whether the short-term patent under application is new or in technical terms a prior art (section 113(1)(d)).  Yet the short-term patent will provide the same monopoly (other than its duration) as a standard patent which requires detailed search and examination on its application.  As Aldous J observed in Helitune Ltd v. Stewart Hughes Ltd (Amendment of Pleadings) [1991] RPC 78 at 81, it is in the public interest that the validity of a patent which confers a monopoly is properly inquired into.  It is in this context that one construes section 129(1), applying the purposive approach in the construction of a statute.

100.  Section 129(1) of the Patents Ordinanceprovides that:

“ In any proceedings before a court for the enforcement of rights conferred under this Ordinance in relation to a short-term patent –

(a) it is for the proprietor of the patent to establish the validity of the patent, and the fact that the patent has been granted under this Part shall be of no account in that regard;

(b) evidence by the proprietor which is sufficient to establish prima facie the validity of the patent shall in the absence of evidence to the contrary be sufficient proof of such validity.”

101.  The Judge held that:

“209. As I see it, s 129(1) is a very important provision which makes the enforcement of a short-term patent different from that of a standard patent. Because the application has not undergone a detailed search and examination process, s 129(1) places the ultimate burden of proving the validity of a short-term patent on the patentee. However, s 129(1)(b) also stipulates that evidence by the proprietor which is sufficient to establish prima facie the validity of the patent shall, in the absence of evidence to the contrary, be sufficient proof of such validity. In my judgment, if the alleged infringer has not put forward evidence to the contrary, for example evidence challenging the novelty of the patent, then the patent is prima facie valid.”

102.  In our view section 129(1)(a) addresses two issues.  First, it is for the patentee to establish the validity of the patent in proceedings for the enforcement of the patent.  This is clear from the wording of that section.  Second, in order to establish this validity, the granting of the patent itself is expressly excluded for consideration because of the wording ‘the fact that the patent has been granted under this Part shall be of no account in that regard’.

103.  The point that needs to be emphasised is that there is one and only one burden throughout in such proceedings, namely, the burden of establishing validity and that lies on the patentee.  It is also important to bear in mind the distinction between legal and evidential burden. The burden imposed on the patentee under section 129(1)(a) is clearly a legal burden.

104.  Section 129(1)(b) then deals with the way in which that burden can be discharged.  The steps leading to the discharge of this burden is by way of evidence.  This must be a reference to the evidential burden imposed on the patentee for the purpose of discharging the legal burden of establishing the validity of the patent.  The patentee must provide prima facie evidence of the validity of the patentee.  That prima facie evidence of validity again cannot be the patent itself because otherwise the exclusion provision under section   129(1)(a) will be meaningless.  Further, as Mr   Stewart Wong rightly submitted, the existence of the search report which had been filed at the time of the application cannot by itself be treated as the required prima facie evidence of validity.  Rather the question is whether the content of the search report is sufficient to support prima facie validity of the patent.  If the patentee is able to provide prima facie evidence, then, in the absence of evidence the contrary, he has discharged the evidential burden of proving the validity of the patent.  Further, if the matter rests there, the patentee has also discharged the legal burden as well.  In the words of section 129(1)(b) it is ‘sufficient proof of such validity’.  In our view it is best to avoid describing the effect of such a situation (as the Judge did) as ‘the patent being prima facie valid’.  The words ‘such validity’ in section 129(1)(b) refer to the validity of the patent and not simply its prima facie validity.

105.  The defendant who wishes to challenge the patent may adduce contrary evidence pertaining to the invalidity of the patent.  This remains to be an evidential burden only on the part of the defendant because the legal burden of establishing validity of the patent remains with the patentee.  The legal burden will be discharged by the patentee if he can successfully show that there is no substance in the contrary evidence adduced by the defendant. 

106.  Mr Clark submitted that section 129(1)(b) requires the patentee to provide evidence sufficient to establish prima facie the validity of the patent.  It is not a high threshold and is satisfied by (a) the patent being in force (b) the patent on the face of it being drafted correctly (e.g. with claims) and (c) provision of a search report that complies with section 113(8) and Rule  72 of the Patents (General) Rules. Thereafter it is for the defendant(s) to plead (pursuant to Order 103, rule 21) and prove ‘by evidence to the contrary’ any invalidating prior art or other ground of invalidity.  He submitted that the Judge was wrong to hold that the patentee bore an ‘ultimate burden’ of proving validity.  On a correct reading of section 129(1) there is no ‘ultimate burden’ on the patentee.  Once the patentee establishes prima facie the validity of the patent, the defendant bears the burden of proving invalidity.  The effect of finding the patentee bears an ‘ultimate burden’ is to render section 129(1)(b) otiose.

107.  In view of our analysis of section 129(1), Mr   Clark’s submission must be rejected.  Further as the Judge had found the search report was defective (and from which no appeal is made) it cannot be relied upon by SNE as prima facie evidence of the validity of the patent.  However, as observed by this Court during the hearing, the Judge did not decide on the invalidity of SNE’s patent simply by way of burden of proof but rather after due consideration of the evidence adduced in this case.

108.  There is criticism by Mr Stewart Wong that the last passage in §209 of the judgment seems to suggest that if the defendant has not pleaded and adduced evidence of invalidity, the patent is prima facie valid.  We disagree.  We do not consider that that was the intention of the Judge.  The whole of §209 must be read together and the Judge in the earlier part had clearly identified the need for the patentee to adduce prima facie evidence on the validity of the patent.

109.  The next issue is on the requirement on the part of the defendant to supply particulars of objection under Order 103, rule 21 of the Rules of the High Court.  The Judge held that the defendant must plead the particulars of objection and then adduce contrary evidence according to these particulars. 

110.  Mr Stewart Wong argued that Order 103 does not apply to the current Patents Ordinance which introduced the short-term patent.  He submitted that Order 103 only applies to the repealed Registration of Patents Ordinance which was effective before 1 July 1997 when it was replaced by the current Patents Ordinance. Reliance was placed on Re Wui Loong Scaffolding Works Co Ltd [2002] 1 HKLRD 166.

111.  We do not agree with Mr Stewart Wong about the restricted ambit of Order 103.  This will be contrary to the spirit of the Civil Justice Reform which clearly requires the parties to identify the issues in dispute in order to achieve an efficient and speedy disposal of the proceedings.  Re Wui Loong Scaffolding Works Co. Ltd was decided before the reform.  Even if Order 103 may not be directly applicable to short term patents by reason of its title and the definitions in Order 103 rule 1, the requirements to give particulars in Order 103 rule 21 (as in the case of Order 103 rule 20) are merely specific application of Order 18 rule 12 to the context of a patent action.  In light of Order 1A rules 1 to 3, in our view the Judge was correct on the requirement to give particulars of objection.

G. Novelty and obviousness

G1. Obviousness

112.  The Judge’s conclusions on obviousness based on the Brochure were set out at §§221 and 222 of the Main Judgment, which we have quoted above.  Mr Clark submitted that the Judge made a finding of fact in favour of SNE at §222 and there was no basis for this court to interfere with such finding.

113.  With respect, it is plain from a proper reading of §222 that the Judge only reached his conclusion that the method in the Patent was not obvious to a person skilled in the art after studying the Brochure on the premise that the Patent did not set out sufficient particulars to enable a skilled person to work out the patented process.  Had the Judge reached a different conclusion on sufficiency and the Patent validly patented the rotator and wedge method, he would have held that the patented method was obvious to a skilled person after studying the Brochure, see §221.  This reading of the Main Judgment is consistent with the overall tenor of the Judge’s discussion on the Brochure at §§215 to 219.  What he said at the latter part of §219 is relevant:

“ The description of the method in the Brochure also lacks these key concepts, but the Brochure actually gives a better description of something like the rotator and wedge method because it refers to the rotation of the casing together with the hammer grab (though hammer grab may not serve very well as a jamming device) which is not mentioned in the specification of the Patent itself.”

114.  We do not accept Mr Clark’s submission that the Judge had misapplied the skilled person test at §221 by referring to what Mr Clark paraphrased at one stage as the “highly skilled person”.  The Judge was clearly aware of the difference in the application of the skilled person test in the context of sufficiency and the application of that test in the context of obviousness.  He made reference to the judgment of the English Court of Appeal in Schlumberger Holdings Ltd v Electromagnetic Geoservices AS [2010] RPC 851 in which Jacobs LJ reviewed at §§33 to 65 the relevant authorities and explained at length how the test is to be applied in these two contexts.  However, in the context of the present case, where the subject matter of the Patent is not a complicated scientific invention (in Mr Stewart Wong’s words “not rocket science”) involving experts from different fields and in the absence of evidence suggesting ground-breaking nature of the patented method as compared with that depicted in the Brochure, we cannot see any flaw in the Judge’s approach at §221 bearing in mind what was said in earlier paragraphs regarding the method in the Brochure and the rotator and wedge method.

115.  In light of our conclusions in Section E on the invalidity of the Patent due to insufficiency, we find ourselves to be in the same position as the Judge.  Given that Hsin Chong and Chim Kee in §2 of their respective Respondent’s Notice only advanced this ground in the event that this court reversed the Judge’s conclusion on insufficiency, it is not necessary for us to express a concluded view on this point. Nor would we rely on this ground to determine the outcome of this appeal.

116.  We should perhaps explain why we indicated that if the point shall become relevant for the disposal of the appeal we would remit the question of obviousness to the court below notwithstanding the views of the Judge in §221.  Whilst there was evidence from the cross-examination of Professor Lee by Mr Philips Wong which supported the defence case of obviousness, Mr Stewart Wong fairly accepted that there was subsequently evidence from the Professor Lee in the opposite direction.  No doubt because of his primary conclusion of invalidity based on insufficiency, we do not have the benefit of the Judge’s analysis of such evidence in the Main Judgment.  Nor have we been directed to such evidence in the written submissions placed before us.  In any event, it would not be appropriate for this court to take on the task of the first instance judge to weigh the evidence of the experts on paper on such a controversial and technical issue.

G2. Disclosure to personnel involved in the project

117.  In Coco v AN Clark (Engineers) Ltd[1969] RPC 41 at 48, Megarry J said:

“ … where information of commercial or industrial value is given on a business-like basis and with some avowed common object in mind, such as a joint venture or the manufacture of articles by one party for the other, I would regard the recipient as carrying a heavy burden if he seeks to repel a contention that he was bound by an obligation of confidence.”

118.  In light of this statement of the law[30], which in our view remains good law, it was fairly and realistically accepted by Mr Stewart Wong that but for the representation by the Japanese parties at the meeting of 14 January 2010, the defendants bear a heavy burden to repel SNE’s case of confidence in respect of disclosure made in the course of negotiations and execution of works under the sub-contracts.  Mr Philips Wong did not suggest otherwise.

119.  Hsin Chong and Chim Kee however submitted that in the present case the position is different because of the representation. As we have mentioned, the Judge accepted this submission and the crucial aspect of his reasoning on this part of the case was set out at §§232 and 233 of the Main Judgment quoted above.

120.  In this appeal Mr Clark submitted that the Judge erred in making the finding that the representation was made.  Further, counsel submitted that even if the representation had been made, it did not amount to a negation of the implied duty of confidence.

121.  With respect, we are not persuaded by Mr Clark that this is a case where this court can reverse the Judge on his finding of fact on the making of the representation.  The matters relied on by Mr Clark do not take SNE’s case anywhere near to showing that the finding of primary fact by the Judge was plainly wrong[31].  None of the items of evidence to which Mr Clark drew our attention are inconsistent with the Judge’s finding.  And those items cannot be considered separately from the overall weight of evidence which the Judge clearly had in mind.  Mr Clark’s approach appears to be picking on isolated pieces of evidence which was in favour of his case without regard to the other evidence which the Judge had referred to.  With respect, that approach is wholly inappropriate in an appeal.  For the reasons given in the authorities cited in the preceding footnote, this court cannot simply take a snapshot picked from a whole spectrum of evidence or a particular document amongst many others to draw a different  conclusion on the primary findings of fact by the primary judge.

122.  The evidence identified by Mr Clark included an email of 21 October 2011 which counsel had drawn to the attention of the Judge in light of the Judge’s query in closing submissions.  Mr Clark submitted that the Judge failed to have regard to that piece of evidence in making the factual finding on the representation.  Though it would be better had the Judge given some explicit reference to that email in the Main Judgment, we do not think the email itself was so critical in the overall context that the omission to refer to it can be taken as the Judge’s failure to have regard to it in his weighing of the evidence.  In our view, the email is only of peripheral significance on a subsidiary issue.  As Lord Hoffmann observed in Biogen Inc v Medeva plc [1997] RPC 1 at p.45, findings of fact are inherently an incomplete statement of the impression which was made upon a judge by the primary evidence.  The giving of adequate reasons does not require a judge to identify and comment upon each and every piece of details in the evidence no matter how peripheral it is, see English v Emery [2002] 1 WLR 2409 at §§17 to 19.  In the present case, in light of the scale of the litigation and the complexity of the issues involved and bearing in mind the state of the court’s diary, we are of the view that the Judge delivered his Main Judgment within a reasonable time after the closing submissions.  Since the email was specifically referred to in the closing submissions, and there was ample evidence of greater cogency before the Judge on the factual dispute in respect of the representation, and in view of the very cogent reasons given by the Judge for his findings on such dispute, we do not regard the absence of reference to the email as warranting this court to reject such findings.

123.  The same observation can be applied towards the other matters Mr Clark relied upon.  The other statements by Hsin Chong about the innovative nature of the method and the wordings in the plea in the Particulars of Objection[32] are even more peripheral than the email. The forensic point about absence of discovery of internal emails within Hsin Chong on the discussion at the meeting of 14 January 2010 is, in our view, again a matter of little moment in the overall context.

124.  In connection with this aspect of the case, we do not accept Mr Clark’s contention that the Judge should not make such finding when the representation had not been put to Mr Sugisaki in cross-examination. There could not be any doubt that Hsin Chong’s case about the representation was known to counsel for SNE and Mr Sugisaki well before the trial.  It was in the witness statement of Mr Frankie Lam filed on 7 March 2013.  Mr Sugisaki had dealt with the meeting of 14 January 2010 in his supplemental statement of 28 August 2013.  He said he was discussing different methods.  He maintained his version when he gave evidence at the trial.  Hence the evidence of the parties was on two different scenarios and the Judge preferred the evidence of Hsin Chong.  As submitted by Mr Stewart Wong, the putting of Hsin Chong’s case on representation would only be formal in the circumstances.

125.  We do not see sufficient ground for us to disturb the findings by the Judge as to the making of the representation at the meeting of 14 January 2010.

126.  The issue is therefore reduced to this question: whether the making of such representation has the effect of placing Hsin Chong and Chim Kee in a position free in law and equity to make use of the information as held by the Judge.  With respect, we cannot agree that the representation had such effect.  The disclosure by the SNE was made to Hsin Chong and Chim Kee in a business setting and it was clearly information of commercial or industrial value.  Whilst there was no express contractual confidentiality provision specifically governing the disclosures (outlined by the Judge at §224 of the Main Judgment), it is not disputed that such absence is not critical.  The evidence also shows that the parties regarded their relationship as one of confidence. Apart from the MTRC Code which Mr Clark relied upon, clause 13.1 of the sub-contracts between Hsin Chong and SNE was also a confidentiality provision.  Mr Stewart Wong submitted that these provisions only imposed obligation of confidence on the part of the SNE in respect of information provided by MTRC or Hsin Chong, and as such not providing contractual protection in respect of information supplied by SNE to Hsin Chong.  However, they do provide the general background for characterizing the relationship between them.

127.  On this point, we agree with Mr Clark that the representation was not sufficiently specific to suggest to a reasonable recipient that the information disclosed by SNE was already in public domain in Japan.  A widely used method can be used under the cloak of confidence.  If that were so, the use would not have the effect of making it available to the public.  There was no evidence before the Judge on the parties’ understanding of the circumstances under which the method could have been used in Japan[33].

128.  We are not dealing with the question whether the method was actually widely used in Japan and if so, whether such use had the effect of invalidating the Patent.  This is not the contention of the defendants.  Instead, their contention is that by reason of the representation (irrespective of what actually happened in Japan), Hsin Chong and Chim Kee reasonably laboured under the apprehension that the disclosures made by the SNE were not confidential. 

129.  Mr Stewart Wong (whose arguments in this respect were adopted by Mr Philips Wong) submitted that the correct test is the notice of confidentiality test, viz whether the circumstances in which the information was acquired or received indicate (objective) knowledge or notice of the confidentiality of the information[34]. Gurry on Breach of Confidence 2^nd Edn §7.03 identified a number of factors which could be relevant: the nature of the information, the steps taken to preserve or emphasize the secrecy of the information, the manner in which the information was disclosed or obtained, the understanding of the parties involved, the specific or limited purpose for which the information was disclosed in the legal and cultural context of the disclosure.

130.  Mr Clark did not argue for a different approach and we accept the notice of confidentiality test as good law.

131.  The test is to be applied by reference to the knowledge or notice of an objective reasonable recipient, in the assessment of which the subjective views of the parties could be taken into account.  This is the view preferred by Gurry on Breach of Confidence 2^nd Edn §7.39 and Mr Wong supported this view.  Again, we do not understand Mr Clark to be contending otherwise.  We respectfully adopt this approach which was summarized by Knox J in De Maudsley v Palumbo [1996] FSR 447 at 457:

“ The test in my view is objective --- the question is were the circumstances such as to import a duty of confidence and, if so, the obligation is not to be avoided simply by not addressing the problem. On the other hand I accept that a factor, and it may be an important factor, is whether the parties did in fact regard themselves as under an obligation to preserve confidence, just as is a proven trade or industry usage in that regard but I do not accept that the test is exclusively subjective as to the parties’ intentions.”

132.  Mr Stewart Wong submitted that applying the notice of confidentiality test, in light of the making of the representation with none of the Japanese party at the meeting or any other time expressly raising the question of confidentiality, objectively speaking, a reasonable man in the shoes of Frankie Lam, or anyone from Hsin Chong (and, Mr Philips Wong said, Chim Kee as well) would not have notice or knowledge, or taken to have agreed, that the method was confidential so that he ought to have kept it that way.

133.  In light of the position taken by leading counsel for SNE at the trial as recorded by the Judge at the last sentence of §233 of the Main Judgment[35], the Judge did not need to go through an analysis of how a reasonable man in the shoes of Hsin Chong or Chim Kee would have regarded the confidentiality of information disclosed by the Plaintiff.  In this appeal, Mr Clark apparently retracted from the position previously taken by his leader at the trial. Before us, Mr Clark contended that even if the representation had been made (as found by the Judge), it could not be equated with a representation that the method was in the public domain.

134.  Though we agree with Mr Clark as far as the effect of the representation per se is concerned, we do not think this conclusion completely resolves the question of confidentiality in favour of SNE.  As highlighted by Professor Gurry, there are a number of relevant factors in the application of the notice of confidentiality test.  Because of the stance taken by leading counsel for SNE at the trial, the argument on confidentiality in this part of the case was reduced to that single factual question of whether the representation had been made.  In light of our conclusion, it is not the right approach.  There was evidence before the Judge in respect of the other factors, some of which (like the nature of the information and the occasions in which the disclosure were made) pointed towards confidentiality.  At the same time, there was evidence before the Judge pointing to the other direction: in particular the evidence on the understanding of the parties, see §§243 to 247 of the Main Judgment.  Further, there were aspects on how Hsin Chong had used the information which the Judge did not discuss at length in the Main Judgment, see §251. 

135.  Counsel did not address us on these matters in the appeal and if this issue is critical to the outcome of this appeal, we would have invited further written submissions on the point and considered remitting this issue to the court below.  However, in view of our conclusions on the other issues, the appeal can be determined without us reaching a final view on this issue.  In the circumstances, we are content with leaving the point without reaching a final conclusion on confidentiality in the disclosure by SNE to Hsin Chong and Chim Kee.

G3. Disclosures to operators of Chim Kee

136.  At §250 of the Main Judgment the Judge drew a separate conclusion on the disclosures to the operators of Chim Kee whom SNE had trained in respect of the method.  The Judge took the view that SNE should take the necessary precaution against a “low-level participant” like Chim Kee (as supplier of machinery) and in the absence of any warning or express confidentiality agreement the court would not impose an obligation of confidence on the operators.  Mr Clark submitted that the Judge erred in this respect as employees or sub-contractors are subject to an obligation of confidence, citing Gurry on Breach of Confidence 2^nd Edn §9.04.

137.  If the Judge had decided this point on the basis of a proposition of law that there could not be any implied duty of confidence in the absence of express warning or contractual confidentiality provision in respect of workers engaged by machinery suppliers, we would have respectfully disagreed.  In our judgment, the notice of confidentiality test is as applicable to a crane operator engaged by a machinery supplier as others. 

138.  But we do not think the Judge laboured under such misapprehension of the law in §250 of the Main Judgment.  In that paragraph, the Judge considered whether there should be any implied duty of confidence in the circumstances of the operators on the facts of the instant case.  He said it was very difficult (not impossible as a matter of law) to argue for a general duty of confidence vis-à-vis a machinery supplier. Therefore, the relevant question is whether the Judge misapplied the notice of confidentiality test in respect of the operators of Chim Kee. 

139.  In relation to that question, it should be borne in mind that the operators were trained by SNE concerning the operation of the method.  Though there was no evidence on the precise scope of training, Mr Clark submitted before us (in the context of his argument on infringement by Chim Kee as joint tortfeasor) that the operations carried out by those operators were key parts of the method.  At §250 of the Main Judgment, the Judge appeared to focus on the absence of express contractual provision or warning on confidentiality without discussing whether the circumstances of the training could give rise to notice or knowledge of confidentiality. 

140.  On the other hand, Mr Philips Wong made a valid point in submitting that there was no evidence showing that a reasonable operator in the shoes of the operators of Chim Kee would have appreciated that the information provided by SNE to them during the training were confidential. Mr Tang on behalf of Chim Kee gave evidence to the contrary[36]. Mr Clark did not take us to any evidence pointing otherwise.  Thus, the overall picture emerging from the evidence is this: as far as those operators were concerned, they were tasked with operating the machinery as in other sites and they had no reason to suspect that the method used by SNE was novel or confidential.

141.  There is no proposition of law that everything learnt or observed by an operator of machinery during the course of works at a construction site should be regarded as confidential.  Gurry on Breach of Confidence 2^nd Edn §9.04, cited by Mr Clark, does not support such a wide proposition.  Neither do the other cases cited by him[37]. As held in Faccenda Chicken Ltd v Fowler [1987] Ch 117, in general an employee is free to use his skill and knowledge acquired in the course of his employment (as part of his stock in trade) for other purposes after the end of the employment.  In our judgment, the same can be said with regard to the general position of an operator of machinery working at a construction site. It must therefore depend on the circumstances and what the operator had been told during the training and progress of works.  The notice of confidentiality test involved a multi-facet assessment instead of focusing on the nature of the relationship between the parties. 

142.  In the circumstances of the present case and in light of the absence of specific evidence which Mr Clark could pinpoint to support his case on confidentiality, and in light of the evidence which Mr Philips Wong drew to our attention, we are not persuaded that the Judge had come to a wrong conclusion at §250 of the Main Judgment.  In other words, like the Judge, we hold that the operators of Chim Kee were free to disseminate whatever they learnt and observed during the course of training and works at the site. 

143.  Whether the disclosures to these operators per se would be qualified as enabling disclosures has not been considered separately by the Judge.  However, it would at least be as extensive as whatever information a member of public could observe outside the site.  The Judge held the latter to be enabling and the necessary implication is that the disclosures to the operators are also enabling.  In light of that, Mr Clark’s submission that the Judge erred at §225 of the Main Judgment in wrongly assuming that SNE did not dispute that the method was made available and disclosed to all the personnel and workers is not a matter of any moment. 

144.  Hence, the Judge was correct in holding that the disclosures to the operators of Chim Kee were sufficient to invalidate the Patent by making the method available to the public.

G4. Disclosure to the public by observations around the site

145.  Before us, Mr Clark accepted that the features of the pile removal works identified by the Judge at §260 of the Main Judgment could be observed by members of the public.  Counsel however challenged the Judge’s finding that such observations were enabling disclosure.  He submitted that because of what members of the public could not observe in respect of what happened inside the casing, the observations could not be regarded as making the method available to the public.  He also submitted that the Judge should not rely on Dr Yeung’s evidence to conclude that a skilled person could work out the method by these observations.

146.  It is common ground that the correct approach in assessing whether a method has been made available to the public was set out by Aldous J in Lux Traffic Controls Ltd v Pike Signals Ltd [1993] RPC 107 at 134:

“ … In the case of a machine it is that machine which is made available and it is irrelevant whether it is operated in public. A machine like a book can be examined and the information gleaned can be written down. Thus, what is made available to the public by a machine … is that which the skilled man would, if asked to describe its construction and operation, write down having carried out an appropriate test or examination. To invalidate the patent, the description that such a man would write down must be a clear and unambiguous description of the invention claimed.”

147.  In the present appeal, we are not concerned with a patent in respect of a machine.  Instead, we are concerned with a method.  Still, the principle is the same.  If the notional skilled man could write down what he could observe at the site (including those features identified by the Judge) and then worked out a clear and unambiguous description of the method, the use of the method at the site would constitute prior art.

148.  Mr Stewart Wong rightly reminded us that it is a notional exercise and it is not necessary for a defendant to show that such an exercise had actually been carried out.  In Availability to the Public GO1/92 [1993] EPOR 241, the Board held that it was not necessary to show that the public had particular reason for conducting such a notional exercise.  At p 243, the following was said:

“ It is the fact that direct and unambiguous access to some particular information is possible which makes the latter available, whether or not there is any reason for looking for it.”

149.  This passage was cited by Jacob J in Milliken Denmark AS v Walk Off Mats Ltd [1996] FSR 292 at 310. 

150.  The Judge considered the argument that members of the public could not observe what happened inside the casing at §259 to 261 of the Main Judgment.  In a nutshell, the Judge, based on the evidence of Dr Yeung, found that a skilled person only needs to refer to what could be observed (as identified at §260 of the Main Judgment) to work out the method. 

151.  Mr Clark contended that the Judge was wrong to describe the twisted piles as a unique feature of the method (at §§261 and 266 of the Main Judgment).  Mr Stewart Wong took us to the relevant part of the evidence of Mr Frankie Lam[38] to support the Judge’s finding.  We agree that there was ample evidence in that regard and Mr Clark failed to persuade us that the Judge was plainly wrong in that regard.

152.  Mr Clark then submitted that the Judge should not accept the evidence of Dr Yeung because Dr Yeung’s evidence was an answer to a leading question when he was cross-examined by Mr Philips Wong and he gave a different answer when he was cross-examined by Mr Clark.  We were taken to the relevant parts of the transcripts[39].  Mr Wong’s question was by reference to observation as to the machinery set up at the site, the wedge and hammer grab dropped into the casing and the twisted piles pulled out afterwards.  Dr Yeung said he could pretty much work out the method by such observations.  He maintained that answer when Mr Clark asked him a simplified version of a similar question for the first time.  Slightly later on, Mr Clark put to him that he would not be able to tell the method just by looking at the equipment and the pile that was twisted.  Dr Yeung responded by saying that he would not know the full details without explanation from the site staff. 

153.  Putting aside the fact that Mr Clark’s question did not quite encapsulate all the elements alluded to in Mr Philips Wong’s question, the Judge had to assess the evidence on a global basis.  As we have observed, this is not a particularly complicated piece of invention.  The ground breaking element in the method is the use of wedge or wedges to jam the pile so that it would be broken by being twisted in the course of the rotation of the casing.  After hearing the evidence, including the evidence of the expert witnesses, the Judge made these observations at §§261 and 262 of the Main Judgment:

“ … As I mentioned above, one of the unique features of the rotator and wedge method is the shape of the pile extracted with this process. No method commonly used in the trade would be able to extract a pile twisted like that. Hence, the shape of the twisted pile would give a big clue about the operation of the process. Being persons skilled in the art, they should be able to figure out that the wedge is being used as a jamming device and as a result the pile is twisted in such manner.”

… However, members of the public would be able to learn more about the process by the observation.  Firstly, they would be able to know that the rotation of the rotator would play an important part in the process, whereas the Patent does not specifically state that what causes the wedge to rotate inside the casing.  Secondly, as mentioned above, the unique shape of the twisted pile would be able to teach persons skilled in the art that the wedge is being used as a jamming rather than a cutting device as some would understand it by reading the Patent itself.”

154.  The Judge assessed the evidence of Dr Yeung against these backgrounds and, in our judgment, he was entitled to come to the conclusion he did notwithstanding Mr Clark’s criticism of his evidence.  It is also clear from this analysis that the Judge did not abdicate his function by taking Dr Yeung’s answer to a leading question at its face value without assessing the same.  In donning the mantle of the notional skilled person, the Judge could and should take account of the expert evidence before the court. 

155.  There is also no merit in Mr Clark’s submission that the Judge had wrongly viewed a video at the invitation of the 2^nd Respondent.  The transcript clearly shows that the Judge had rejected that request.

156.  On the whole, we do not see any valid ground for interfering with the Judge’s finding that the notional skilled person could work out the method by matters which he could observe at the site as a member of the public.  We uphold the Judge’s conclusion that the Patent is also invalid on this ground.

H. Chim Kee as joint tortfeasor

157.  The statement of claim of SNE pleaded that:

“ 6. [Hsin Chong and Chim Kee] have carried out the acts referred to in the Particulars of Infringement served herewith. By carrying out such acts [Hsin Chong and Chim Kee] have infringed the Patent and have thereby caused [SNE] loss and damage.”

158.  The particulars of infringement are pleaded as follows:

“ [SNE] is a subcontractor to [Hsin Chong] on MTR Express Rail Link 802 Contract. [Chim Kee] was a supplier of materials and machines to [SNE]. Since 26 July 2012, [Hsin Chong] has taken over the majority of pile removal work at the Site from [SNE] and engaged [Chim Kee] directly to assist with the work. [Hsin Chong and Chim Kee] continue to use the method which [SNE] had been using on the site, such method being the method claimed in the Patent.”

159.  Apart from the finding on Chim Kee identified in §33 of this judgment, the Judge also made the following findings:

“ 272. Further as between September 2010 and July 2012, Chim Kee supplied machinery and operators of the cranes and excavators to SNE and the only agreements between them were the rental quotations and rental agreements issued by Chim Kee. After the termination of the rental relationship between SNE and Chim Kee, Chim Kee supplied machinery and operators of the cranes and excavators to Hsin Chong at the Site and the only agreements between them were those rental quotations issued by Chim Kee.”

160.  Section 73(b)(i) of the Patents Ordinance provides:

“ A patent while it is in force shall confer on its proprietor the right to prevent all third parties not having his consent from doing in Hong Kong all or any of the following-

(a) ―

(b) in relation to any process which is the subject-matter of the patent-

(i) using the process; or

(ii) ―”

161.  A person may infringe the patent by way of direct infringement in using the process or he had participated as a secondary party in the acts of infringement so as to make itself a joint tortfeasor. Under Hong Kong law which applies the English law, the test for such secondary liability is whether the acts were done pursuant to a common design so that the secondary party has made the acts his own : Sabaf SpA v MFI Furniture Centres Ltd [2005] R.P.C. 10. at paragraph 39 per Lord Hoffmann.  As can be seen from the particulars of infringement pleaded by SNE, SNE was alleging a case of direct infringement by Chim Kee.  However at the trial SNE submitted that it was relying both on direct infringement and infringement by Chim Kee as a secondary party pursuant to a common design in that Hsin Chong and Chim Kee were acting together to remove the piles, Hsin   Chong was using the method with overall supervision and both of them were participating directly in this act. 

162.  It is clear that common design must be pleaded, see judgment of Deputy High Court Judge Kwan (as she then was) in Anheuser-Busch v Budejovicky Budvar (unrep.) HCA 11095/1999 at page 20 (Judgment dated 4 October 2000). 

163.  The Judge rejected SNE’s claim on direct infringement by Chim  Kee.  He held that SNE must plead common design if it wished to make Chim Kee a secondary party as a joint tortfeasor.  In any event he also rejected SNE’s contention that Chim Kee was a secondary party.  This is how the Judge dealt with the matter:

“ 274. I agree with Mr Wong [Philips] that in order to infringe a particular claim in a patent, the alleged infringer must have committed all of the steps claimed in the relevant patent. The monopoly is limited to the use of the entire process. Yet, there is no evidence to show that the operators of Chim Kee were involved in all of the steps above. In particular, Chim Kee’s operators were only responsible for the operation of the cranes and the excavators. The operators of Chim Kee were not responsible for sinking the steel casing into the ground nor driving the circular wedge to move around the pile. As SNE has failed to prove that Chim Kee had committed each of the steps claimed in the relevant claim, its claim against Chim Kee must fail.

275. If the alleged infringer is only responsible for carrying out part of the work of the alleged patented process, he may be liable as a joint tortfeasor for infringing the patent if there was a common design and he has committed a [tortious] act in furtherance of that common design. However, no such plea has been made in the Statement of Claim. Ms Tam [counsel for SNE] relies on the case of Unilever Plc v Gillette (UK) Ltd and argues that a case of joint tortfeasance needs not be specifically pleaded. However in Unilever, the claim of joint tortfeasance was specifically pleaded in the proposed amendment to the Statement of Claim and the particulars in support of the case of joint tortfeasance were specifically provided. In fact, the importance of pleading a proper case of joint tortfeasance was emphasized throughout in the first instance judgment by Falconer J and the appellate judgment of the English Court of Appeal. The importance of properly pleading a case of joint tortfeasance can also be seen in Belegging-En v Witten and Anheuser-Busch v Budejovicky Budvar.

276. In the present case, SNE has not pleaded a case of joint tortfeasance. It has not pleaded the common design or the “tacit agreement” and has not provided any particulars or evidence relied upon in support of the alleged common design. Neither Tang nor Frankie Lam has been cross-examined on such common design and the case of joint tortfeasance has not been put to any of the witnesses. In fact, SNE has not even mentioned the cause of action based on joint tortfeasance in its opening submissions. Hence, SNE should not be allowed to run such a case against Chim Kee in its final submissions.

277. Even if SNE has expressly pleaded such an averment, Chim Kee was only providing machinery to Hsin Chong for the works at the Site.  The operators of Chim Kee just performed the works according to the instructions given by the staff of Hsin Chong, and there is no evidence to show that the operators of Chim Kee were involved in the planning nor in the execution of all the steps involved in extracting the piles from the ground.  In such circumstances, I do not accept that Chim Kee has jointly infringed the Patent pursuant to a common design.”

164.  As rightly pointed out by Mr  Philips Wong for Chim Kee, there was no appeal by SNE against the Judge’s finding on direct infringement.  This Court is only concerned with the issue of whether the Judge was correct on his decision on joint tortfeasor.  In our view, first, as regard pleadings, the Judge was correct that SNE must specifically plead a case of common design on its claim against Chim Kee as a joint tortfeasor.  This was not done.

165.  But even proceeding on the basis that SNE had sufficiently identified the issue of common design, our view is that the Judge was plainly right in rejecting this contention against Chim Kee.

166.  Mr Clark relied heavily on the statement by Mustill LJ by Unilever Plc v Gillette (UK) Ltd [1989] RPC 583, at 609 that:

“ … I use the words ‘common design’ because they are readily to hand, but there are other expressions in the cases, such as ‘concerted action’ or ‘agreed on common action’ which will serve just as well. The words are not to be construed as if they formed part of a statute. They all convey the same idea. This idea does not, as it seems to me, call for any finding that the secondary party has explicitly mapped out a plan with the primary offender. Their tacit agreement will be sufficient. Nor, as it seems to me, is there any need for a common design to infringe. It is enough if the parties combine to secure the doing of acts which in the event prove to be infringements.”

167.  In our view, in terms of the principles in this area, one does not need to go beyond the judgment of Supreme Court in United Kingdom in Fish & Fish Ltd v Sea Shepherd UK & Ors [2015] 2 WLR 694 which reviewed leading authorities on joint tortfeasor such as C.B.S. Songs Ltd & Ors v Amstrad Consumer Electronics plc & Anor [1988] AC 1013; The Koursk, [1924]  P 140; Sabaf SpA; Unilever plc and many others.  As Lord Sumption JSC observed in paragraph 40 of the judgment, whilst the principles of joint tortfeasor had been mainly discussed in the context of accessory liability for the tortious infringement of intellectual property rights, these principles are in fact based on the ordinary principles of the law of tort.

168.  In Fish & Fish Ltd the claimant’s fishing vessel was attacked by a ship owned by the first defendant and commanded by the third defendant as part of the second defendant’s conservation campaign supported by the first defendant against illegal fishing of bluefin tuna.

169.  Lord Toulson JSC held that:

“ 21 To establish accessory liability in tort it is not enough to show that D did acts which facilitated P’s commission of the tort. D will be jointly liable with P if they combined to do or secure the doing of acts which constituted a tort. This requires proof of two elements. D must have acted in a way which furthered the commission of the tort by P; and D must have done so in pursuance of a common design to do or secure the doing of the acts which constituted the tort. I do not consider it necessary or desirable to gloss the principle further.”

170.  Lord Neuberger of Abbotsbury PSC observed at paragraph 55 that in order for the defendant to be liable to the claimant in such circumstances, three conditions must be satisfied:

(1) the defendant must have assisted the commission of an act by the primary tortfeasor;

(2) the assistance must have been pursuant to a common design on the part of the defendant and the primary tortfeasor that the act be committed; and

(3) the act must constitute a tort as against the claimant.

171.  In respect of the third condition, Lord Neuberger stated that:

“ 60 As to the third condition, it is unnecessary for a claimant to show that the defendant appreciated that the act which he assisted pursuant to a common design constituted, or gave rise to, a tort or that he intended that the claimant be harmed. But the defendant must have assisted in, and been party to a common design to commit, the act that constituted, or gave rise to, the tort. It is not enough for a claimant to show merely that the activity, which the defendant assisted and was the subject of the common design, was carried out tortiously if it could also perfectly well be carried out without committing any tort. However, the claimant need not go so far as to show that the defendant knew that a specific act harming a specific defendant was intended.”

172.  Lord Neuberger stated that there was no significant difference in the analysis of the law by himself, Lord Toulson and Lord Sumption whose judgment we will now refer. 

173.  In our view Lord Sumption’s judgment provides the key as to how the issue of accessory infringement or secondary infringement can be resolved.  He stated that:

“ 39 The principal concern of the law in this area is to recognise a liability for assisting the commission by the primary actor of a tort, while ensuring that the mere facilitation of the tort will not give rise to such a liability, even when combined with knowledge of the primary actor’s intention.…In reality, the limitations which the courts have placed on the scope of liability as a joint tortfeasor are founded on a pragmatic concern to limit the propensity of the law of tort to interfere with a person’s right to do things which are in themselves entirely lawful.”

174.  He emphasised the importance of intent:

“ 44 Intent in the law of tort is commonly relevant as a control mechanism limiting the ambit of a person’s obligation to safeguard the rights of others, where this would constrict his freedom to engage in activities which are otherwise lawful. The economic torts are a classic illustration of this. The cases on joint torts have had to grapple with the same problem, and intent performs the same role. What the authorities, taken as a whole, demonstrate is that the additional element which is required to establish liability, over and above mere knowledge that an otherwise lawful act will assist the tort, is a shared intention that it should do so. The required limitation on the scope of liability is achieved by the combination of active co-operation and commonality of intention. It is encapsulated in Scrutton LJ’s distinction between concerted action to a common end and independent action to a similar end, and between either of these things and mere knowledge of the consequences of one’s acts.” (emphasis added)

175.  Lord Sumption referred to the situation where a manufacturer or seller who had no control over the use of the equipment after he has parted with it.  He held that:

“ 41 ……liability would have to be founded on mere knowledge of its likely use, and mere knowledge is not tantamount to a common design…..The mere supply of equipment which is known to be capable of being used to commit a tort does not suggest intent. Other circumstances may do so.”

176.  In this case SNE contended that Chim Kee provided rotators, cranes, excavators and operators for the cranes and excavators (but not operators for the rotators); all its equipment was used to carry out the works that infringe the claims; the employees of Chim Kee as crane operators and excavator drivers were intimately involved in carrying out each integer of the claims; the soil was excavated by the crane operator, the circular wedge was wedged by the crane operator, the wedge was held in place by the crane operator while the circular wedge was driven, the pile was extracted by the crane operator and the hole was backfilled by the crane operator and excavator operator.  SNE submitted that while Hsin  Chong was ultimately responsible, Chim  Kee operators were also responsible for the work in terms of the safety of the operation and coordination between crane operators of Chim Kee and the rotator operators.

177.  In our view SNE has failed dismally in showing that Chim Kee was liable as a joint tortfeasor under a common design for the infringement of SNE’s patent.  Chim Kee was a supplier of equipment.  It provided the operators to operate some of the equipment used for the excavation of the piles.  These operators no doubt have to ensure their own safety and also have to coordinate their work with the other equipment operators but this is as far as the evidence against Chim Kee goes.  There is no evidence pointing towards Chim Kee that, while they supplied the equipment and operators, they knew these were being used to commit an infringement of SNE’s patent or that Hsin Chong was committing an infringement of the SNE patent, let alone that they had the intent to commit an infringement of SNE’s patent together with Hsin Chong.  That to us is the answer to SNE’s claim against Chim  Kee.  Even for the purpose of argument, if Chim Kee knew that the supply of equipment and operators was capable of being used to commit an infringement of the patent, this does not suggest intent on their part. While other circumstances may do so, there is nothing in this case that suggests this would be so.

178.  There is a further issue concerning section 81(1) of the Patents Ordinance which provides:

“ In proceedings for the infringement of a patent damages shall not be awarded, and no order shall be made for an account of profits, against a defendant who proves that at the date of the infringement he was not aware, and had no reasonable grounds for supposing, that the patent existed.”

179.  The Judge did not address this point.  In our view, in the event Chim Kee was found to have infringed the Patent and the issue of its knowledge becomes relevant under section 81, then the matter has likewise to be remitted to the Judge for consideration.

I. The appeal on costs

180.  Having dismissed SNE’s claims, the Judge ordered SNE to pay the costs of Hsin Chong and Chim Kee.  SNE applied to vary the costs order on two grounds, (a) counsel for Hsin Chong misled the court in seeking leave to amend to raise the obviousness objection based on the Brochure; and (b) there should be issue-based approach in dealing with costs.  The Judge heard the application on 29 April 2015 and handed down the Costs Judgment on 23 June 2015, refusing to vary the original costs order. 

181.  In the second supplemental notice of appeal, SNE repeated the same bases in seeking to overturn the Costs Judgment.  Of the four grounds set out in the notice, the first two grounds related to allegation of counsel misleading the court, the other two grounds related to the issue-based approach.      

I 1. Misleading the court

182.  SNE submitted that counsel for Hsin Chong (not Mr Stewart Wong and Mr Hui who were only instructed by Hsin Chong later) misled the court in not informing the court that the Brochure was not a new document when making the application for adding an objection to the validity of the Patent based on it.  The substance of the complaint by Mr Clark on behalf of SNE and the relevant procedural history were set out by the Judge at §§17 to 32 of the Costs Judgment.  It should be noted that the application on the part of Hsin Chong was made at the invitation of leading counsel for SNE on Day 3 of the trial and it was not opposed.  After allowing the amendment, the Judge adjourned the trial to allow additional expert reports to be prepared.  SNE did not complain about the so-called misrepresentation by counsel throughout the trial until sometime after the Main Judgment had been handed down[40].

183.  The Judge rejected SNE’s application to vary the costs order on this ground for the following reasons:

(a) SNE’s reliance on the Brochure was unanticipated and it was only when evidence was led from SNE’s expert witness Professor Lee that it became clear that the Brochure might be a source to challenge the validity of the Patent;

(b) The Judge was not satisfied that counsel for Hsin Chong deliberately misled the court.   The Prior Art Report (which had a copy of the Brochure attached to it) had been sent by solicitors for Hsin Chong to solicitors for SNE on 6 August 2013;

(c) In light of the answers given by Professor Lee in the course of his evidence, it was reasonable for Hsin Chong and Chim Kee to rely on the Brochure to challenge the validity of the Patent; and

(d) Even without the alleged misrepresentation, the court would have allowed the amendment application.

184.  Mr Clark challenged the Judge’s decision in this respect by contending that the Judge failed to consider the continuing duty of counsel and solicitors for Hsin Chong in not misleading the court.  Further, Mr Clark submitted that the Judge erred in giving the benefit of doubt to counsel when he had not filed an affirmation to explain the position to the court.  Mr Clark also submitted that the affirmation of the solicitor for Hsin Chong showed that the legal team for Hsin Chong was aware that the Brochure was not a new document at the time of the amendment application.  

185.  We cannot accept Mr Clark’s contentions.  First, as this is an application on costs between the parties (as opposed to an application to seek costs against the lawyers), we do not see any merit in counsel’s submission that the court should not give counsel the benefit of doubt when he had not made an affirmation in the matter.  

186.  Second, in assessing responsibility for the wrong impression of the court as to the status of the Brochure, it is wrong in principle to focus on the omission on the part of one team of lawyers.  We have no quarrel with the proposition that counsel and solicitor have continuing duty to the court.  The court expects the discharge of such a duty from the lawyers on both sides.  Since the Prior Art Report had been served on solicitors for SNE on 6 August 2013, those acting for SNE also owed a duty to the court to correct any misapprehension.  Notwithstanding the excuse put forward by solicitor for SNE for failing to bring the Prior Art Report to the attention to SNE’s counsel, we do not accept that this could exonerate their omission.  Before SNE put forward the Brochure as a new piece of evidence, counsel and solicitor should have considered the potential implications on adducing such evidence with SNE.  As a matter of fact, it was SNE’s team who positively misled (though not deliberately) the court that the Brochure was a new document because Mr Clark made a representation to that effect when he accounted for the late introduction of this piece of evidence.  Whilst Mr Clark may not be personally blameworthy for his solicitor’s failure to send him the Prior Art Report, we do not think the solicitors firm could escape responsibility for failing to notice that the Brochure was in the Prior Art Report.  If a solicitor chose to delegate a task to a litigation clerk, the firm should take responsibility for whatever shortcoming flowing from such delegation. 

187.  In the evidence filed on behalf of SNE, we cannot find any clear statement as to the time and circumstances in which SNE’s lawyers came to realize that the Brochure was in the Prior Art Report and as such it was not a “new” document.  There is therefore no explanation by solicitor for SNE as to what happened between the amendment application and the raising of the issue in May 2014.  Assuming that SNE had discovered this before the end of the trial, and had taken the point before the Judge delivered his Main Judgment, and the Judge (in line with his reasoning in the Costs Judgment) decided that the objection based on the Brochure is admissible, there cannot be any arguable ground for this court to interfere with such case management decision.  On the other hand, if SNE only discovered it after the delivery of the Main Judgment, the court is entitled to see whether there is any explanation for such late discovery.  As the evidence stands, we do not have any explanation from SNE or its lawyers. 

188.  Whilst we agree that those acting for Hsin Chong should have been more forthcoming in terms of dispelling the misapprehension, we are also of the view that those acting for SNE should bear a share of responsibility for introducing the Brochure as a “new” document. 

189.  In any event, the most important factor in the present context is the fact that SNE through its counsel deliberately introduced the Brochure in evidence and led evidence from Professor Lee on the same.  Those acting for SNE should have realized and advised their client that evidence introduced into the trial would be evidence that could be relied upon by SNE as well as Hsin Chong and Chim Kee.  There was no duty on the part of counsel or solicitor for Hsin Chong to caution SNE or its lawyers on the deployment of such evidence, not to mention that SNE did not give much notice to Hsin Chong and Chim Kee about its intention to introduce the Brochure and Mr Clark’s intention to ask Professor Lee on the same.  After Mr Clark examined Professor Lee about the Brochure, SNE could not prevent counsel for Hsin Chong and counsel for Chim Kee from cross-examining on the same.  This was precisely what happened.  On Day 2, Professor Lee gave evidence on the Brochure which was unfavourable to SNE’s case when he was cross-examined by Mr Philips Wong.  The application for amendment was made on Day 3. 

190.  In our judgment, the Judge was plainly right to hold that the introduction of such evidence by SNE was unanticipated and that in such circumstances even if he had known that the Brochure was not a new document, he would still be minded to grant the application for amending the grounds of objection.  In light of this conclusion, Mr Clark’s submission based on the continuing duty of counsel and solicitor could not take the matter further as the bringing of the real picture to the attention of the Judge would not have changed the outcome in terms of permitting Hsin Chong and Chim Kee to advance the objection based on the Brochure.    

191.  Further, we do not agree with Mr Clark that the affirmation of solicitor for Hsin Chong suggested that counsel had the version of the Brochure attached to the Prior Art Report in his mind when he addressed the court at the amendment application.  The affirmation has to be read together with the transcript for Day 3.  As explained by Mr Hui (who conducted this part of the appeal for Hsin Chong), the relevant parts of the affirmation referred to the index on the website from which the version produced by SNE could be downloaded.  It does not follow that counsel had in mind the Prior Art Report when he made the submissions to the court at that stage.  Further, in light of the fact that the amendment was actually prompted by leading counsel for SNE and the relevant evidence had already been introduced at the trial by SNE by that stage, and the application was unopposed, there was no reason why counsel for Hsin Chong should deliberately mislead the court in order to obtain the leave to amend.  Coupled with the observation made by the Judge on SNE’s solicitor being in a position to correct the misapprehension, the evidence is simply insufficiently cogent to support such a serious charge against counsel.

192.  Taking a broad and sensible view of the matter, we do not think there is any valid ground for us to interfere with the Judge’s exercise of costs discretion based on the premise that the omission on the part of counsel for Hsin Chong to bring to the attention of the court that the Brochure was not a new document should not have any impact in the special circumstances of this case.  The Brochure was introduced by SNE as evidence for the trial and Mr Clark led evidence from Professor Lee on the same.  That led to the evidence from the professor favourable to Hsin Chong when he was cross-examined by counsel for Chim Kee.  The amendment was made on the prompting by leading counsel for SNE and it was not opposed.  The Judge gave a reasonable opportunity to SNE to respond to the new objection based on the Brochure.  In such circumstances, it is plainly unarguable to suggest that the amendment application should not have been made and that the objection based on the Brochure should not be entertained.  Once this is accepted, it is difficult to see why, after a fair contest on the merit of this ground of objection, SNE should be absolved from whatever costs consequence flowing from the outcome of this contest simply because of what was said by counsel for Hsin Chong in that application for amendment.  Such an argument had taken the matter from a wholly wrong perspective and we firmly reject the same. 

I2. Issue-based approach

193.  The Judge considered Mr Clark’s submissions on issue-based approach in awarding costs at §§44 to 63 of the Costs Judgment. Having particular reference to the facts and circumstances, the Judge held that the issue-based approach should not be adopted.  This is again a decision on the exercise of costs discretion which this court would not intervene lightly, see Ho Shu Kwong v Chiang Chun Yuan [2002] 3 HKLRD 419. 

194.  In respect of the question of obviousness, we have discussed the findings by the Judge in Section G above.  In light of that, we cannot accept Mr Clark’s submission premising on SNE being the winner on this issue.  It is quite plain that the Judge would have found in favour of Hsin Chong and Chim Kee on this issue but for his finding on insufficiency.  In the circumstances of the present case, we cannot say Hsin Chong and Chim Kee acted unreasonably in running the case of obviousness based on the Brochure.  There is thus no foundation for giving SNE its costs on this issue.

195.  In respect of the other issues, the Judge discussed them at §§60 to 63 of the Costs Judgment:

“ 60. According to Mr Clark, there were other issues on which SNE succeeded which should justify a reduction in the total percentage of costs payable by SNE to Hsin Chong. They were:

(i) Hsin Chong could not establish that SNE had disclosed the rotator and wedge method in Japan or to the Japanese workers prior to the Patent application;

(ii) Hsin Chong had abandoned the contractual defence as pleaded in para 12 of the Defence and Counterclaim of Hsin Chong only at the commencement of the trial; and

(iii) Hsin Chong was not successful in the argument that it was necessary for SNE to identify a proprietary interest in the confidential information.

61. I refuse to apportion the liability for costs in respect of these issues. In my judgment, the time and costs spent on these issues were quite insignificant as compared to the overall length and costs of the proceedings. Further, these issues are, to a great extent, interrelated with the other issues involved in the case, and so it would be inappropriate for the court to apportion the liability for costs relating to these issues.

62. For item (i), I do not remember that we had spent any significant time on such issue. In any event, the court had to deal with the other disclosures at the trial and so item (i) was quite an insignificant issue. For item (ii), apart from the discovery of certain contractual documents, the parties had not spent any significant time on such issue. For item (iii), it was again an insignificant issue and I do not remember that the parties had devoted any particular effort in dealing with this particular argument. I also did not see the need to deal with this particular issue in the Judgment.

63. I also echo the dicta of Lam J in Chinachem Charitable Foundation v Chan Chun Chuen.  As these are quite insignificant issues, it is generally disproportionate to embark on an elaborated enquiry to determine whether an issue-based approach should be adopted, as such kind of exercise may not be consistent with the underlying objectives stated in RHC.  ”

196.  Though there are authorities suggesting the court may be more willing to adopt an issue-based approach in patent cases in respect of “suitably circumscribed” issues, it is not a strict rule of law and much depends on the facts of the case.  Based on his knowledge of the case (which is much greater than ours as he had been dealing with it shortly after the directions for speedy trial were given), the Judge gave sound reasons for not adopting this approach in the present case and it is a decision which this court has no proper basis to intervene. 

J. Disposition

197.  For these reasons, we dismiss the appeal of SNE and order SNE to pay the costs of Hsin Chong and Chim Kee, and in Hsin Chong’s case with certificate for 2 counsel.