Australia patents update: Full Court reinstates problematic best method requirement for divisional patents

The Full Court of the Federal Court of Australia (Justices Beach, Downes and Jackman) has held that the relevant date for ascertaining the "knowledge element" of the best method requirement under section 40(2)(aa) of the Patents Act 1990 is the date of filing the complete specification of the patent in suit, that is, the filing date of each divisional application, and not the earlier date of the PCT specification: The NOCO Company v Brown and Watson International Pty Ltd [2026] FCAFC 44.

The decision overturns Justice Moshinsky's first instance decision (which had been a welcome correction to the law on assessing best method), and returns Australian patent law to being out of step with the patent law of major trading partners.

The Full Court's reasoning

Finding for the patent challenger (Brown and Watson), the Full Court was influenced by the fact that each divisional application is a discrete patent application, which is filed together with its own complete specification and has its own filing date. Each such specification must itself meet the best method requirements found in section 40(2)(aa). The Full Court also emphasised section 79B of the Act, which treats divisional applications as separate complete applications.

In the Full Court's view, as a matter of statutory construction, these provisions led to the conclusions that:

• the best method requirement must be assessed by reference to the knowledge of the applicant who actually files each divisional patent application (even if that applicant is a different person from the applicant who filed the related parent application(s), including the original PCT application – as often occurs when a patent family is assigned to a different person); and

• accordingly, the date for assessing that applicant's knowledge must be the date when that applicant filed each divisional application, and not the date on which a (potentially different) person filed any application for any earlier related patent application(s).

In the Full Court's view, this approach is fully consistent with the statutory provisions as well as earlier authorities regarding the best method requirement, including Rescare Ltd v Anaesthetic Supplies Pty Ltd (1992) 25 IPR 119, Pfizer Overseas Pharmaceuticals v Eli Lilly & Co [2005] FCAFC 224, and Dometic Australia Pty Ltd v Houghton Leisure Products Pty Ltd [2018] FCA 1573.

In relation to these earlier authorities, the Full Court:

• rejected NOCO's reliance on a passage in Rescare where Justice Gummow had stated that "The adequacy of disclosure should be judged by reference to the time from which dated the monopoly granted the applicant in exchange for the disclosure." The Full Court instead considered that the "clear and unequivocal" effect of Justice Gummow's reasoning was that the operative date was the date on which the complete specification was filed – and that the observation quoted above was not applicable in the context of divisional patents; and

• observed that Pfizer expressly supported the proposition that compliance with section 40(2) is assessed at the time of filing the complete specification; and

• agreed with the reasoning of Justice White in Dometic (which had not been followed by Justice Moshinsky at first instance in this case), on the basis that the position had already been clarified – in Pfizer – that the relevant date was the date of filing the complete specification.

The Full Court did not in any detail delve into the parties' policy arguments regarding the proper construction of the Act. However, the Court did consider that some of the policy arguments weighed in favour of the Full Court's preferred construction.

For example:

• The Full Court was unpersuaded by one of NOCO's arguments that, because the 20-year statutory monopoly for a divisional patent generally runs from the date on which the earliest related complete application (eg., a PCT application) was filed, the quality of disclosure in the divisional patent (including the best method requirement) ought therefore to be assessed by reference to that earlier date from which the monopoly commences.

• The Full Court observed that a divisional patent application could disclose matter that extends beyond that which is disclosed in its parent application. The Full Court also noted that a divisional patent application may include broader claims than those contained in its parent. Indeed, on the facts of this case, the Full Court noted that NOCO had done exactly that – in the divisional patent, NOCO had removed claim limitations that had been present in the claims of the parent, but had not inserted any additional matter disclosing the corresponding best method of performing that broader invention.

• In the Full Court's view, the fact that the scope of monopoly in a divisional patent might be greater than that of its parent, even if the duration of protection is no greater, supported the view that the best method requirement should require disclosure of the applicant's knowledge as of the date of filing the divisional patent application.

Commentary on the Full Court's reasons

In our respectful view, although the Full Court's reasoning is technically open on the literal words of the statutory provisions, it fails to give a coherent and purposive construction to the Act, where a limited, 20-year monopoly is granted in exchange for the applicant making a commensurate public disclosure of the invention. Significantly, the Full Court's judgment was silent about how this construction achieved the objects of the Act, which are now expressly recorded in section 2A as a result of amendment in 2020.

It may be accepted that a divisional patent may have a broader scope of monopoly than its parent. However, other than potentially in the special case of pharmaceutical patent term extensions, a divisional patent does not enjoy any longer duration of protection than its parent. Importantly, if the invention of a divisional patent, properly construed, is in fact broader than that of its parent, then the scope of the "best method" that must be disclosed in the complete specification of the divisional might well be broader than that which must be disclosed in the parent – but, in each case, we consider it should still be the knowledge of the applicant for the earliest complete patent application (at the time of filing that earliest complete patent application) that is assessed.

The Full Court's reasoning is artificial and unfortunately appears to create new difficulties for the operation of the best method requirement in Australia. For example, consider a scenario where a patent family is assigned from a very knowledgeable original owner to a different, much less knowledgeable, successor in title. The successor in title might then file a new divisional patent application within the patent family that seeks a broader/different scope of monopoly than the earlier related patents. On the Full Court's approach – which calls for an assessment of the divisional applicant's knowledge at the time of filing the divisional, rather than assessment of the original applicant's knowledge at the time of filing the earliest related complete application – it appears to follow that this less-knowledgeable successor might have a lower best method disclosure obligation than if the exact same divisional application had been filed by the original, very knowledgeable owner, eg. if there had never been an assignment. Clearly, it is undesirable for the patents system to enable a successor in title to obtain a monopoly in exchange for a lower level of disclosure than the original owner would have been required to share to enjoy the same monopoly.