Aristocrat Australia Pty Ltd and Commissioner of Patents and IGT (Party Joined)
[2009] AATA 873
•12 November 2009
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2009] AATA 873
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2008/5564
GENERAL ADMINISTRATIVE DIVISION ) Re ARISTOCRAT AUSTRALIA PTY LTD Applicant
And
COMMISSIONER OF PATENTS
Respondent
And IGT Party Joined
DECISION
Tribunal Mr Egon Fice, Member Date12 November 2009
PlaceMelbourne
Decision The Tribunal affirms the decision under review.
(sgd) Egon Fice
Member
Patent application – failure to pay acceptance fee within prescribed time – extension of time – mandatory and discretionary grounds – meaning of error and omission – nature of Tribunal hearing – presumption of receipt of notice under the Evidence Act - basis for exercise of discretion
Evidence Act 1995 - s 160
Patents Act 1952
Patents Act 1990
Regulation 22.11 of Patents Regulations 1991
Chalk v Commissioner for Superannuation (1994) 50 FCR 150
Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 41 FLR 338
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Ferocem Pty Ltd v Commissioner of Patents (1994) 49 FCR 205
G S Technology v Commissioner of Patents [2004] FCA 1017 (unreported decision 9 August 2004)
Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344
Kimberley-Clark Ltd v Commissioner of Patents (1988) 84 ALR 685
Kimberley-Clark Ltd v Commissioner of Patents and Another (1988) 84 ALR 685
Maynard v Secretary, Department of Social Security [1993] FCA 402 (unreported 26 August 1993)
Re Lazer Safe Pty Ltd and the Commissioner of Patents [2001] AATA 967
Shi v Migration Agents’ Registration Authority (2008) 235 CLR 286
REASONS FOR DECISION
12 November 2009 Mr Egon Fice, Member 1. On 20 March 2002 IGT filed an international application under the Patent Co-operation Treaty (PCT) (the PCT application) for a patent regarding a method and apparatus for downloading a peripheral code to a peripheral gaming device. IGT is an entity based in the United States of America (the United States).
2. The Commissioner of Patents (the Commissioner) accepted IGT’s PCT application on 22 December 2006 and advertised the acceptance on 11 January 2007. On that day, the Commissioner also issued an Invitation to Pay (ITP) the acceptance fee. The due date for payment of the acceptance fee was 11 April 2007.
3. A notice of opposition to the grant of the patent was filed by Aristocrat Australia Pty Ltd (Aristocrat) on 11 April 2007.
4. IGT failed to pay the acceptance fee by the due date and therefore the Commissioner sent a letter to IGT on 11 July 2007 advising it that its application had lapsed. On 13 July 2007 IGT filed a request under s 223 of the Patents Act 1990 (the Patents Act) to extend time for paying the acceptance fee. The Commissioner advertised the extension application and received a notice of opposition to the extension from Aristocrat on 10 September 2007.
5. A delegate of the Commissioner held a hearing in Canberra on 1 October 2008 regarding the extension of time application. On 29 October 2008 the delegate decided that IGT had shown the existence of an error or omission which caused the failure to pay the acceptance fee and therefore granted the extension of time under s 223(2)(a) of the Patents Act. However, the delegate was not satisfied that the failure to pay was due to an error made by the Commissioner’s office or to circumstances beyond the control of the person concerned and therefore declined to grant the extension of time under s 223(2)(b), s 223(1) or s 223(2A).
6. Dissatisfied with the delegate’s decision, Aristocrat seeks a review of the delegate’s decision pursuant to s 224 of the Patents Act.
7. The issues which arise in this matter are whether:
(a)the evidence establishes a connection between the actions of IGT’s agent and the missed deadline for payment of the acceptance fee;
(b)the error was simply a failure to pay the acceptance fee by the due date;
(c)grounds exist for the exercise of discretion in permitting an extension of time; and
(d)an extension of time must be granted because IGT took due care, as required in the circumstances, to ensure that payment was made on time.
THE NATURE OF A REVIEW BY THE TRIBUNAL
8. Mr N Mountford, who appeared on behalf of Aristocrat, submitted that the delegate erred in granting an extension of time under s 223(2)(a) of the Patents Act. He had set out in Aristocrat’s statement of facts and contentions some eight findings made by the delegate and submitted that there was insufficient evidence to establish at least three of those findings. Further, Mr Mountford was critical of the delegate’s decision to rely on an oral statement made by Mr Clark, a patent attorney of Blake Dawson Patent Attorneys (Blake Dawson), who appeared on behalf of IGT. Mr Mountford submitted that the statement made by Mr Clark was not part of the evidence relied on in support of the extension of time application and, in any event, Mr Clark’s statement was unsworn and therefore did not comply with the requirement set out in Regulation 22.11 of Patents Regulations 1991 (Patents Regulations).
9. Regulation 22.11(1) provides that for the purposes of sections 223(2) or (2A) of the Patents Act, an extension of time application must have with it a declaration setting out the grounds on which the application is made. As I understood Mr Mountford’s submissions, he maintained that because Mr Clark’s unsworn statement made to the delegate was not before the delegate, I should disregard it. With respect to Mr Mountford, this submission is incorrect.
10. In fact, Mr Mountford’s focus on the errors made by the delegate rather than on the evidence which was before the Tribunal on the hearing of this matter, appears to me to disclose a misunderstanding of the nature of a review before this Tribunal. This was not particularly helpful, given that the hearing before the Tribunal is a de novo hearing and I am required to arrive at the correct or preferable decision rather than simply identifying any errors which the delegate may have made.
11. Smithers J in Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 made clear the difference between a review of the reasons for the decision and the decision itself. He said, at 77:
It might be thought that it would be open to the Administrative Appeals Tribunal not to decide for itself whether a decision made by an administrator was the right decision which ought to have been made in the circumstances but rather to satisfy itself that the decision of the administrator was one which an administrator acting reasonably might have made. But to do this would be to review the reasons for the decision rather than the decision itself. It is the actual decision which by virtue of s 25(1) and (4) of the Administrative Appeals Tribunal Act the Tribunal is authorized and required to review. The duty of the Tribunal is to satisfy itself whether a decision in respect of which an application for review is duly instituted is a decision which in its view, was objectively, the right one to be made. Merely to examine whether the administrator acted reasonably in relation to the facts, either as accepted by him or as found by the Tribunal may not reveal this.
12. The approach of Smithers J in Drake’s case was enlarged upon by the High Court in Shi v Migration Agents’ Registration Authority (2008) 235 CLR 286. In that case, Kirby J cited with approval the decision of Smithers J in Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 41 FLR 338. There, Smithers J said it was important to observe that the Tribunal is not constituted as a body to review decisions according to the principles applicable to judicial review. In other words, the Tribunal is an instrument of government administration and is designed to act where decisions have been made in the course of government administration but which are, in the view of the Tribunal, not acceptable.
13. Kirby J in Shi’s case also cited with approval the reasons for decision of Bowen CJ and Deane J in Drake’s case, where their Honours said, at 68:
The question for the determination of the Tribunal is not whether the decision which the decision-maker made was the correct or preferable one on the material before him. The question for the determination of the Tribunal is whether that decision was the correct or preferable one on the material before the Tribunal.
14. Also worth noting are the reasons for decision of Kiefel J in Shi’s case. She said, at 327:
The term "merits review" does not appear in the AAT Act, although it is often used to explain that the function of the Tribunal extends beyond a review for legal error, to a consideration of the facts and circumstances relevant to the decision. The object of the review undertaken by the Tribunal has been said to be to determine what is the "correct or preferable decision" [154]. "Preferable" is apt to refer to a decision which involves discretionary considerations. [155]. A "correct" decision, in the context of review, might be taken to be one rightly made, in the proper sense.[156]. …
The reasons of the members of the Full Court of the Federal Court in Drake v Minister for Immigration and Ethnic Affairs [158] confirm what is apparent from s 43(1), that the Tribunal reaches its conclusion, as to what is the correct decision, by conducting its own, independent, assessment and determination of the matters necessary to be addressed [159]. …
15. Given the nature of a review before this Tribunal as expressed in Shi’s case, it is clear that I should have regard to all of the evidentiary material put before me without objection. I am not concerned with the reasons given by the delegate for allowing the extension of time. Rather, I must determine whether the delegate came to the correct or preferable decision.
16. When this matter came on for hearing before the delegate, IGT’s application for an extension of time based on s223(2)(b) of the Patents Act had been withdrawn. In the submissions before me, Mr Demitriadis, who appeared on behalf of IGT, submitted that IGT continued to rely on section 223(2A) which mandates granting of an extension of time where the person concerned took due care to ensure compliance with the Patents Act within the prescribed time. Accordingly, I am required to determine whether it is correct to extend time for the payment on the basis of s 223(2A) or, alternatively, whether it is preferable to extend time on the basis of s 223(2)(a).
ERROR OR OMISSION
Section 223(2) of the Patents Act provides:
(2) Where, because of:
(a) an error or omission by the person concerned or by his or her
agent or attorney; or
(b) circumstances beyond the control of the person concerned;
a relevant act that is required to be done within a certain time is
not, or cannot be, done within that time, the Commissioner may, on
application made by the person concerned in accordance with the
regulations, extend the time for doing the act.
17. The meaning of the expression error or omission was dealt with at length by Jenkinson J in Kimberley-Clark Ltd v Commissioner of Patents (1988) 84 ALR 685. His Honour was dealing with that expression as it was then found in s 160(2)(a) of the Patents Act 1952, in an application for the grant of an extension of time in which to file a notice of opposition to the grant of a patent. Section 160(2)(a), although expressed slightly differently to s 223(2), nevertheless referred to: an error or omission on the part of the person concerned or of his agent or attorney. Jenkinson J said, at 694-695:
It is in my opinion difficult to suppose that only the inadvertences and accidental steps, and not errors resulting from faulty reflection, of [officers or employees of the Patent Office] were intended by the draftsman to be within s 160(1). Further, the word “error” is not easily assigned a clear meaning restricted by reference to one or several particular categories of flawed mental function. The attempt is likely to lead to the drawing of fine and often unrealistic distinctions. And some errors of judgment by agents and attorneys may be as bizarre and as little to be anticipated as lapses of memory and accidental slips. Although the latter kinds of error may be those which the draftsman had principally in mind, I do not think the phrase “error or omission” should be given by construction the restricted meaning which the delegate assigned, and accordingly I conclude that this ground of the application has been established. It is in my opinion difficult to suppose that only the inadvertences and accidental steps, and not errors resulting from faulty reflection, of the former class of persons were intended by the draftsman to be within s 160(1). Further, the word “error” is not easily assigned a clear meaning restricted by reference to one or several particular categories of flawed mental function. The attempt is likely to lead to the drawing of fine and often unrealistic distinctions. And some errors of judgment by agents and attorneys may be as bizarre and as little to be anticipated as lapses of memory and accidental slips. Although the latter kinds of error may be those which the draftsman had principally in mind, I do not think the phrase “error or omission” should be given by construction the restricted meaning which the delegate assigned, and accordingly I conclude that this ground of the application has been established.
I do not think that the conclusion I have reached reduces s 160(2)(a) to a mere general power of extension. By no means every judgment by “the person concerned” or by “his agent or attorney” which can be shown to have been mistaken will answer the description “error or omission” in the ordinary meaning of those words, which in their context carry, in my opinion, a connotation of obviousness in error.
18. It seems clear to me that in order for IGT to succeed in establishing there was an error or omission by its agent or attorney, there must be probative evidence before me to support a finding that what the agent or attorney did was more than simply a failure to pay the acceptance fee within the prescribed time. The evidence must disclose that the failure to pay resulted from an error or omission, as those words are understood in their ordinary sense.
19. In a letter dated 22 December 2006, the Commissioner wrote to Blake Dawson stating that there were no objections to IGT’s patent application. The Commissioner said that IGT’s application was accepted on 22 December 2006 and that a notice of that acceptance would appear in the Supplement to the Australian Official Journal of Patents on 11 January 2007. The letter also contained the following advice:
For applications filed after 31 August 2002 or that entered the National Phase after 31 August 2002, a fee for acceptance of an application applies. …
20. By a letter dated 11 January 2007, it appears that the Commissioner sent to Black Dawson an ITP. The ITP noted that the date for payment of the application fee was 11 April 2007.
21. In a letter dated 11 April 2007, Griffith Hack, Patent and Trademark Attorneys, acting for Aristocrat, wrote to the Commissioner enclosing a Notice of Opposition to the grant of the patent to IGT. On 13 April 2007, the Commissioner wrote to Blake Dawson stating that a Notice of Opposition had been filed on 11 April 2007. The Commissioner said that the Notice of Opposition would be advertised in the Official Journal (supplement) on 26 April 2007. On 11 July 2007 the Commissioner sent Blake Dawson a letter stating that IGT’s patent application had lapsed due to failure to pay the acceptance fee by the due date. Griffith Hack was also notified that the IGT patent application had lapsed. On 11 July 2007 Griffith Hack lodged with the Commissioner a statement setting out the grounds and particulars relied upon in its application to oppose the grant. In a letter dated 13 July 2007, Blake Dawson applied for an extension of time within which to pay the acceptance fee for IGT’s patent application.
22. Ms Tracy Turner, who described herself as a practice group assistant with Blake Dawson, made a statutory declaration dated 3 August 2007. In that statutory declaration, Ms Turner described the sequence of events leading up to and resulting in IGT’s failure to pay the acceptance fee by the due date. She said she received the letter dated 11 January 2007 from the Commissioner noting acceptance of IGT’s patent application. She said that Blake Dawson received the notice of acceptance on 29 December 2006. She also said that she entered the details of the acceptance into Blake Dawson’s management system, which is known as Ozmark. Ms Turner said that on 11 January 2007, she was aware that an ITP had not been received and she therefore checked the filing date of the application to determine whether it was filed prior to 31 August 2002 in order to determine whether acceptance fees were in fact payable. Ms Turner said that on 11 January 2007, after viewing the official filing receipt, she formed the opinion that the IGT patent application was filed on 20 March 2002 and therefore no application fee was payable. Ms Turner did not exhibit the official filing receipt to her declaration. However, Mr Mountford did not raise this matter in the course of the hearing.
23. According to Ms Turner, having determined that acceptance fees were not payable, on 1 February 2007 she drafted a letter to the attorneys for IGT in the United States stating that acceptance fees were not payable on IGT’s PCT application because it was filed before 31 August 2002. Mr David Clark, a partner at Blake Dawson, signed that letter.
24. It appears nothing further happened until 12 July 2007 when Ms Turner said she received notification from the Commissioner informing her that IGT’s application had lapsed due to failure to pay continuation fees. The Commissioner sent a further letter on 16 July 2007 correcting its previous letter, explaining that the lapse had occurred because of IGT’s failure to pay the acceptance fees. Ms Turner said she telephoned the Commissioner’s office and advised a customer service officer that Blake Dawson had not received an ITP and she believed that acceptance fees were not payable on IGT’s patent application. It was at that time, according to Ms Turner, that the customer service officer informed her that an IPT did issue on 11 January 2007. Ms Turner said she then requested a copy of the ITP which she received on 13 July 2007. She was also informed by the customer service officer that although she was correct about the filing date of IGT’s application, the application entered the national phase on 28 October 2003 and therefore acceptance fees were payable. Upon receipt of that information, Ms Turner said she immediately made an application for an extension of time to pay fees.
25. Mr Clark also provided a statutory declaration in support of IGT’s application for an extension of time to pay the application fees. With all due respect to Mr Clark, much of the material in the statutory declaration constitutes submissions rather than evidence. One of those submissions relates to a contention made by Aristocrat that there were adequate systems in place to ensure acceptance fees were paid. I understood that to be a reference to the Ozmark docketing system used by Blake Dawson. It was used to record the acceptance details of applications on receipt of a notice of acceptance. The Ozmark system then recorded deadline dates for payment of acceptance fees. Exhibited to Mr Clark’s declaration was a copy of the Ozmark page relating to IGT’s application. According to Mr Clark, in the column under the heading Active, is the date 11 March 2007, which he said was a reminder date. This was followed in the next column, under the heading Deadline, with the date 11 April 2007 and the event recorded as acceptance fee paid.
26. The fact that this entry exists in Blake Dawson’s Ozmark system raises the question as to why Ms Turner apparently ignored the warning given by the Ozmark system about the deadline date. However, Ms Turner was not called to give evidence nor was she called for cross-examination. Mr Mountford simply speculated that it appeared Ms Turner did not make any further enquiries that one would think she would have, given the warning on the Ozmark system. Mr Mountford was also critical of the fact that Ms Turner made no mention of the Ozmark reminder system although, to be fair to Ms Turner, she said she did enter the details of the acceptance of the patent application into the Ozmark system; which was evidenced by the entry exhibited to Mr Clark’s statutory declaration.
27. Mr Mountford also submitted that despite Ms Turner’s statement that, to the best of her knowledge, the ITP said to have been sent by the Commissioner had not been received at Blake Dawson’s Sydney office by 1 February 2007, I should rely on s 160 of the Evidence Act 1995 (the Evidence Act). In effect, s 160 provides that it is presumed, unless sufficient evidence is adduced to raise doubt about the presumption, that a postal article sent by prepaid post and addressed to a person at a specified address in Australia or in an external Territory, was received at that address on the fourth working day after having been posted. There are two problems with this submission.
28. The first problem with Mr Mountford’s submission is that s 160 of the Evidence Act applies only to a postal article sent by prepaid post addressed to a person at a specified address in Australia. Because, as is the custom, the Commissioner did not appear on the hearing of this matter, save for the fact that included in the s 37 documents was the ITP dated 11 January 2007 addressed to Blake Dawson at its Sydney address, there was no evidence of the sending of an article by prepaid post. If I am wrong about that, the second problem is that Ms Turner’s evidence in this matter, which was not contradicted, states that at least by 1 February 2007, Blake Dawson had not received the ITP. In fact, her evidence was that when she contacted the Commissioner’s office on 13 July 2007, she told the customer service officer that she had not received an ITP and requested a copy be sent to her office.
29. Therefore, even if it were possible for Aristocrat to rely on the presumption set out in s 160 of the Evidence Act, the evidence before me clearly raises doubt about that presumption. In fact, on the evidence before me, I must find that Blake Dawson did not receive the ITP until after Ms Turner requested it on 13 July 2007. That finding of course does not establish that the Commissioner, Deputy Commissioner or an employee or layperson providing service for the benefit of the Patent Office failed to send the ITP to Blake Dawson in about January 2007. There was no evidence before me about an error or omission made by any of those persons and, in my opinion, Mr Dimitriadis appropriately considered that s 223(1) of the Patent Act was not applicable.
30. As best I can determine, the reason why the application fee was not paid in time was because Ms Turner, on 11 January 2007, formed the view that, based on the lodgement date of the PCT application, no application fee was payable. In her statutory declaration Ms Turner made no reference to a document referred to by Mr Mountford in his statutory declaration, which is entitled Bibliographic Details at Acceptance (Bibliographic Details). According to Mr Mountford’s statutory declaration, that document accompanied the notice of acceptance. The Bibliographic Details document records that the national phase entry date for IGT’s application was 28 October 2003. The letter of acceptance dated 22 December 2006 stated that a fee was payable for acceptance of an application that entered the national phase after 31 August 2002.
31. Therefore, if Ms Turner received the Bibliographic Details document, it should have been immediately apparent to her that a fee for acceptance was applicable to IGT’s application. However, Mr Mountford did not address this clearly relevant omission by Ms Turner. Nor, as I have already noted, was Ms Turner asked to attend for cross‑examination. In those circumstances, it is not appropriate, in my opinion, to speculate about why Ms Turner did not act on all of the information set out in the Bibliographic Details document. A range of possible explanations exist. As the matter stands on the evidence before me, I must accept the uncontroverted evidence of Ms Turner as contained in her statutory declaration. Namely, that her focus was on the filing date, 20 March 2002, which is in accordance with the Bibliographic Details document, and which precedes 31 August 2002; after which the application would have been liable to a fee for acceptance.
32. Furthermore, attached to Ms Turner’s statutory declaration was a letter from Blake Dawson to IGT’s attorneys in the United States in which she expressly advised those attorneys that a fee was not payable on IGT’s application because it was filed prior to 31 August 2002. Without further evidence from Ms Turner, it is reasonable to infer that Ms Turner advised IGT that no acceptance fee was payable on its patent application solely because it was filed prior to 31 August 2002. She either overlooked, or for some other reason, did not consider the fact that IGT’s patent application entered the national phase on 28 October 2003 thereby making IGT liable to pay a fee for acceptance. Quite plainly, that oversight or omission was an error made by Ms Turner. It was an error in the primary meaning of that word which is a mistake, inaccuracy or misapprehension (Chambers 21st Century Dictionary).
33. Mr Mountford sought to make much of the fact that Blake Dawson’s Ozmark computer software system should have alerted Ms Turner to the due date to pay the acceptance fee. Mr Clark’s statutory declaration and the attachment, which is a copy of the Ozmark screen page relevant to IGT’s application, clearly indicated that the receipt of the notice of acceptance was entered on the Ozmark system as stated in Ms Turner’s declaration. That triggered a reminder indicating the deadline to pay the acceptance fee was 11 April 2007. Mr Mountford submitted that because the Ozmark reminders were ignored, this was evidence of an intention by IGT and Ms Turner not to pay the acceptance fee. As I understood his submission, what follows is that either Ms Turner or IGT, or both, did not fail to make payment of the acceptance fee due to an error, but rather made a conscious decision not to follow a reminder system. I cannot accept that submission.
34. Ms Turner’s uncontroverted evidence was that upon being notified of acceptance of IGT’s patent application, she formed the view, because it was filed prior to 31 August 2002, that acceptance fees were not payable. She then caused a letter to be sent to IGT’s attorneys in the United States stating that acceptance fees were not payable. At that point in time Ms Turner was clearly in error. It was that error which appears to have resulted in Ms Turner ignoring the Ozmark system warnings for the deadline regarding payment of acceptance fees. Having formed an erroneous view that an acceptance fee was not payable, it is reasonable to infer that despite entries in the Ozmark system, she maintained her erroneous view which was conveyed to IGT through its American attorneys. I find that it was Ms Turner’s erroneous view which caused the failure to pay the acceptance fee within the time prescribed.
EXERCISE OF DISCRETION
35. As I have found that failure to pay the acceptance fee within the prescribed time resulted from an error made by IGT’s agent or attorney, I must decide whether it is appropriate in this case to exercise the discretion given to the Commissioner under s 223(2) of the Patents Act. Both parties referred me to the Tribunal’s decision in Re Lazer Safe Pty Ltd and the Commissioner of Patents [2001] AATA 967. In that decision, Deputy President Wright summarised the principles applicable to the exercise of discretion in similar cases. However, as will become apparent, while it may be useful to understand the broad principles upon which a general discretion may be exercised, those principles may not be applicable to every set of circumstances, nor do they establish any hard and fast rule.
36. The most frequently cited case dealing with extension of time applications in patent cases is that of Kimberley-Clark Ltd v Commissioner of Patents and Another (1988) 84 ALR 685. In that case, Jenkinson J was dealing with an extension of time under s 160(2)(a) of the Patents Act 1952, the predecessor to the current Patents Act. Therefore, not only was that an application in respect of a differently worded statutory provision, but it was also in respect of an extension of time to lodge a notice of opposition to the grant of a patent rather than the payment of an application fee. In my opinion, it is worthwhile bearing in mind what Northrop J said in Maynard v Secretary, Department of Social Security [1993] FCA 402 (unreported 26 August 1993) where he said, at 3:
… An unfettered discretion conferred by statute cannot be fettered by a decision of a court. … The reference to other authorities may be interesting but essentially they are illustrations of other cases, in most cases the facts of which are completely different to the facts before the Court. They may be helpful in understanding what may be relevant. They are not binding in any sense at all and to that extent it is often unwise to refer to too many cases because it detracts from the real issue that the Court must decide on the facts before it.
37. Mr Mountford submitted that, in any event, the Tribunal should not exercise the discretion provided in s 223 of the Patents Act because full and frank disclosure regarding failure to pay the application fee within the prescribed period had not been made. In particular, he submitted that Ms Turner’s evidence did not disclose key elements in gaining a full understanding of the circumstances which led to the failure to make the payment within the prescribed time. Mr Mountford submitted that Ms Turner did not describe Blake Dawson’s standard process for paying acceptance fees nor the fact that reminders were in place to monitor payment of the acceptance fee.
38. According to Mr Mountford, Ms Turner’s failure to disclose the Ozmark system and its use in this matter made it impossible to know whether there was a very different process in place for the payment of acceptance fees; and whether Ms Turner’s error was actually connected to the payment of the fee. Mr Mountford submitted that the subsequent evidence of Mr Clark regarding the Ozmark system did not remedy the failure to fully disclose all of the circumstances which resulted in non-payment. Aristocrat contended that Mr Clark’s evidence did not explain the standard practice for paying fees and did not address the process for handling reminders issued in respect of the deadline to pay the acceptance fees. Therefore, so Aristocrat contended, while there was a reminder system in place, Ms Turner did not refer to it and there was no evidence to show whether, or why, such reminders were not acted on.
39. It should be borne in mind that although s 160(2) of the Patents Act 1952 is couched in similar language to that used in s 223(2) of the Patents Act, the subject matter in the Kimberley-Clark case hinged on the time limitation set out in s 59(1) of the Patents Act 1952, which limited the time for lodging a notice of opposition to the grant of a patent to three months. Section 59(1) sets out the numerous grounds upon which an application to oppose may be based. It seems that in the Kimberley‑Clark case, the main ground of opposition was that set out in s 59(1)(d). However, Jenkinson J noted that in the material before him, there was no clear disclosure of the way in which any of the circumstances said to be errors or omissions, affected the mind of the person making the decision. He said that the material which was put before the delegate in that case hardly justified more than speculation as to the mental processes by which the decision was reached.
40. Therefore, in his Honour’s view, the approach taken by Bowen CJ in Vangedal-Nielsen v Commissioner of Patents (1980) 33 ALR 144 was relevant to the exercise of the power to extend the time for the filing of a Notice of Opposition under s 59(1) of the Patents Act 1952. It was on that basis that Jenkinson J said, at 698:
… In order to make out the “proper case … justifying an extension” to which Bowen CJ referred in that case, an applicant would in my opinion have to go beyond a disclosure of the processes by which an agent's errors came to be committed, and would have to expose frankly, inter alia, all the conduct, knowledge, beliefs and mental processes of the applicant (or, in the case of corporation aggregate, of the relevant officers and other agents) relevant to an understanding of the way the failure to do the act or take the step occurred, or relevant to an evaluation of the reasonableness of that conduct.
41. This led Jenkinson J to conclude that s 160(2)(a) of the Patents Act 1952 conferred a power which was not to be granted lightly and which was to be invoked only on a prompt, frank, comprehensive and clear disclosure of all the circumstances relevant to the weighing of the discretionary considerations upon which grant or refusal of an extension of time will depend.
42. Despite what was said in the Kimberley-Clark case, as Burchett J said in Ferocem Pty Ltd v Commissioner of Patents (1994) 49 FCR 205, at 208:
It is quite clear that Jenkinson J was here construing s160, as a special provision, and was not laying down rules for the exercise of general discretions to grant extensions of time. Indeed, the 1952 Act also included, in s59(1), a general provision for an extension of time for the performance of the very act with which Kimberly-Clark was concerned. But the exercise of the discretion under s59 was not in issue before Jenkinson J.
Burchett J was critical of the applicant in Ferocem for lifting out of context that with which Jenkinson J was concerned. In the Ferocem case, the Court was concerned with Regulation 5.10 of the Patents Regulations 1991. His Honour then said, at 208:
The idea that such a broad discretion can validly be reduced by a decision maker to an insistence upon "imperative" compliance with particular requirements has repeatedly been rejected by the courts.
His Honour went on to cite a number of cases which supported that proposition.
43. In a different context, the Full Court of the Federal Court dealt with an extension of time application in Chalk v Commissioner for Superannuation (1994) 50 FCR 150. Davies J referred to the classic exposition of factors to be considered on an application to extend time by Wilcox J in Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344. Davies J pointed out that the principles set down by Wilcox J in the Hunter Valley Developments case did not limit the factors which might arise from the context in which particular statutory discretion to extend time arises. He said, at 155:
Most provisions which authorise an extension of time are instances of beneficial legislation which, accordingly, should be applied beneficially.
He also said, at 156:
In the exercise of this discretion, it may be more important to consider the consequences of extending or refusing to extend time than to debate the reasons why the act was not done in time.
44. Perhaps the case which, factually, comes closest to the matter before me was that of G S Technology v Commissioner of Patents [2004] FCA 1017 (unreported decision 9 August 2004). In that case Spender J was concerned with the exercise of discretion under s 223 of the Patents Act as a result of the failure of the applicant to pay a continuation fee under s 227(1). Failure to pay the continuation fee resulted in the application lapsing. The same consequences arise out of the failure of IGT to pay the application fee within the prescribed time. Spender J said, at [50]:
Section 223 of the Act is a remedial section designed to advance the purposes of the Act and, to that end, permitting the forgiving of error or mistake where it is appropriate to do so.
45. Spender J noted that it was a prerequisite that there be a finding of an error or omission to enliven the Commissioner’s discretion. He referred to the Ferocem case, stating it indicated that in exercising discretionary powers relating to extensions of time in opposition procedures, the emphasis should be on taking all of the circumstances into account. He then said, at [56]:
In cases relating to extensions of time to restore an application, the applicant's interests are paramount because refusal of the extension is an abrupt end to the applicant's rights to its invention. One important consideration in these matters is whether the failure to pay the continuation or renewal fee was intentional.
46. Spender J cited with approval the Full Court’s decision in Chalk’s case and the Tribunal’s decision in Sanyo Electric. He also found, in the case before him, that it was plain the applicant wished to continue with its application; that instructions had been given by the principal to the agent to pay the fees; and that the error or omission which led to the failure to pay was the fault of the agent. Although he pointed out that the decision whether to grant an extension was one for the Tribunal rather than for the Court, he ventured to suggest that the considerations in favour or an extension in that case seemed to be quite persuasive. He also noted that attempts were made to remedy the error as soon as the consequences were discovered.
47. It is also of passing interest that in the GS Technology case, there was a failure to place the due date for the continuation fee in a diary or a reminder system. The applicant’s representative in that case believed that the continuation fees were payable at a later date and he thought no more about the continuation date until he received a letter from the patent office to tell him that the application had lapsed.
48. His Honour said that the reference to a failure to have a reminder system or a failure by placing an incorrect date on the reminder system is truly a red herring on the question of the existence of an error or omission. His Honour was careful to point out that whether the patent attorneys acting for the applicant knew the date was erroneous or that an inference could be drawn that many patent attorneys had systems in place for automatic generation of relevant diary reminders, was simply irrelevant. This was because the applicant was not a patent attorney.
49. Spender J also found that the Tribunal’s decision regarding refusal to exercise the power to grant an extension of time based on the failure to put in place a proper diary or reminder system, which it said, was not without moral fault and therefore not deserving of granting an indulgence, was simply incorrect. The discretion could not be fettered in that way. In fact, the observations of Jenkinson J in Kimberley-Clark specifically noted that an extension can occur with or without moral fault on the part of the agent.
50. In my opinion, even if Ms Turner has not disclosed reasons for not following Blake Dawson’s Ozmark system, that is beside the point. The evidence before me clearly indicates Ms Turner had formed the erroneous view that no fee was payable. She caused Blake Dawson to write a letter to that effect to IGT’s American attorneys. The letter stated:
Acceptance fees are not payable on this application as it was filed prior to 31 August 2002.
51. Ms Turner’s letter also advised the American attorneys that the notice of acceptance had been received and that the acceptance had been advertised in the Official Journal of Patents on 11 January 2007. She asked the attorneys to re‑examine the accepted specification and to inform Blake Dawson if they noticed any errors. Ms Turner also pointed out that any person could file notice of opposition within three months of the date of the acceptance.
52. Ms Turner advised the American attorneys that if no opposition was filed, the patent would be sealed and the deed of letters of patent would issue as soon as possible. She also reminded them that search results issued by foreign patent offices on corresponding applications before the patent grant on the present application needed to be filed within six months of the issue date of the search results. Ms Turner reminded the attorneys to review their files relating to corresponding applications and to forward to Blake Dawson a copy of any relevant search results. The letter clearly discloses an intention to maintain the application in force.
53. In my opinion, the issue regarding non-disclosure of the use made by Ms Turner of the Ozmark system is a red herring. Even if it were a relevant consideration in the exercise of discretion, Mr Clark’s statutory declaration was before me at the hearing of this matter and it clearly explained the operation of the Ozmark system and had attached a copy of the relevant screen page. In the absence of any evidence that the ITP was received by Blake Dawson prior to Ms Turner requesting that document on 13 July 2007 from the Commissioner, there seems to be nothing remarkable about the fact that Ms Turner ignored the deadline date on the Ozmark system. She had already formed the view that an acceptance fee was not payable.
54. Accordingly, I find on the material before me, that there was a full disclosure of the relevant circumstances giving rise to the failure by IGT to pay the acceptance fee. Although Mr Clark’s statutory declaration was not before the delegate, it was before me. Consistent with the decision of the High Court in Shi, I am required to make a decision in this matter based on the evidence admitted in the course of hearing this matter. It is therefore not open to Aristocrat to argue that IGT has not made full disclosure of the operation of the Ozmark system.
55. A proper reading of s 223 of the Patents Act also discloses the beneficial nature of the provisions contained in that section. It is clearly designed to avoid having errors or omissions made by persons in the Commissioner’s office, or by agents or attorneys of the patent applicant, being visited on the patent applicant. That is the remedial nature of the section. In this case, the error was not made by IGT but rather by its agents or attorneys in Australia. Furthermore, the documentary evidence before me clearly discloses an intention by IGT to maintain the application. Therefore, it should not be suddenly deprived of its rights under the patent application which had been accepted because of an error made by its agent in giving incorrect advice regarding whether or not the fee was payable.
56. Such an issue is, always, a balancing exercise. On the other side of the ledger is whether Aristocrat will suffer any serious prejudice as a consequence of an extension of time being granted. As Mr Dimitriadis submitted, and Mr Mountford did not dispute this, if I was to grant an extension of time, Aristocrat would in any event be in a position to oppose the patent application on its merits. In other words, it would lose nothing. It intended to oppose IGT’s application on its merits and it will, if an extension of time is granted, be returned to the same position. Quite clearly, the balance favours the grant of an extension of time. Otherwise, IGT’s rights to its invention would be brought to an abrupt end. It follows, in my opinion, that I should grant the extension of time sought by IGT.
57. The second basis upon which IGT makes its application for an extension of time is under s 223(2A). According to Mr Dimitriadis, I should be satisfied that IGT took due care as required in the circumstances, to ensure payment of the application fee. If that could be established on the evidence, I must extend the time for the payment of the application fee.
58. The problem with reliance on s 223(2A) is that there is insufficient evidence before me to determine whether IGT in fact took due care. Other than appointing attorneys or agents in Australia to oversee its patent application, there was no evidence at all regarding the conduct of IGT. It follows that I must find that the provisions set out in s 223(2A) cannot be satisfied.
CONCLUSION
59. IGT failed to pay the acceptance fee payable on its PCT application within the time prescribed in the Patent Regulations. This caused its patent application to lapse. IGT therefore made an application to the Commissioner of Patents for an extension of time under s223 of the Patents Act within which it could make that payment. The Commissioner granted an extension of time despite Aristocrat’s objection.
60. I have found that the reason why the acceptance fee was not paid within the prescribed time was because Ms Turner, an employee of Blake Dawson which acted as agents for IGT, had formed the erroneous view that the fee was not payable. Ms Turner correctly identified that the filing date of the application resulted in no fee being payable, but she did not consider the national phase entry date. Had she done so, she would most likely have asked IGT to make payment of the acceptance fee. That is because the evidence disclosed a clear intention by IGT to maintain the application.
61. Having found that IGT’s failure to pay resulted from an error made by its Australian agent, the discretionary provisions in s 223(2)(a) are enlivened. Taking into account the remedial nature of s 223 of the Patents Act, and balancing against that the prejudice which would be suffered by Aristocrat if an extension of time were granted, I have come to the conclusion that the extension of time should be granted to IGT. The decision made by a delegate of the Commissioner on 28 October 2008 was correct and I affirm that decision.
I certify that the sixty-one [61] preceding paragraphs are a true copy of the reasons for the decision herein of
Mr Egon Fice, MemberSigned: Dianne Eva
ClerkDate of Hearing 31 August 2009
Date of Decision 12 November 2009Solicitor for the Applicant Mr N Mountford, Griffith Hack Patent &
Trade Mark Attorneys
Solicitor for the Respondent Ms N Nicoloau, Commissioner of Patents, Australian Government Solicitor
Solicitor for the Party Joined Mr C Dimitriadis, Phillips Ormonde & Fitzpatrick
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