1414 Degrees Limited v Climate Change Technologies Pty Ltd - [2018] APO 28

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
1414 Degrees Limited v Climate Change Technologies Pty Ltd [2018] APO 28

Patent Application: 2012292959

Title:Thermal Energy Storage Apparatus

Patent Applicant:  Climate Change Technologies Pty Ltd
Opponent:  1414 Degrees Limited
Delegate:  M. G. Kraefft
Decision Date:  1 May 2018
Hearing Date:  1 March 2018, in Melbourne

Catchwords: PATENTS – section 59 – opposition to grant of patent – entitlement – inventive concept in use of contiguous block of heat-absorbing material in form of machinable sintered graphite – whether inventive concept arose while inventors were engaged under service agreement by opponent’s predecessor – whether service agreement enabled transfer of intellectual property rights to opponent – standing of verbal agreement considered in light of surrounding circumstances – applicant’s non-entitlement not established – parties found to be jointly entitled.

Representation: Counsel for the applicant: Mr Ben Fitzpatrick
Patent attorney for the applicant: Dr Grace Chan, Davies Collison Cave.

Patent attorney for the opponent: Dr Anthony Lee, Madderns.

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2012292959

Title:Thermal Energy Storage Apparatus

Patent Applicant: Climate Change Technologies Pty Ltd
Date of Decision: 1 May 2018
DECISION
In the present case, the inventive concept is a contiguous block of heat-absorbing material in the form of machinable sintered graphite, and a plurality of heat storage elements in thermal contact therewith, with each storage element being received in a respective hole machined in the block. That inventive concept did not arise while the inventors were engaged with the predecessor company of the opponent.
Nonetheless, I have also determined whether the nature of the service agreement between the parties would have enabled the transfer of intellectual property rights to the predecessor. I have found the service agreement would have enabled such transfer of rights.
As the inventive concept though did not arise while the inventors were engaged with the predecessor, the opponent has not established that the applicant would not be entitled to a grant of a patent for the invention in the present case.
The inventors though could not have reached the inventive concept without their knowledge of developments undertaken at the predecessor company. I conclude the parties are jointly entitled to the claimed invention.
The application should proceed jointly in the names of Climate Change Technologies Pty Ltd and 1414 Degrees Limited
I make no award of costs.
REASONS FOR DECISION
BACKGROUND

Neil Parkinson and Patrick Joseph Glynn filed patent application 2012292959 on 9 August 2012 as an international application under the Patent Cooperation Treaty (“PCT”). The international application is designated PCT/AU2012/000938. The application is based on a US priority application filed on 9 August 2011 (“the priority date”).
On 18 February 2014, the applicants filed a request to record an assignment. The application is presently proceeding in the name of Climate Change Technologies Pty Ltd (“the applicant”).
Application 2012292959 was advertised accepted on 11 February 2016. Latent Heat Storage Pty Ltd (“the opponent”) filed a notice of opposition on 11 May 2016. A statement of grounds and particulars followed on 11 August 2016.
The parties completed the evidentiary stages of evidence in support, evidence in answer and evidence in reply on 13 April 2017.
The applicant challenged the opponent’s evidence in reply as not being properly evidence in reply but evidence in support filed out of time. On the presumption that certain aspects of the evidence in reply might not be rejected, the applicant filed further evidence for consideration under Regulation 5.23.
After taking comments from both parties, a delegate of the Commissioner of Patents determined that the evidence in reply was generally responsive to the applicant’s evidence in answer. Nonetheless, the delegate also determined that the applicant’s further evidence was likely to significantly affect the outcome of the opposition. Accordingly, the delegate indicated to the parties the intent to consult the applicant’s further evidence under Regulation 5.23. Under Sub-regulation 5.23(2), the delegate then allowed the opponent time to make further representations, or file evidence, responding to the applicant’s further evidence. The opponent duly filed responding evidence on 10 August 2017, which completed the evidence in this opposition.
On 8 February 2018, the opponent requested the recording of a change of name of the opponent. This was due to a company name change of the opponent. The opposition is now proceeding in the name of 1414 Degrees Limited.
SPECIFICATION
The specification outlines the present invention as relating to thermal energy storage apparatus. As background, the specification notes the trend towards cleaner fuel sources and the consequential significant development in the use of solar or wind energy as a means of providing usable forms of energy.
Of concern, the specification notes that solar energy’s biggest pitfall is that, at certain times of the day, the sun is unable to provide the necessary flux of photons to various devices that utilise solar energy. Similarly, wind turbines and the like are only effective when there is sufficient wind strength to drive them.
To alleviate the problems of interrupted or inconsistent supply of energy, silicon metalloid material has been used as a means of storing thermal energy for later use. During peak solar activity, the silicon metalloid material would absorb thermal energy as it underwent a phase change from a solid to a liquid. Silicon metalloid material is characterised in part by the property that, on undergoing a phase change from liquid to solid, there is an expansion of the material rather than contraction as would be expected for most other materials.
The specification further outlines that the thermal energy stored within the silicon metalloid material could be converted into electrical and/or mechanical action through electrical devices such as a Stirling engine. This would provide a source of power at times when solar activity was not available.
A disadvantage of silicon metalloid material is its expansion and contraction during phase changes. The expansion and contraction creates significant build-up of pressure on an enclosure in which the silicon metalloid material is placed.
The specification then refers to a PCT application, PCT/AU2010/001035, published as WO 2011/017767. To address the above problems, the PCT application describes an enclosure in the form of an elongate canister formed of ceramics. The elongate canister includes a pressure dispersion punt and a series of grooves in one of its ends. The series of grooves act as a heat sink. A series of such canisters are used to store silicon metalloid, and are packed in interleaved arrangement with a series of sintered graphite rods. The present specification states though that, in such an arrangement, the canisters are prone to cracking, particularly in the region of the grooves.
The specification ends with 14 claims. The broadest claim is claim 1, which is recited below.
1.A thermal energy storage apparatus, including:
a block of a heat-absorbing material, the block being a contiguous block of compressed material in the form of sintered graphite and machinable; and
a plurality of heat storage elements, the heat storage elements including a phase change material stored in a containment vessel;
wherein each heat storage element is in thermal contact with the block of heat-absorbing material, each storage element being received in a respective hole machined in the block.
STATEMENT OF GROUNDS AND PARTICULARS
The opponent relied on a single ground of opposition. That was that the applicant was not entitled to a grant of a patent for the invention. The particulars were that the applicant did not derive entitlement from the named inventors, Mr Parkinson and Mr Glynn. As a result, the applicant was not entitled to the grant of a patent in this case.
EVIDENCE IN SUPPORT
The opponent filed evidence in support from Mr Robert John Keith Shepherd. Mr Shepherd is a director of the opponent.
In the first instance, Mr Shepherd outlined that Latent Heat Storage Pty Ltd was originally incorporated under the name Gnomon Technologies Pty Ltd (“Gnomon”) with that company subsequently changing its name to Latent Heat Storage Pty Ltd, the original filer of the notice of opposition. Mr Shepherd also stated that Gnomon was incorporated for the purposes of development and commercialisation of, amongst other projects, a thermal energy storage system (“TESS”). Mr Shepherd further stated that, consistent with that purpose, Gnomon entered into a service agreement with Mr Parkinson and his firm to provide engineering services to Gnomon in relation to the developments of the TESS. Gnomon would hold the intellectual property rights to these developments. According to Mr Shepherd, the service agreement was terminated on 23 May 2011.
Mr Shepherd then outlined the intellectual property said to have been developed under the service agreement. The intellectual property included three Australian provisional patent applications and two PCT applications. Mr Shepherd further exhibited a TESS presentation and a TESS draft technical paper said to relate to further TESS developments under the service agreement.
EVIDENCE IN ANSWER
The applicant filed evidence in answer from Mr Parkinson. He is listed as a co-inventor of the present application.
In evidence, Mr Parkinson stated that he is a substantial shareholder and the chief engineer of the applicant. Previously he had been a director of Gnomon. Mr Parkinson further stated that his firm was engaged to provide development services for Gnomon.
Mr Parkinson acknowledged the existence of a service agreement between his firm and Gnomon. From his evidence, the termination of the agreement in about April 2011 related to an inability for Gnomon to secure further suitable investment.
Mr Parkinson’s evidence further indicated that, in May 2011, he and Mr Glynn approached a potential investor to discuss the funding of further developments of the TESS that had been worked on with Gnomon. This work commenced in June 2011. Mr Glynn and Mr Parkinson identified technical problems with the inventions disclosed in two of the above-mentioned provisional applications. Mr Parkinson stated that their subsequent development work then resulted in the invention disclosed in the US priority application.
Mr Parkinson indicated that a key improvement was the use of a heat-absorbing material in the form of a contiguous block of compressed material in the form of sintered graphite which was machinable. He also stated this feature was not known to him prior to June 2011 and was not disclosed in the TESS presentation or the TESS paper.
EVIDENCE IN REPLY
The opponent filed evidence in reply from Dr Zhao Feng Tian. Dr Tian is a senior lecturer in the School of Mechanical Engineering at the University of Adelaide. He has considerable academic experience and some industrial experience in thermodynamics, thermal storage, and thermal engineering including the use of computational fluid dynamics to model heat transfer.
In evidence, Dr Tian analysed the present application to conclude the invention was directed to the use of a block structure of heat-absorbing material that is in thermal contact with heat storage containers. He also noted, with examples, the close similarity of the TESS paper and the TESS presentation with the presently claimed invention. Finally, Dr Tian commented on the performance and design differences between the single block graphite configuration of the present case and the multiple section block configuration of the TESS presentation. He concluded that any decrease of heat transfer rate for the multiple block configuration due to gaps between sections would be extremely minimal given that the blocks would be machined to high tolerance and would be in good thermal contact with each other.
REGULATION 5.23 EVIDENCE – APPLICANT
The applicant’s evidence under Regulation 5.23 consisted of a further declaration by Mr Parkinson.
At the outset, Mr Parkinson disagreed with Dr Tian’s assessment that the decrease in heat transfer rate would be extremely minimal with multiple block sections. Mr Parkinson stated there were significant technical advantages in using heat absorbing material in the form of a contiguous block of compressed material in the form of sintered graphite which is machinable. He mentioned the prevalence of fine dust when machining sintered graphite and that this dust remains a barrier between blocks when stacked. Mr Parkinson further stated that the dust acts like a slip coat allowing blocks to move freely. This in turn affected the contact area of the blocks which in turn affected the thermal conductivity of the blocks.
In respect to the manufacturing of sintered graphite, Mr Parkinson mentioned the process of graphitization to align the particles in a given direction to set the direction of conductivity. With this attribute in place, the input and extraction of heat can be tailored very accurately, thus improving energy storage efficiencies. Mr Parkinson stated that, if multiple blocks are used, the controllability of these directions cannot be assured as all the blocks are manufactured as singular pieces that then need to be put together.
Mr Parkinson thus concluded that a single block provided more efficient heat transfer within the energy storage system.
REGULATION 5.23 EVIDENCE – OPPONENT
The opponent’s responding evidence under Regulation 5.23 consisted of a further declaration by Dr Tian.
Dr Tian’s evidence principally criticised the broad and general statements of Mr Parkinson’s evidence as he had not provided any technical detail or experimental verification, or quantification in respect to the effects of dust and graphitization. Dr Tian thus stated that Mr Parkinson’s evidence, about a single block providing for more efficient heat transfer, was unsupported and so Dr Tian remained of the opinion that he would expect there to be some extremely minimal decrease in the heat transfer rate of a multiple block configuration as compared to a single block configuration.
Dr Tian further commented on the opposed application. He stated that he could find no reference or discussion, in either the application as filed or as accepted, of the asserted technical advantages of using a single block.
APPLICABLE LAW
As a consequence of the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (“the Amendment Act”), there are substantial changes to the Patents Act 1990. The date of effect of those changes was 15 April 2013. The application of the Amendment Act in the present case depends on the date of the request for examination. The applicant filed its request for examination on 12 April 2013. Consequently the Patents Act as in force immediately before 15 April 2013 applies in the present case.
This means the former standard for opposition proceedings applies and the opponent bears the onus of establishing that it is clear or practically certain that a valid patent could not be granted (F Hoffman-La Roche AG v New England Biolabs Inc [2000] FCA 283; 50 IPR 305 at 311, 319; Commissioner of Patents v Sherman [2008] FCAFC 182; 79 IPR 426; Genetics Institute Inc v Kirin-Amgen Inc [1999] FCA 742; [1999] 92 FCR 106 at [17]).
The opponent’s ground of opposition is in accordance with the following provision of Section 59:-
The Minister or any other person may, in accordance with the regulations, oppose the grant of a standard patent on one or more of the following grounds, but on no other ground:
(a) that the nominated person is either:
(i)not entitled to a grant of a patent for the invention; or …
The application of the above standard for opposition proceedings to the present case is reinforced by the decision of Moshinsky J in Merial, Inc. v Intervet International B.V. (No 3), [2017] FCA 21, a case that similarly dealt with entitlement. Quoting from [13] of that decision:-
“The opponent bears the onus in relation to each ground of opposition. The authorities establish that, for an opposition to be upheld, it must be ‘clear’ (or ‘practically certain’) that the patent, if granted, would not be valid.”
Section 15 of the Patents Act 1990 relates to persons to whom a patent may be granted. Relevant parts of sub-section (1) appear below.
(1)Subject to this Act, a patent for an invention may only be granted to a person who:
(a)    is the inventor; or
(b)   would, on the grant of a patent for the invention, be entitled to have the patent assigned to the person; or
(c)    derives title to the invention from the inventor or a person mentioned in paragraph (b); or …
In Robert Dommett v Zebra Research Pty Ltd, [2011] APO 53 at [32], the delegate referred to the Full Federal Court decision, University of Western Australia v Gray, [2009] FCAFC 116 (“the UWA decision”), to discuss the law governing disputes over entitlement. The delegate stated that the court accepted that entitlement is assessed by considering three matters:-
1.identify the “inventive concept” of the invention as defined in the claims;
2.determine inventorship including the person responsible for the inventive concept and the time of conception as distinct from its verification and reduction into practice; and
3.determine how many contractual or fiduciary relationships give rise to proprietary rights in the invention.
DISCUSSION
Inventive Concept
The opponent submitted that Dr Tian, at [25] in evidence in reply, correctly identified the inventive concept as the use of a block structure of heat absorbing material that is in thermal contact with the heat storage containers. Support for this position may for example be found at page 8 lines 14-17 of the specification. There, the specification states that a block structure is not subject to the shifting, during the heating and cooling phases, which is experienced by the graphite rods and associated containment vessels in the arrangement described in PCT/AU2010/001035.
The applicant outlined the inventive concept in a more particular way. Firstly it may be noted that page 6, lines 26 and 27, of the specification defines the term “contiguous” to refer to a single mass of material, whether solid or porous, in which any two points within the mass may be joined by a continuous path. The applicant further indicated that all claims of the application were limited to a contiguous block as were both embodiments in the specification. Moreover, the applicant referred to page 8 lines 12-14 of the specification which describes the advantage of installing the heat storage elements in a single block (my emphasis) of heat-absorbing material to avoid the fracturing problems associated with previous approaches. In evidence in answer at [14], Mr Parkinson described a key improvement in the invention being the use of a heat-absorbing material in the form of a contiguous block of compressed material in the form of sintered graphite which is machinable.
From the above, it would appear that the parties were in dispute on whether the inventive concept related to the use of a single block of heat-absorbing material as generally described and claimed in the specification or to a block structure generally, which may be a multiple section block configuration, as in the TESS presentation for example. In respect to the latter, the TESS paper similarly describes a sintered graphite heat cell designed as a modular system, stated to allow for easy expansion.
The first instance decision, University of Western Australia v Gray (No. 20), [2008] FCA 498, appears pertinent. At [1426], French J commented that the inventive concept marks a boundary between invention and verification. French J then referred to the US Court of Appeals Federal Circuit decision, Burroughs Wellcome Co v Barr Laboratories Inc, [1994] USCAFED 1225, (1994) 40 F.3d 1223. He stated that this decision set out the following principles, amongst others, as established by US appellate courts:
- Conception is the touchstone of inventorship, the completion of the mental part of inventions;
·Conception is the “formation in the mind of the inventor of a definite and permanent idea of the complete and operative invention as it is hereafter to be applied in practice”. It is complete only when the idea is so clearly defined in the inventor’s mind that only ordinary skill would be necessary to reduce the invention to practice without extensive research or experimentation.

Notably absent from the law is any reference to determining the inventive concept solely on the basis of the claims of an application. In the UWA decision on appeal, the Full Court of the Federal Court described French J’s approach, in the first instance UWA decision, in the following terms. At [221] of the Full Federal Court’s UWA decision:-
“After a detailed analysis of the authorities (at [1419]-[1441]), French J concluded that the relevant task was, first, to identify the ‘inventive concept’ of each invention by reference to the terms of the relevant specification (which his Honour said would be for the most part the relevant PCT specification), and, second, to ascertain the timing of the invention and the identity of the inventor, by reference to that inventive concept (see [1418] and [1442]-[1443]).”
The Full Court also noted French J’s reliance on a then recent Federal Court decision of the Full Court in reaching that conclusion. At [222] of the UWA decision:-
“One of the authorities that French J considered in reaching this conclusion was Polwood Pty Ltd v Foxworth Pty Ltd [2008] FCAFC 9; (2008) 165 FCR 527 (Polwood) (at [1434], [1438]-[1441]). Because UWA made much of [60] in Polwood in its submissions on the appeal, it is convenient that we set it out at once:
The invention or inventive concept of a patent or patent application should be discerned from the specification, the whole of the specification including the claims. The body of the specification describes the invention and should explain the inventive concepts involved. While the claims may claim less than the whole of the invention, they represent the patentee’s description of the invention sought to be protected and for which the monopoly is claimed. The claims assist in understanding the invention and the inventive concept or concepts that gave rise to it.”
The present specification contrasts the invention from the disclosure in the prior PCT/AU2010/001035 application with a few examples. One is that a block structure of the heat-absorbing material is not subject to the shifting, during the heating and cooling phases, which is experienced by the graphite rods and associated containment vessels in the arrangement described in PCT/AU2010/001035 (page 8, lines 14-17). One may thus be led to the conclusion that the complete and operative invention involved the use of a block structure of heat-absorbing material of sintered graphite, whether that be a single block or a multiple block configuration. Either configuration is clearly distinct from the series of graphite rods interleaved with a series of heat storage containers, as in the above PCT application referred to in the present specification.
On the other hand the law, as outlined above in the UWA decision, indicates that the identification of the inventive concept arises from the relevant specification as a whole. The above reference to the block structure in the specification is in the context of referring to the previously described single block of heat absorbing material in the same paragraph. Throughout the specification, reference is made to a block of heat absorbing material or sintered graphite and, more specifically at times, to a contiguous or a single block. Furthermore, all of the present claims are limited specifically to a contiguous block of compressed material in the form of sintered graphite that is machinable. Moreover both embodiments in the specification embody a single block configuration.
On the basis of presuming against redundancy of claims, it may be said that independent claim 1 as filed included a non-contiguous block structure within its scope since dependent claim 3 as filed specifically defined the block of the preceding claims to be a contiguous block. On the other hand, the claims of a specification are not rendered invalid on account of there being a redundancy in the claims. Similar considerations applied in David Kahn Inc. v Conway Stewart & Company Ltd, [1974] RPC 279, with the conclusion, at 308, being that there “is no absolute or invariable rule that different claims should be construed as of different scope. The prima facie presumption that this is so can bend to other considerations if they are weighty enough”.
On the basis of the specification as a whole (see [46]), I would construe the claims as filed as also defining a single block configuration. Where the whole of the specification is to a contiguous or single block, I think that is weighty enough to displace a presumption that claim 1, as originally filed, could be stretched to including a block structure of heat-absorbing material of multiple block configuration as part of the inventive concept. Such an arrangement is not contemplated in the present specification. In the present case overall, I will adopt the position that the inventive concept is a contiguous block of heat-absorbing material in the form of machinable sintered graphite, and a plurality of heat storage elements in thermal contact therewith, with each storage element being received in a respective hole machined in the block.
Inventors
The opponent accepted that the named inventors in the application were the inventors of the inventive concept identified by Dr Tian. Moreover, the opponent did not suggest any other inventors irrespective of what the inventive concept was in the present case. Thus, there appeared to be no dispute between the parties of Mr Parkinson and Mr Glynn being the actual inventors of the present invention.
The dispute then principally hinged on firstly whether the inventive concept in the present case had come about while Mr Parkinson and Mr Glynn were engaged on terms with Gnomon and, if so, secondly whether the terms enabled the transfer of the relevant intellectual property rights to Gnomon.
Where The Inventive Concept Arose
As indicated by Mr Shepherd’s evidence in support, there appears to have been a number of TESS developments under the service agreement. The invention described in the above-mentioned PCT/AU2010/001035 is one example. As mentioned above, the present block structure of heat-absorbing material of sintered graphite is clearly distinct from the series of graphite rods interleaved with a series of heat storage containers, as in that PCT application.
As also mentioned earlier, Mr Shepherd presented two other exhibits in evidence said to relate to further TESS developments under the service agreement. The exhibits were the TESS presentation and the draft technical paper of TESS. The contents of these exhibits more closely relate to the inventive concept in the present case. I will refer to the contents of these exhibits as the further TESS developments.
The service agreement between Mr Parkinson and Gnomon was variously stated in evidence to have concluded in April 2011 (Mr Parkinson’s evidence in answer at [9]) or in May 2011 (Mr Shepherd’s evidence in support at [10]). In the present case, nothing would appear to turn on this differentiation. Notably though, there is no direct evidence in this case linking Mr Glynn to the service agreement.
The TESS presentation contains technical drawing pages variously dated in January, February or March 2011. The TESS paper contains no indication of dates. Nonetheless, in view of the similarity of the subject matter, I am prepared to accept that both TESS exhibits pre-date the end of the service agreement.
In evidence in reply, Dr Tian at [31]-[34] identified close similarities between the present application and the TESS paper. He indicated, with examples, that Section 3 of the TESS paper was essentially replicated in the opposed application in the portion titled “Testing of containment vessels”. At [35] and [36] of his evidence, Dr Tian also described Figure 5 of the TESS paper as broadly consistent in configuration with Figure 1 of the application. Similarly, in respect to the TESS presentation, Dr Tian, at [38] and [39] in his evidence in reply, stated that the depicted prototype system was essentially identical to Figure 1 of the application aside from the block of heat-absorbing material in the TESS presentation appearing to be comprised of four sections of compressed sintered graphite.
In evidence, and at the hearing, there was some discussion from both parties of the performance differences and the technical advantages between the single block and multiple section block configurations of heat absorbing material. Dr Tian stated the differences in heat transfer rate would be minimal and also expressed the opinion that each of the individual blocks in the TESS presentation’s multiple section block design could be interpreted as a contiguous block of compressed sintered graphite.
At [6] of his Regulation 5.23 evidence, Mr Parkinson noted that he had constructed a prototype TESS in accordance with the claimed invention and stated that significant technical advantages were obtained in using a contiguous block of compressed material in the form of sintered graphite which was machinable. At [7], he stated that one factor in machining sintered graphite is the prevalence of a fine dust when breaking the hardened crust that forms on the surface of sintered graphite. In a multiple block configuration, this dust is a barrier between blocks when stacked, acting like a slip coating allowing the blocks to move freely. In turn, this affects the contact area of the blocks which in turn affects their thermal conductivity. Mr Parkinson also mentioned the process of graphitisation during the manufacturing of sintered graphite to align the particles in a given direction, which in turn sets the direction of conductivity. If multiple blocks are used, the controllability of these directions cannot be assured as all the blocks are manufactured as singular pieces that then need to be put together.
In response, Dr Tian stated that Mr Parkinson had not provided any technical detail or any experimental verification or quantification as to the supposed effects of dust and controlled graphitisation. Moreover Dr Tian indicated the specification was silent as to any problem that use of a contiguous block would solve as opposed to a multiple block configuration and in particular to the purported advantages advanced by Mr Parkinson.
The relevance of an analysis of the performance differences and the technical advantages, if any, between the single block and multiple section block configurations of heat absorbing material may be said to be not readily apparent in respect to the inventive concept. Such an analysis would appear to relate more to inventive step or utility than a determination of where the inventive concept arose.
In any case, Dr Tian criticised the applicant’s lack of empirical support for the purported advantages. He also acknowledged that he did not have a suitable background in material science to be able to comment on the details. On the other hand, Mr Parkinson affirmed the existence of the performance differences and the technical advantages of the use of the contiguous block. On the face of it, those differences and advantages appear to be eminently plausible. To the extent that such analysis may be relevant to the present matter, I would find it supports the proposition that the single block and multiple section block configurations are conceptually different.
Both of the TESS exhibits relate to a block structure of sintered graphite. While the core prototype depicted in the TESS presentation appears substantially the same as the device in Figure 1 of the present application, the sintered graphite block in the TESS presentation is clearly described as a multiple, four section block. As mentioned earlier, I adopted the position that the inventive concept in the present case related to the use of a contiguous block of heat-absorbing material in the form of machinable sintered graphite. I am not satisfied that the TESS exhibits disclose the inventive concept as determined above. Consequently I find the inventive concept did not arise while the inventors were engaged with Gnomon.
Terms Of Engagement With Gnomon
The opponent’s position, whereby the applicant was not entitled to a grant of a patent for the invention, was contingent on the further TESS developments, as in the TESS presentation and the TESS paper, reflecting the inventive concept of the opposed application. Since I have found that is not the case, the terms of engagement between the inventors and Gnomon and any intellectual property rights that may have arisen therefrom could be regarded as moot in the present case. Nonetheless, I will proceed further.
At the hearing the opponent indicated that the terms of the service agreement were not put in writing. The agreement at the relevant time was a verbal agreement. This is not fatal to the opponent in assessing relevant entitlement.
At [37] in University of British Columbia v Conor Medsystems Inc, [2006] FCAFC 154, (“the UBC decision”), Emmett J commented on Section 15 of the Patents Act 1990 in the following way.
“Section 15 specifies no formalities as being necessary for an applicant to be effectively the assignee of the invention from the inventor. Further, s 15 specifies no formalities as being necessary for the derivation of title to an invention from an inventor or from a person who, on the grant of a patent, would be entitled to have the patent assigned. While an assignment in writing might be preferable, in order to avoid difficulties of proof, an assignment might be effected orally or may even be implied from the conduct of the parties.”
In the above respect, one may also note the agreement of Stone J at [54] and Bennett J at [101] of the UBC decision.
Similarly in the present case, the opponent relied on several authorities as to the enforceability of verbal agreements. For example, quoting from Geebung Investments Pty Ltd v Varga Group Investments (No 8) Pty Ltd, (1995) 7 BPR 97578, at page 12, per Kirby P:-
“… if the agreement in the present case is alleged to have arisen from the oral discussion, regard may be had to the subsequent correspondence to throw light upon that assertion. … Gleeson CJ pointed out in Lezabar Pty Ltd v Hogan, (1989) 4 BPR 9498, that where the parties have made an informal agreement which amounts to a ‘limited consensus’, and it is necessary for the court to determine whether a concluded contract subsists, ‘the court will construe their language, and characterise their conduct, where appropriate, by reference to any surrounding circumstances which are properly to be regarded as throwing light upon their intention’.”
In relation to the question as to whether acts or conduct can constitute an assignment, it would appear that similar considerations to those discussed in the UBC case apply in the present case. That is, whether the acts or conduct of the parties in the present case implied that the service agreement was of such nature that the rights to any intellectual property arising from the TESS developments belonged to Gnomon.
With reference to the surrounding circumstances in the present case, the opponent submitted that one should look to the evidence of the behaviour of the parties. The opponent then submitted that such behaviour supported the position that the agreement contained express terms that Mr Parkinson and Mr Glynn would assign all intellectual property rights in relation to the TESS developments to Gnomon. The following are examples.
Mr Shepherd stated at [9] in his evidence that Gnomon entered into an agreement with Mr Parkinson and his firm to provide engineering services to Gnomon in relation to the developments of the TESS where Gnomon would hold the intellectual property rights to these developments. Mr Parkinson did not controvert that in his evidence in answer. Consistent with this, Mr Glynn and Mr Parkinson assigned their interests in memoranda of assignment in respect of two provisional patent applications to Gnomon on 22 October 2009 (exhibits RJKS-4 and RJKS-5 of Mr Shepherd’s evidence). The first provisional application is the priority document for the PCT application discussed in the background section of the present specification. Apart from these assignments, there is no direct evidence before me of any agreements or assignments in respect to any other intellectual property generated by Mr Glynn or Mr Parkinson.
Reflective of the prospect that the service agreement included terms, or at least an understanding, relating to the transfer of further intellectual property rights to Gnomon, two PCT applications derived from earlier provisional applications are in the name of Gnomon and name Mr Parkinson and Mr Glynn as inventors. Moreover, the TESS presentation bears the Gnomon name in several places. Also, the TESS paper lists the authors as Mr Glynn and Mr Parkinson of Gnomon.
The applicant submitted that the opponent bore the onus of establishing the applicant’s non-entitlement to the claimed invention. The applicant suggested that Mr Shepherd was in a position to have relevant knowledge of the precise relationships between Mr Glynn, Mr Parkinson and Gnomon and yet had provided no evidence of such. Moreover the applicant suggested that the authorities the opponent relied on did not assist the opponent. The issue in the present case was not whether an agreement existed but rather the terms of the agreement. The applicant cited Brambles Holdings Limited v Bathurst City Council, [2001] NSWCA 61, (2001) 53 NSWLR 153, 163-164 [25]-[26], to submit that post-contractual conduct is not admissible on the question of what a contract means as distinct from the question of whether a contract was formed. Further at [27] of the Brambles case:-
“… the construction of a contract is an objective question for the court, and the subjective beliefs of the parties are generally irrelevant in the absence of any argument that a decree of rectification should be ordered or an estoppel by convention found.”
The applicant subsequently noted that the opponent had failed to adduce any direct evidence of the terms of the service agreement. Furthermore the applicant indicated that it was improper to draw inferences of terms of the agreement based on post-contractual conduct or behaviour by reference to assignments of earlier provisional applications. The fact that there was evidence of written assignments of rights in relation to patent applications not the subject of this dispute was not a proper basis to submit or infer that a similar assignment of rights had been established for the subject matter of the present application.
On the evidence in the present case, I am satisfied a service agreement in some form existed between Mr Parkinson, his firm and Gnomon. The situation with Mr Glynn is less clear. The evidence indicates that Mr Glynn was involved alongside Mr Parkinson with the TESS developments. Mr Glynn is also listed as a co-inventor or co-author on documents related to those developments. Moreover, the applicant accepted in submissions that a contractual relationship existed between the co-inventors and Gnomon. I will presume that Mr Glynn was also engaged under a service agreement, whether that be independently or under Mr Parkinson’s firm.
In Khoury v Sherrard Pty Ltd, [2018] APO 20, the delegate, at [10], referred to an express provision in a service contract about who would own the intellectual property should any intellectual property be created from the design project. At [11], the delegate thus noted that it was envisaged that the requestor might create intellectual property in the course of their work.
The evidence from Mr Shepherd indicates that Mr Parkinson’s firm was engaged to provide engineering services to Gnomon under a service agreement. Mr Parkinson indicated specifically, at [5] in evidence in answer, that his firm was engaged to provide development services to Gnomon. Also, the opponent’s evidence is indicative that the service agreement had implied terms that the intellectual property rights for the TESS developments belonged to Gnomon. Mr Shepherd supported this at [9] of his evidence which was not controverted by Mr Parkinson. Thus, the present case may similarly suggest that the parties envisaged that the arrangement between them might create intellectual property.

Since the intellectual property terms in the present case are not explicit as in the Khoury case, I need to assess, according to the UBC decision, what intellectual property terms may be implied under the service agreement by the conduct of the parties. In the present case, the opponent effectively requests a finding in its favour on the basis of Mr Shepherd’s evidence at [9], the written assignment of two earlier provisional patent applications, and the naming of Mr Glynn and Mr Parkinson as inventors or authors on a few other Gnomon documents, for example the above-mentioned PCT applications in Gnomon’s name. The latter situation is somewhat similar to that in the UBC decision.
Referring again to the judgement of Emmett J in the UBC decision, at [39]:-
“… s 15(1)(c) clearly contemplates that there is something that is capable of assignment, disposition or alienation by the inventor, such that another person has title to it.”
At [40]:-
“It may not take very much to constitute an act or conduct that constitutes such an assignment, disposition or alienation or that gives rise, by implication, to such an assignment, alienation or disposition. UBC and Angiotech have not eschewed any claim that there was conduct or an act, apart from specifying UBC in the relevant patent request, that might constitute an assignment, alienation or disposition …”
The effective conclusion at [41] and [42] of the UBC decision was that specifying a party in the relevant patent request or as a nominated person was insufficient. This position was clearly supported by Stone J at [61] of the UBC decision.
The present case though has something more. As mentioned above, there is also the evidence of Mr Shepherd at [9] that, under the service agreement, Gnomon would hold the intellectual property rights to the TESS developments, which Mr Parkinson did not controvert in his evidence in answer. In fact, the only substantial comment from Mr Parkinson about the service agreement was to dispute its termination date. Moreover there is the written assignment of two earlier provisional patent applications to Gnomon during the time of the service agreement. Overall I am satisfied that the acts or conduct of the parties in the present case are sufficient to indicate that any intellectual property created by Mr Glynn and Mr Parkinson in relation to the TESS developments, during the time of the service agreement with Gnomon, would have belonged to Gnomon.
I find the service agreement was of such nature as to imply that the rights to any intellectual property arising from the TESS developments under the service agreement would have belonged to Gnomon. On the other hand, I have found above that the inventive concept in this case did not reside in those developments.
Whether There May Be Joint Entitlement
Section 59 also contains the following provision in respect to entitlement:-
The Minister or any other person may, in accordance with the regulations, oppose the grant of a standard patent on one or more of the following grounds, but on no other ground:
(a) that the nominated person is either:
(i)…; or
(ii)entitled to a grant of a patent for the invention but only in conjunction with some other person; …
The opponent did not plead this ground in its statement of grounds and particulars. The ground only came up in the opponent’s written submissions for the hearing. While the applicant initially submitted that the opponent should not be permitted to pursue this new argument at the hearing, the applicant did not press the objection at the hearing. In any case, the applicant had prepared submissions in response.
The opponent submitted that if the inventive concept were found to relate to the single contiguous block of material then the opponent would be entitled, at least as a joint owner, on the basis that the final inventive concept would not have come about without the development of the multi-block design as described and depicted in the TESS presentation. The opponent cited JMVB Enterprises Pty Ltd v Camoflag Pty Ltd, [2005] FCA 1474 at [132]. Quoting from [132]:-
“Rights in an invention are determined by objectively assessing contributions to the invention, rather than an assessment of the inventiveness of respective contributions. If the final concept of the invention would not have come about without a particular person’s involvement, then that person has entitlement to the invention. One must have regard to the invention as a whole, as well as the component parts and the relationship between participants. The fact that the parties were in collaboration can be a major consideration: see Iluka Midwest Ltd v Wimmera Industrial Minerals Pty Ltd (2001) 55 IPR 140; Re Upham and Commissioner of Patents [1998] AATA 852; (1998) 28 AAR 276; Re Applications by CSIRO and Gilbert [1995] APO 16; (1995) 31 IPR 67; Row Weeder Pty Ltd v Nielsen [1997] APO 38; (1997) 39 IPR 400; Sunstrum & Payette v Boland (2003) 59 IPR 146.”
It may be noted that the cases that the opponent relied upon generally related to disputes and the principles to be applied about the contributions of individuals to the inventive concept (for example, Upham at [20]). In the present case, there is no such dispute. Instead the opponent’s position is that the final concept would not have come about without the prior work done by the inventors at Gnomon.
The further TESS developments, as in the TESS presentation and the TESS paper, are closely related with the present inventive concept. Notably the latter relates in part to a contiguous block of heat-absorbing material in the form of machinable sintered graphite, while the former relates to the multiple section block configuration. I would think the former was a pointer to the subsequent crystallising of the present inventive concept by the inventors.
The TESS presentation appears to be in the nature of a PowerPoint® presentation. This would suggest there was presentation to a number of personnel. On the other hand, many slides are designated as commercial-in-confidence. The TESS paper is designated as a draft. Thus there would appear to have also been an obligation of confidence on any viewers of the presentation or the paper. As mentioned earlier, the TESS presentation contains technical drawing pages variously dated in January, February or March 2011. The priority date of the present application is in August 2011. That is, the TESS presentation may be dated to about five to seven months before the priority date. I have no evidence before me of a public presentation of the TESS presentation before the priority date or that the status of the TESS presentation had changed from commercial-in-confidence before the priority date. In the present case, I would find the further TESS developments were not published before the priority date.
The result of the above is that the inventors in the present case could not have reached the inventive concept without their knowledge of the further TESS developments undertaken at Gnomon. I would find that Gnomon is jointly entitled on this basis.
CONCLUSION
In the present case, I have found that the inventive concept did not arise while the inventors were engaged with Gnomon.
Nonetheless, I have also determined whether the nature of the service agreement with Gnomon would have enabled the transfer of intellectual property rights to Gnomon. I have found the service agreement would have enabled such transfer of rights.
As the inventive concept though did not arise while the inventors were engaged with Gnomon, I conclude the opponent has not established that the applicant would not be entitled to a grant of a patent for the invention in the present case.
On the other hand, I have found the inventors in the present case could not have reached the inventive concept without their knowledge of the further TESS developments undertaken at Gnomon. I conclude the parties are jointly entitled to the claimed invention.
I determine the application should proceed jointly in the names of Climate Change Technologies Pty Ltd and 1414 Degrees Limited.
COSTS
Both parties sought their costs in the present matter. The opponent is unsuccessful on the ground of opposition originally pursued by the opponent but is successful on a ground of opposition not originally pursued. In these circumstances, I make no award of costs.
M. G. Kraefft
Delegate of the Commissioner of Patents