Australian Solar Mesh Sales Pty Ltd v Anderson
[1999] FCA 641
•14 MAY 1999
FEDERAL COURT OF AUSTRALIA
Australian Solar Mesh Sales Pty Ltd v Anderson [1999] FCA 641
NEGLIGENCE – whether patent attorneys retained by applicant – whether breach of retainer – whether breach of duty of care with regard to patent application - no question of principle
AUSTRALIAN SOLAR MESH SALES PTY LIMITED v NEVILLE JOHN ANDERSON & ORS
NG 768 of 1993BRANSON J
SYDNEY
14 MAY 1999
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NG 768 of 1993
BETWEEN:
AUSTRALIAN SOLAR MESH SALES PTY LIMITED
(ACN: 006-311-628)
ApplicantAND:
NEVILLE JOHN ANDERSON & ORS
RespondentsJUDGE:
BRANSON J
DATE OF ORDER:
14 MAY 1999
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
The application be dismissed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NG 768 of 1993
BETWEEN:
AUSTRALIAN SOLAR MESH SALES PTY LIMITED
(ACN: 006-311-628)
ApplicantAND:
NEVILLE JOHN ANDERSON & ORS
Respondents
JUDGE:
BRANSON J
DATE:
14 MAY 1999
PLACE:
SYDNEY
REASONS FOR JUDGMENT
INTRODUCTION
The applicant claims damages for professional negligence and breach of retainer from the respondents, who are trustees of the Spruson and Ferguson Unit Trust, and at all relevant times carried on business as patent attorneys under the name “Spruson & Ferguson”. The directors of the applicant are Kenneth Clyde Ivory (“Mr Ivory”), and his son Jarrod Kenneth Ivory. Former directors of the applicant include Kaye Francis Ivory (“Mrs Ivory”), who was a director of the applicant between 12 September 1987 and 28 October 1997, and Keith Albert George Smith (“Mr Smith”), who was a director of the applicant between 9 November 1984 and 12 September 1987. Mr Smith is Mr Ivory’s uncle.
The applicant claims that in August 1985 it retained the respondents to act as its patent attorneys in respect of rights claimed in a fine fibreglass mesh. The mesh is said to have been designed to provide protection against small insects, and reduce direct sunlight and penetration by ultraviolet and infra-red rays.
The following facts are not in dispute. On 6 August 1985, the respondents forwarded to the Commissioner of Patents an application in the name of Mr Smith for a standard patent in respect of a screen mesh material accompanied by a provisional specification. The application was assigned the number PH1812. On 5 August 1986 the respondents forwarded to the Commissioner of Patents a complete specification in respect of the application No. PH1812. A petty patent application in the name of Keith Albert George Smith was lodged as a division of the pending application on 3 July 1987. On 4 September 1987, the petty patent application was amended in response to an examiner’s report and on 20 October 1987 a petty patent issued in the name of Mr Smith for “a screen mesh material”. In 1990 the applicant commenced a proceeding in this Court (“the Tomlin proceeding”) against Tomlin Industries Pty Limited (“Tomlin”) alleging infringement of the petty patent. Tomlin cross-claimed in the proceeding for the revocation of the petty patent. The claim for revocation succeeded, Wilcox J finding that the specification of the petty patent was ambiguous in its reference to colour and in its reference to yarn “of approximately 0.25 millimetres diameter”.
The applicant claims that the revocation of the petty patent was caused by the negligence of the respondents in that they failed to advise the applicant that the mesh was incapable of patent or alternatively negligently failed “to draft the specification in such a manner that was not ambiguous and liable to revocation”. In addition the applicant asserts that the respondents negligently failed to identify “the existence of a combination claim” in respect of the mesh, failed to exclude a reference to colour in the provisional specification, the complete specification and the petty patent application and failed to identify Mr Ivory as a co-inventor of the mesh in the provisional specification, the complete specification and the petty patent application. Finally, in respect of the petty patent application, the applicant claims that the respondents failed to act on the applicant’s instructions when the applicant forwarded to the respondents a sample of an infringing product “in order that the petty patent application could be worded in such a manner so as to entrap the infringer”.
CREDIBILITY
The witnesses called by the applicant on issues relating to liability were Mr Ivory, the managing director of the applicant, and Trevor James Dredge (“Mr Dredge”), a patent attorney.
I formed an adverse view of Mr Ivory’s credibility. I accept his unchallenged evidence that he suffers from sleep apnea and that this may affect his memory. I also take into account that he has received less formal education than many of the other witnesses who gave evidence in this case. He thus may be expected by comparison to appear less sophisticated and articulate in the witness box than they did. However, I found Mr Ivory to be an evasive and somewhat aggressive witness, particularly when it appeared that a direct answer may not have been helpful to the applicant’s case. He gave evidence inconsistent with earlier sworn evidence given by him. He was unable to give a detailed, consistent or indeed coherent description of products of which he claimed to be the joint inventor. Other matters relevant to Mr Ivory’s credit are mentioned below. I formed the view that it would be unsafe for me to act on the unsupported evidence of Mr Ivory except to the extent that such evidence may amount to admissions adverse to the interest of the applicant.
There were a number of curious aspects of Mr Dredge’s evidence which ultimately have had the result that I feel unable to place weight on his expressions of expert opinion where they are in conflict with other expert evidence. First, it became plain during Mr Dredge’s cross-examination that he had not reviewed his file or his work papers for the purpose of giving evidence to the Court. His recollection of their contents was incomplete, his evidence on occasions contradictory, and his evidence of the steps taken by him to prepare his expert report unclear.
More crucially, however, Mr Dredge gave evidence under cross-examination of having prepared a draft report in which he expressed the opinions that the respondents “did a very good job based on material that was before them and based on their efforts to satisfy the client’s instructions” and that the petty patent specification “was properly drafted based on the instructions given … by the client”. Mr Dredge also expressed the opinion in his draft report that he had serious doubts about whether the mesh concerning which the respondents were instructed was patentable but he was of the view that:
“a patent attorney is obligated to prosecute a patent application at the behest of his client even if the patent attorney is of the view that a patent if granted would be invalid and the patent attorney would be negligent if he failed to do so.”
Mr Dredge’s evidence under cross-examination was that at the time that he prepared his draft report he held the opinions expressed in it. The draft report was received in evidence. However, in his re-examination, given by video-link from Brisbane after a weekend break, Mr Dredge said “that there were particular issues that were personal to [him] that gave rise to” his draft report. He went on to say:
“In 1989 I was separated from my family and was going through some personal turmoil in my life and I was on a ferry travelling across the Brisbane River at the time and I looked up into the sky and said, “God help me”, and I had an experience at that time which involved what I understood to be an experience with the Holy Spirit. I later understood that – I didn’t know what it was at the time.
By 1992 I’d been back with my family but the relationship with my wife had not improved a little where she was sufficiently happy and neither was I at 10.15 one night in my office I had reached probably the lowest pit in my life at that time and I had a further experience which I could only describe as a classical converting experience. My office seemed to be filled with a presence that I understood to be the Holy Spirit and I had an image of Jesus at Calvary dying in my place for my sins. I thanked him for doing that and asked him to help me in the rest of my life. He made some promises to me that night. He made a promise that he would restore my marriage. He made a promise that he would make me a loving husband and father and he has fulfilled those promises in my life and I thank him for that and I thank him also for saving me”.
I interpolate that Mr Dredge received instructions in relation to this matter in early February 1996.
Mr Dredge went on to give evidence of receiving instructions to provide an expert opinion to the applicant and of being given certain files. He gave evidence as follows:
“… as I read the file notes and looked at the progress and the carriage of the case in the files I could say I had alarm bells going off in my head, I could [see] all these other things that I thought were problems rather than any problems dealing with the claim, which is the proposition they put to me. … Now, let me say this that the whole exercise, I wasn’t exactly sure what urgency was involved with the court but the whole exercise took me about two weeks. The early part of that was just agonising over what I was likely to get myself into and based on my own I’d say human frailty I considered the option of providing a report that gave Spruson & Ferguson a clean bill of health and would enable me not to be sitting here in the Federal Court giving this type of evidence. So I initially proceeded along the lines which I say was involving a personal conflict within me because I saw things in the file that the instructing solicitors weren’t even contemplating in terms of the foundations upon which the petty patent is built rather than the specifics of the claim which Wilcox J dealt with. I contemplated keeping that to myself and writing a report that would see the matter go to no further. So that’s the origin of that particular report which I’ve never issued and I wasn’t actually aware it was on the file and I had the file copied by my staff and sent down. I haven’t looked at the file since ’96 I suppose and it should have went in the bin at the time.”
Mr Dredge did not in his re-examination offer any explanation for the evidence given by him in cross examination concerning his draft report, much of which is not easily reconciled with his evidence under re-examination of “just agonising over what I was likely to get myself into” in the early part of the two week exercise. In particular, he gave no explanation for having given evidence under cross-examination that at the time that he prepared the draft report he held the opinions expressed in it. He did not expressly seek to withdraw any part of his earlier evidence.
A consideration of Mr Dredge’s evidence as a whole leaves me unclear as to the relevant expert opinions actually held by him, and in some doubt generally as to his credibility. In some regards, however, I have found Mr Dredge’s evidence illuminating, particularly as to the background to the present litigation. I return to this topic below.
The principal professional witnesses called by the respondents on issues relating to liability were Peter Chamberlayne Dummer (“Mr Dummer”), patent attorney, who at the time with which this proceeding is concerned worked as a technical assistant at Spruson & Ferguson, William Stace Lloyd “(Mr Lloyd”), patent attorney, who was called by the respondents as an independent expert and the respondents Fraser Patison Old (“Mr Old”) and John Gordon Hinde (“Mr Hinde”).
It was Mr Dummer who, working under the supervision of first Mr Hinde, and then Mr Old, had the principal conduct on behalf of the respondents of the patent applications concerning the fibreglass mesh. I formed a favourable view of Mr Dummer’s credibility. He appeared to me to be frank and careful in answering questions put to him and he was prepared to make concessions which may have been adverse to the respondents’ interests – and to his own to the extent that his reputation was at risk. Mr Dummer was assisted in giving evidence by his detailed contemporaneous file notes.
I also found that Mr Hinde and Mr Old, who frankly admitted to having very limited recollection of relevant matters, gave their evidence in a clear and straightforward fashion. I entertain no reservations about their credibility, nor about the credibility of Mr Lloyd.
So far as the credibility of other witnesses proved of importance, I deal with it below.
CRUCIAL ISSUES
Did the applicant retain the respondents?
The applicant’s case is founded upon the allegation contained in paragraph 4 of its “Further, Further, Further Amended Statement of Claim” (“the Statement of Claim”) that:
“On [sic] or about August, 1985, the Applicant retained the Respondents to act as its patent attorneys in respect of rights claimed on [sic] a fine fibreglass meshing designed to provide protection against small insects, reduce direct sunlight and penetration of ultraviolet and infra-red rays”.
No other basis upon which the respondents might have owed the applicant a duty of care is identified by the Statement of Claim.
The respondents deny that they were retained by the applicant.
The respondents’ initial instructions to seek patent protection for a fibreglass mesh came in a letter dated 10 May 1985 from J.G. Poynten & Co, Solicitors and Attorneys. The body of the letter reads as follows:
“We note that you have been instructed to prosecute various trademarks relating to Australian Solar Mesh.
We are now instructed to apply for a patent in respect of Australian Solar Mesh. We enclose draft Application and Declaration together with a memo from our client providing details of the invention and a brochure on the product.
Please prepare a provisional specification and submit the necessary documents for signature. We observe that you will probably require further details and we request that you contact Mr Smith direct for any technical details, his telephone number is ….
Should we be able to assist in any way please do not hesitate to contact us.”
There is some dispute between the parties as to the identity of the “draft Application and Declaration” enclosed with the letter of 10 May 1985. Having regard to the evidence of Mr Dummer and the content of the files of the respondents, I am satisfied that the draft Application enclosed with the above letter was a standard form application that had been completed to show Mr Smith as the applicant for the grant of a standard patent for an invention entitled “A Screen Mesh Material”. I am also satisfied that the draft Declaration in support of an application for patent enclosed with the letter was a standard form document that had been completed to provide for Mr Smith to declare that he was the applicant for the patent and the actual inventor of the invention.
The memorandum referred to in the letter of 10 May 1985 is an unsigned document dated 16 April 1985 on paper bearing the Solar-Mesh logo. It reads:
“The aim to develope [sic] a material capable of giving protection from Ultraviolet and Infra red rays whilst still allowing reasonable light penetration, visual aspect and weatherability was achieved by using coated glass fibre yarn of 100 Tex woven to a dimensiion [sic] of 32 weft by 18 warp and heat treated to stabilise th [sic] mesh. Subsequent calculations from testing on a spectrphotometer [sic] and calculations of shading co-efficient as preferred by A.S.H.R.A.E. guidelines were established, as also were wind tunnel testing and insect penetration. All tests confirmed the unique [sic] to give the optimum average performance required.”
Mr Ivory placed in evidence a copy of the above memorandum signed by him. The copy of the memorandum in the files of the respondents is unsigned. I am satisfied that Mr Ivory has placed his signature on a copy of the memorandum on a date later than the date of the memorandum and, in all probability, for the purpose of placing the copy memorandum in evidence in this proceeding.
The brochure which was enclosed with the letter of 10 May 1985 reproduces at least seven photographs depicting mesh installed in domestic and commercial premises. It gives a Geelong Victoria address for “Australian Solar Mesh” and a Coffs Harbour New South Wales address for “Franchising Head Office”. It also includes in prominent print on the back page the following:
“KEN IVORY INDUSTRIES Pty Ltd
14 LAWSON CRESCENT
COFFS HARBOUR N.S.W. 2450
For no obligation free quotes
Tel. (066)524591
Precision on Site Manufacturing”There was no reason, in my view, for the respondents to place any significance on this reference to Ken Ivory Industries Pty Ltd so far as the identity of their client was concerned. The contention that the reference to Ken Ivory Industries Pty Ltd on the back of the brochure should have alerted the respondents to the existence of Mr Ivory and thus to the possibility that they were being instructed by Messrs Smith and Ivory jointly on behalf of the applicant is, in my view, far-fetched.
I do not accept the contention of the applicant that the terms of the letter of 10 May 1985 suggest that the client is “Australian Solar Mesh”. Rather, in my view, the terms of the letter suggest that “Australian Solar Mesh” is the product in respect of which patent protection was sought. It is not suggested that a search of the respondents’ trademark files would have revealed that the applicant was the owner of the Solar Mesh trademark. It is accepted that a search of those files would have revealed that Ken Ivory Industries Pty Ltd was the owner of the trademark. However, none of Messrs Dummer, Hinde or Old did search the respondents’ trademark files concerning the trademark “Solar-Mesh”. In the circumstances, it was, in my view, not unreasonable for them to consider that this was not a necessary step. Had any of Messrs Dummer, Hinde and Old discovered that Ken Ivory Industries Pty Ltd owned the Solar Mesh trademark it is likely that they would have raised the issue with Mr Smith. I am satisfied, for reasons which are set out below, that if they had done so Mr Smith would have advised them that he (ie Mr Smith) was the inventor of the relevant mesh and the applicant for patent protection.
Having regard to the terms of the letter of 10 May 1985, and the material enclosed with the letter, it was, in my view, reasonable for the respondents to assume, as Mr Dummer and Mr Hinde did, that the respondents’ client was Mr Smith.
The respondents’ files show that they corresponded with Mr Smith and sent debit notes to him. Mr Smith approved the provisional specification prepared for lodgment with the Patent Office and he gave telephone instructions for the patent application to be lodged in his name. Mr Smith gave instructions concerning the complete specification and the request for an examination of the application was made on his instructions and in his name. Mr Smith gave instructions for the petty patent application to be made.
I find that no instructions were received by the respondents at any relevant time, which ought reasonably to have caused them to conclude that the applicant, or any person other than Mr Smith, was their client. Indeed, I am satisfied that at no relevant time did either the applicant, or any person purporting to act on the applicant’s behalf, seek to retain, or even provide relevant instructions to the respondents. I accept Mr Dummer’s evidence that the first time that he became aware of the existence of the applicant was on or about 26 October 1987 when the respondents received a letter which made reference to “Australian Solar Mesh Sales Pty Ltd”. I also accept Mr Dummer’s evidence that he first spoke to Mr Ivory on 3 December 1987 and that he had not earlier heard of Mr Ivory.
Mr Ivory has annexed to an affidavit a copy letter dated 28 February 1985, on plain paper rather than letterhead, apparently from J.G. Poynten & Co. The letter reads as follows:
“Dear Ken,
RE: PATENT
We enclose herewith two forms in relation to Patents and ask that you provide us with your further instructions in relation to this matter.
Yours faithfully,
J.G. POYNTEN & CO
Per:”It is not clear why Mr Ivory as the alleged recipient of the above letter should be in possession of the copy rather than the original of the letter. Assuming the copy to be genuine, I am not satisfied that it relates to the patent protection request subsequently made by letter dated 10 May 1985 from J.G. Poynten & Co to the respondents. As is mentioned above, the letter dated 10 May 1985 makes no reference to Mr Ivory, and enclosed draft documentation had been prepared solely in the name of Mr Smith.
I reject the evidence of Mr Ivory that an undated document, apparently signed by Mr Smith, in the terms set out below, was signed by Mr Smith at Mr Ivory’s request promptly after Mr Ivory learned that the declaration in support of the patent application concerning the fibreglass mesh had been signed by Mr Smith. The undated document is, I find on the balance of probabilities, of more recent origin.
The undated document reads as follows:
“Mr K. Ivory
Australian Solar Mesh Sales PTY. LTD.
BrisbaneRe. Patent
In consideration of payment of $1.00, receipt of which I acknowledge, I agree to transfer all rights and title of all patents held by me pertaining to the product of Australian Solar Mesh to the company Australian Solar Mesh Sales Pty. Ltd.. I note that the assignment of the patent will have to be formalised by deed and I agree to execute a deed giving effect to this agreement.
Keith A.G. Smith
Director
Australian Solar Mesh”The respondents placed in evidence a Deed of Assignment between Mr Smith and the applicant, which purports to have been made on 6 August 1985. By that deed Mr Smith warrants that he has a good and valid title to Australian Patent Application No. PH1812 in respect of an invention entitled Screen Mesh and to the invention and assigns to the applicant all of his rights, title and interest in the invention and the application.
This deed, I find was in fact executed by Mr Smith and the applicant sometime after 6 August 1985 and probably between 2 and 25 May 1988. The deed was apparently prepared by Mr Dummer for the purpose of supporting an application to the United Kingdom Patent Office which was made during May 1988. The files of the respondents show that it was only on 6 August 1985 that the application for a standard patent in respect of the mesh material, accompanied by a provisional specification, was forwarded by the respondents to the Commissioner of Patents. This application was subsequently allocated the application number PH1812. This number could not have been known to Mr Smith on 6 August 1985. Moreover, the conduct of Mr Smith after 6 August 1985, as revealed by the respondents’ files, is inconsistent with his having on 6 August 1985 assigned all of his rights, title and interest in the alleged invention and the patent application to another entity, even one of which he was a director.
Assuming, contrary to my finding, that the deed was executed on 6 August 1985, there is no basis upon which I could conclude that its existence came to the attention of the respondents at any relevant time. The files of the respondents show that it was Mr Smith who continued to give instructions to the respondents. The files contain no record of Mr Smith’s having mentioned during 1985, 1986 or 1987 any assignment. The files also show that patent protection continued, with Mr Smith’s knowledge, to be sought in the name of Mr Smith.
I reject the evidence of Mr Ivory that he forwarded samples of mesh to Mr Dummer before the petty patent issued. I further reject his evidence that Mr Dummer telephoned him seeking an explanation of the difference between the original Solar-Mesh and the New Solar-Mesh. I reject Mr Ivory’s evidence that a telephone conference took place between David Leach, a locum solicitor working at J.G. Poynten & Co, Mr Ivory and Mr Dummer at which advice was sought from Mr Dummer concerning an issue of possible infringement by Tomlin. It was not suggested to Mr Dummer in cross-examination that he was party to such a telephone conference and the files of the respondents disclose that Mr Dummer’s instructions concerning a possible infringement by Tomlin came from Mr Smith. I find that Mr Smith, and not Mr Ivory or any person on behalf of the application, gave instructions to the respondents concerning the making of a petty patent application.
The above findings are supported by reference to the original pleadings in this matter. The action was commenced in the Common Law Division of the Supreme Court of New South Wales Northern Rivers Registry. At that time Mr Smith was the first plaintiff and the applicant the second plaintiff. Paragraphs 3, 4, 11 and 12 of the Statement of Claim filed on 5 August 1991 read as follows:
“3.In the year 1985 the first Plaintiff retained the Defendants to act as their [sic] Patent Attorneys in respect of rights claimed on [sic] a fine fibreglass mesh invention designed to provide protection against small insects such as midges and sandflies and to reduce direct sunlight and the penetration of ultra violet and infra-red rays.
4.The said first plaintiff retained the Defendants to act as Patent Attorneys to advise on whether the said invention was capable of being the subject of a patent.
…
11.On 6 August 1985 the first plaintiff assigned all his rights and interest to the invention and the claims for patent to the second Plaintiff giving notice thereof to the Australian Patent Office on 6 August 1985.
12.In the circumstances the Defendants entered into a new retainer with the second Plaintiff and owed the same duties to the second Plaintiff as hereinbefore pleaded in paragraphs 5 to 8 inclusive and continued to perform their duties for the benefit of the second Plaintiff.”
No evidence has been placed before me to support the original pleading that notice was given to the Australian Patent Office on 6 August 1985 that Mr Smith had assigned his rights and interest in the mesh invention to the present applicant. I have found that Mr Smith did not make any such assignment on 6 August 1985.
By a notice filed in the Supreme Court of New South Wales on 7 June 1993, Mr Smith discontinued his action against the now respondents. It is in an amended statement of claim filed in this Court on 14 February 1994 that paragraph 4 of the Statement of Claim appears for the first time.
The Statement of Claim pleads only a single retainer. It may be that technically there was more than one retainer. I am satisfied that it was Mr Smith who, through his agent J.G. Poynten & Co, initially retained the respondents in an endeavour to obtain patent protection for a PVC coated fibreglass mesh. I find that at all times relevant to this proceeding Mr Smith continued to be the respondents’ client. I am satisfied that the applicant did not at any relevant time retain the respondents.
Who invented the mesh?
The finding that it was Mr Smith, and not Mr Ivory or any other person on behalf of the applicant, who retained the respondents is reinforced, in my view, by the body of evidence which supports the conclusion that it was Mr Smith, and not Messrs Smith and Ivory jointly, who invented the mesh for which patent protection was sought.
By an affidavit sworn by him on 25 March 1992 in the Tomlin proceeding, Mr Ivory deposed on oath to the truth of the following:
“1.During the period 1984 to September 1987, KEITH ALBERT GEORGE SMITH, (the original inventor of the reflective screen mesh, herein referred to as the product known by it’s [sic] Registered Trade Marks [sic] as SOLAR-MESH®, herein after referred to as the product), was authorised by the applicant company to conduct dealings on it’s [sic] behalf with the first respondents [sic].”
In the same proceeding (ie the Tomlin proceeding) an accountant, Mr P.C. Smith, was retained to give evidence on behalf of the applicant. Mr P.C. Smith prepared a written report concerning loss suffered by the applicant. Appendix C to this report is headed:
“AUSTRALIAN SOLAR MESH SALES PTY LIMITED
HISTORY ACCORDING TO IVORY”.
The opening paragraph of the appendix reads:
“Ken Ivory’s uncle Keith Smith invented the product in 1983. Ivory’s wife, Kaye, named the product Solar-Mesh at a family barbeque in 1983”.
I find that the information contained in this paragraph was conveyed to Mr P.C. Smith by Mr Ivory.
By letter dated 5 December 1994, the then solicitors for the applicant, Hovan & Co, provided certain particulars to the solicitors for the respondents. In doing so they asserted as follows:
“The initial patent which was applied for being No. 590596 was in the name of Keith Albert George Smith, being the original inventor …”.
Mr Ivory gave evidence that it was necessary for him to assert in the Tomlin proceeding, and also initially in this proceeding, that Mr Smith had invented Solar-Mesh because the respondents had wrongfully obtained patent protection for the product in the name of Mr Smith. This evidence tends to confirm my view that any evidence given by Mr Ivory is to be treated with caution. However, having regard to all of the evidence before me, including Mr Smith’s role in providing instructions to the respondents, I am satisfied that Mr Smith was the sole inventor of the fibreglass mesh for which the respondents were retained to obtain patent protection. I draw the inference that Mr Smith was the sole inventor of the fibreglass mesh more readily than I otherwise might by reason of the failure of the applicant to call Mr Smith to give evidence.
I note, incidentally, that Mr Ivory gave evidence that Mr Smith withdrew from this proceeding because he was threatened by Mr Old. The alleged threat related to the issue of the costs of the proceeding. I reject this evidence of Mr Ivory and accept the truth of Mr Old’s denial. However, even had I accepted Mr Ivory’s evidence concerning the alleged threat, it would have provided no explanation for the applicant’s failure to call Mr Smith as a witness.
One or two meshes?
The pleadings in this matter did not contain any reference to Solar Mesh Mark I and Solar Mesh Mark II until they were amended during the course of the hearing.
The case of the applicant as presented at the hearing is that mesh, which it calls Solar-Mesh, has existed in two relevant forms: Solar-Mesh Mark I and Solar Mesh Mark II. Solar-Mesh Mark I, the applicant contends, was the product illustrated in the brochure sent to the respondents under cover of the letter from J.G. Poynten & Co dated 10 May 1985. This mesh, which the applicant contends was jointly invented by Messrs Smith and Ivory, had been commercially sold before 10 May 1985. It was a black mesh.
However, the applicant contends that Messrs Smith and Ivory were also the co-inventors of another mesh, Solar-Mesh Mark II, which was the subject of the patent application lodged on 6 August 1985. This mesh, the applicant contends, had not been disclosed before that date.
These contentions call for careful examination of the instructions and other materials provided to the respondents. The respondents’ initial letter of instruction dated 10 May 1985 is reproduced above.
The letter of 10 May 1985 was referred, in accordance with ordinary procedures within the respondents’ office, to Mr Hinde as a principal of the respondents’ mechanical engineering “department”. Mr Hinde passed the letter on to Mr Dummer and instructed him to attend to the matter. Mr Hinde’s evidence was that it appeared to him from the letter and its enclosures that the respondents were being asked to lodge a patent application in respect of a product that was already on the market. He agreed with the suggestion put to him in cross examination that he was trying to test Mr Dummer. He said that he believed that was the best way to educate.
On 22 May 1985 Mr Dummer had a telephone conversation with Mr Smith. He asked Mr Smith whether the mesh referred to in the letter of 10 May 1985 had been sold as depicted in the brochure and advertising material distributed. Mr Smith answered “yes” to both questions. Mr Dummer then said words to the effect:
“In view of this prior publication it will not be possible for us to prepare a patent specification. Valid patent protection cannot be obtained in respect of a mesh as sold and as shown in the brochure.
Whilst valid patent protection may not be available for what has already been published and used, that does not preclude patent protection being obtained for improvements of the concept which have not yet been published.”
Mr Smith raised the possibility of obtaining patent protection in relation to white mesh and said, in effect, “my tests indicate that white is a better colour but it is hard to make.”
Mr Dummer prepared a letter to J.G. Poynten & Co dated 27 May 1985 which referred to his telephone conversation with Mr Smith, repeated the advice which he had given to Mr Smith and enclosed a standard publication of the respondents explaining the fundamentals of patents, trade marks and designs. Mr Hinde approved and signed the letter. The letter referred to “the mesh sample as provided.” The letter of 10 May 1985 does not refer to a sample of mesh. Nor is there anything on the respondents’ file which indicates that a sample of mesh was forwarded to them by J.G. Poynten & Co, Mr Smith or anyone else, between 10 May 1995 and 27 May 1985. Neither Mr Hinde nor Mr Dummer needed to see a sample of mesh to give the advice outlined in the letter of 27 May 1985 and nothing on the file suggests that they asked to be provided with a sample at this time. Although Mr Dummer gave evidence that the reference in the letter of 27 May 1985 to a mesh sample causes him now to believe that he “very probably had a sample by the time of that letter”, I think it more likely than not that no such sample was provided to the respondents. The whole of the evidence suggests, in my view, that Mr Dummer used the expression “the mesh sample as provided” carelessly, intending to refer to the mesh illustrated in the brochure.
The conclusion that no sample of mesh had been provided to the respondents at 27 May 1985 is strengthened by the terms of the next relevant letter from J.G. Poynten & Co to the respondents. That letter, which is dated 21 June 1985, is in the following terms:
“We refer to your discussions with Mr Smith in relation to Solarmesh and now enclose herewith a sample of solarmesh that has been sold and a sample of the solarmesh coloured white.
Our instructions are to proceed to patent the white coloured solarmesh and would be pleased if you would prepare the necessary documents and take the necessary steps to do this. If you require any further information or assistance in any way please do not hesitate to contact us or Mr Smith in Victoria.”
I accept the evidence of Mr Dummer that enclosed with the letter of 21 June 1985 were two samples of mesh: one apparently manufactured black and the other an apparently identical mesh painted white.
In my view it was reasonable for Mr Dummer to conclude, as he did, that the black mesh enclosed with the letter of 21 June 1985 was a sample of the mesh which was illustrated in the brochure and which had been commercially sold and that the white mesh endorsed with the same letter was a sample of identical mesh painted white. It is appropriate, however, for a finding to be made as to whether Mr Dummer’s conclusion was not only reasonable but also accurate.
The case of the applicant is that Solar Mesh Mark I was a black, woven, louvred mesh and Solar Mesh Mark II is a straight woven mesh without louvres which is not necessarily black. As I understand it, the applicant contends that enclosed with the letter of 21 June 1985 were a sample of Solar Mesh Mark I (the black sample) and a sample of Solar Mesh Mark II coloured white.
Mr Ivory gave evidence that a franchise operation for Solar Mesh Mark I was active in Coffs Harbour under his control from the end of 1983 until at least April 1986. He described Solar Mesh Mark I as a heat stabilised woven mesh of virtually round yarn which achieved a louvred effect by a looseness in the weave in one direction. Later Mr Ivory said that it was “woven with a more knitted type of weave … which gave a louvre type effect in the horizontal plane”. He further said that the louvre was created in the weaving process by a machine, which no longer exists in the same form, which “was capable of doing that type of weave then by the way it’s looped and pulled and it created it”.
Mr Ivory also said as to the difference between Solar Mesh Mark I and Solar Mesh Mark II that -
“Some younger people could see it easily, some older people could see it easily, it would depend on the individual. Some would need to use a magnifying glass to identify it”
Later, the case of the applicant was said by its counsel, presumably on the instructions of Mr Ivory, to be that the louvres on Solar Mesh Mark I were so minute that they could escape detection by the naked eye. Other cross-examination of the respondents’ witnesses seemed to imply that a “superficial view” of samples of Solar Mesh Mark I and Solar Mesh Mark II might not reveal the differences between them.
Despite Mr Ivory’s evidence that significant amounts of Solar Mesh Mark I were installed in Queensland buildings, no samples of Solar Mesh Mark I have been placed in evidence, nor have any specifications for the manufacture of Solar Mesh Mark I or, indeed, of any woven mesh designed to achieve a louvred effect. No brochures or other marketing materials of the applicant showing, or referring to a louvred mesh have been placed in evidence. Training and promotional videos made for the applicant earlier than 1986 do not refer to the mesh being louvred, although on Mr Ivory’s evidence, the existence of the louvres affected the installation process. No evidence was led to establish that a woven mesh fitting the description given by Mr Ivory of Solar Mesh Mark I can be manufactured.
The evidence from witnesses other than Mr Ivory which touched on the question of Solar Mesh Mark I and Solar Mesh Mark II included the following.
Leslie Alan Lindley (“Mr Lindley”), formerly the General Manager of Cyclone Hardware Pty Limited (“Cyclone”), a former division of Boral Limited (“Boral”), gave evidence of the production by Boral of mesh in 1984 for a Mr Keith Smith on a standard loom. His evidence was that no fibre glass yarn was woven into louvred mesh by Boral in 1984. Indeed Mr Lindley gave evidence that Boral had no facilities to do anything else but straight weave, and that he had never seen a woven fibre glass mesh configured in the way suggested by a drawing made by Mr Ivory of Solar Mesh Mark I.
Daniel John Collard (“Mr Collard”), Marketing Manager – Industrial Products for Sarlon Industries Pty Limited (“Sarlon”), gave evidence that Sarlon has been manufacturing mesh from PVC coated fibreglass since about 1967. He further gave evidence that since 1992, Sarlon and Cyclone have been the only Australian manufacturers of PVC coated fibreglass woven mesh. Earlier than 1992, Tomlin also manufactured PVC coated fibre glass woven mesh but in January 1992 Sarlon purchased the business and fibreglass weaving machinery of Tomlin. Mr Collard’s evidence was that the mesh manufactured by Sarlon since about 1967 has been straight weave mesh.
I accept the evidence of Messrs Lindley and Collard without hesitation.
Warwick Faulkner (“Mr Faulkner”), a former franchisee, whose evidence I accept, gave evidence that he and his wife entered into a franchise agreement with ‘Australian Solar Mesh” in May 1984. He produced a number of samples of mesh, which I accept were supplied to him and his wife in 1984 pursuant to the franchise agreement. They are all straight weave meshes. Mr Faulkner’s evidence was that he has never seen a louvred mesh.
John Harris (“Mr Harris”), an operator of a real estate business in Airlie Beach, Queensland gave evidence of being given a kit promoting the sale of Solar Mesh franchises by Mr Ivory in 1984. His recollection was that there was mesh in the kit that looked like ordinary fly screen, but which had smaller holes and little horizontal louvres which made it look like a venetian blind when held up. Mr Harris saw some mesh in 1992 or 1993 that had apparently been installed by Mr Ivory. He observed that the mesh looked different from that provided to him in the kit in 1984. I have reservations concerning the accuracy of Mr Harris’ memory of what he saw a good number of years ago. However, I did not form the view that Mr Harris was seeking to mislead the Court.
An press article dated 25 October 1986 published under the heading “Industrial Impact” contains a reference to a Solar Mesh in the following terms:
“At a quick glance the mesh looks much like other flyscreens. A closer look reveals that the mesh is much tighter. It actually consists of woven fibreglass, with a PVC coating and under a microscope you can see that the mesh is clearly louvred”.
The article was received in evidence not as proof of the truth of its contents, but to meet the suggestion that the notion of a louvred mesh was a recent invention. It may be observed, however, that the reference in the article to a “tighter” mesh than flyscreen sits uncomfortably with Mr Ivory’s evidence that Solar Mesh Mark I achieved a louvred effect by looseness in the weave.
It is not necessary for me to make a finding concerning the exact nature or provenance of the mesh in the kit given to Mr Harris. I am satisfied that the mesh described by Mr Harris is not the mesh described by Mr Ivory as Solar Mesh Mark I. It may be that the mesh in the kit given to Mr Harris was a non-woven louvred mesh. An example of such a mesh, which does look rather like a miniature venetian blind, was placed in evidence by the applicant. The mesh described by Mr Ivory, and as drawn by him, would not have looked like a venetian blind when held up. Mr Harris’ drawings of the mesh in the kit, as he recalled it, did not look at all like Mr Ivory’s drawing of Solar Mesh Mark I. I find that, whatever the mesh was that Mr Harris received in the kit in 1984, it was not Solar Mesh Mark I as described by Mr Ivory.
A number of persons who should, on Mr Ivory’s evidence, have been able to confirm the existence of Solar Mesh Mark I were not called to give evidence. Such persons include Mr Smith, the alleged co-inventor with Mr Ivory of the product, Mrs Ivory (a former director of the applicant and Mr Ivory’s wife), any member of the firm J.G. Poynten & Co and any of the franchisees who were allegedly supplied with Solar Mesh Mark I.
I find that there was no product utilised by the applicant between 1984-1986, or at any time, which corresponds with Mr Ivory’s description of Solar Mesh Mark I. I further find that the two samples of mesh provided to the respondents under cover of the letter of 21 June 1985 were samples of the mesh illustrated in the brochure sent to the respondents under cover of the letter of 10 May 1985. That is, they were samples of a mesh which had been commercially sold well before 10 May 1985. One of the samples had been painted white.
Not only does the above finding as to the nature of the mesh provided to the respondents fit comfortably with the contemporaneous records as found in the files of the respondents, it also seems consistent with the initial instructions apparently given to Mr Dredge. Mr Dredge’s evidence was not entirely clear as to the information available to him when he prepared his draft report. Initially he said that he looked at a statement from Mr Ivory but subsequently he said that he did not use that statement for the purpose preparing his draft report, and he later said he did not have any recollection of that statement. At one stage he said that he spent a significant time talking to Mr Ivory and taking an “invention history” from him before he prepared his draft report. Subsequently he agreed that he could not be certain of the day on which he took the “invention history” from Mr Ivory. As I understand his final position, it was that he had a number of meetings with the solicitor who instructed him before he prepared his draft report and that Mr Ivory took part in all of those meetings.
Mr Dredge’s draft statement contains the following assertion:
“The only information I have concerning the history of the invention is contained in a draft statement by Ken Ivory “the background facts” set out in the decision of Wilcox J, and the file notes from the S & F [Spruson & Ferguson] file that I have been provided with.”
I consider, in the light of the whole of Mr Dredge’s evidence, that it is probable that the above assertion accurately records the information available to Mr Dredge as to the history of the alleged invention at the time that he wrote his draft report, although I accept that he had met and spoken with Mr Ivory on a number of occasions by the date of the draft report.
Mr Dredge’s draft report makes no mention of a louvred mesh. Indeed, his evidence was that at the time that he prepared his draft report, it had never been suggested to him that there had been a product in the market in the nature of a mesh with a louvred appearance that was manufactured on behalf of Mr Smith, Mr Ivory or companies associated with them. Mr Dredge said that at the time that he prepared his draft report his understanding, based on what he had been told by Mr Ivory, was that Mr Ivory was seeking to draw a distinction based on colour between a product in respect of which he sought a patent and a product which had already been sold.
I accept the evidence of Mr Dredge that he was first informed about the mesh with a louvred appearance after he had submitted his draft report to Mr Ivory and his solicitor; that is, after he gave to Mr Ivory and the applicant’s solicitor a draft report which failed to support the applicant’s case against the respondents. Mr Dredge gave conflicting evidence as to whether he asked to see a sample of the louvred mesh but he implicitly acknowledged that he had not ever seen such a sample.
I am satisfied on the balance of probabilities that the alleged distinction between Solar Mesh Mark I and Solar Mesh Mark II upon which the applicant relies in this case is a distinction invented by Mr Ivory after he saw, and considered the significance of, Mr Dredge’s draft report.
THE APPLICANT’S CASE AS PLEADED
The applicant has pleaded by paragraph 16 of the Statement of Claim that the revocation of the petty patent by order of Wilcox J in the Tomlin proceeding was caused by the negligence of the respondents. The particulars given of this pleading are that the respondents failed to advise the applicant that the invention was incapable of patent; and, in the alternative, that the respondents failed to draft the specification in such a manner that it was not ambiguous and liable to revocation. This pleading appears to be based on the premise that the invention for which the respondents were instructed to obtain patent protection was a mesh product which differed from a published mesh only by reason of its colour.
I have found above that the applicant did not retain the respondents in respect of the petty patent application or relevantly at all. The respondents were under no duty to provide advice to the applicant concerning the patent application or the petty patent application.
In any event, I accept the evidence of Mr Dummer that on 5 July 1985 he gave Mr Smith advice to the following effect:
“The differences between the white mesh and the black mesh may not be enough to obtain a patent. Even if they are, the measure of protection that is achievable will be quite limited having regard to the slight differences between your invention and the prior art.”
Mr Lloyd gave evidence that Mr Dummer was justified in acting on the instructions given to him to seek patent protection for a mesh being “white or grey or a shade very similar thereto” notwithstanding that the method of construction of the mesh had been disclosed. Mr Lloyd also expressed the opinion that it would have been inappropriate for Mr Dummer to have refused to lodge a patent application for Mr Smith on the basis that white mesh could not result in a valid patent.
Mr Dredge expressed the opinion in his draft report, and affirmed the opinion in his oral evidence, that:
“… a Patent Attorney is obligated to prosecute a patent application at the behest of his client even if the Patent Attorney is of the view that a patent if granted would be invalid and the Patent Attorney would be negligent if he failed to do so.”
Mr Dredge agreed, however, that there might be circumstances in which it would be unethical for a patent attorney to prosecute a patent application where the alleged invention had been prior published.
Having regard to the samples of mesh provided to the respondents under cover of the letter of 21 June 1985, and the subsequent instructions received by Mr Dummer, I am satisfied that the advice given by Mr Dummer to Mr Smith on 5 July 1985 was appropriate in the circumstances. Mr Dummer repeated his advice that any patent protection obtained would be narrow in a letter from the respondents to Mr Smith dated 29 July 1986. Mr Dummer was under no duty, in my view, to advise that the invention for which patent protection was sought was necessarily incapable of patent as the relevant inventive step was limited to a change of colour (I.T.S. Rubber Limited’s Application (1979) RPC 318).
The applicant called no expert evidence to support its allegation that the respondents negligently “failed to draft the specification in such a manner that was not ambiguous and liable to revocation”.
Mr Dredge’s evidence in chief was based on the assumption that the respondents were retained to obtain patent protection for Solar Mesh Mark II, a mesh the method of construction of which had not been disclosed. He expressed no opinion concerning ambiguity in the petty patent specification. In his draft report Mr Dredge expressed the opinion that the petty patent specification “was properly drafted on the instructions given to Spruson & Ferguson by the client”. Whilst for the reason given above, I feel able to give little weight generally to the expert opinions of Mr Dredge, I note that this opinion expressed in his draft report is consistent with that expressed by Mr Lloyd.
Mr Lloyd’s opinion concerning the petty patent is as follows:
“In relation to the petty patent, I consider the specification to be directed to the invention for which Mr Smith sought protection since the claim of the petty patent was drafted with his full cooperation and approval. The steps taken by Spruson & Ferguson were appropriate having regard to the circumstances. It is my opinion that Spruson & Ferguson and, in particular, Mr Dummer exhibited standards of care and skill when preparing the petty patent application for Mr Smith which were at least equal to the standards of care and skill which I would have expected a reasonably competent firm of patent attorneys retained by an inventor [sic] to carry out that task”.
The applicant has failed to establish that the petty patent specification was negligently drafted.
The applicant has further pleaded in paragraph 17 of the Statement of Claim that:
“In further breach of the Respondent’s [sic] duty to the Applicant, the Respondents assigned a Clerk to handle the Applicant’s affairs and failed to advise the Applicant that the person it was dealing with was unqualified in the circumstances”.
I have already found that the respondents had no duty of care in the circumstances to the applicant. In any event, the evidence discloses that Mr Dummer was at all relevant times a technical assistant employed by the respondents. In all of his dealings in respect of the applications which are the subject of this proceeding he worked under the supervision of one or other of the respondents Messrs Hinde and Old. As Mr Dredge’s own evidence under cross-examination confirmed, it is common practice for patent attorneys to employ technical assistants who are in reality apprentice patent attorneys. Mr Dredge had himself been so employed and he gave evidence of moving from being supervised in respect of a large proportion of his work to being unsupervised. As Mr Smith did not give evidence I do not know whether he was aware that Mr Dummer was not a patent attorney. It was open to him to observe, however, that Mr Dummer’s name did not appear with the names of other patent attorneys on the respondents’ letterhead.
The claim made by paragraph 17 of the Statement of Claim must fail.
Paragraph 17A of the Statement of Claim reads as follows:
“17ABy reasons of the breach at paragraph 17 hereof the Respondent’s [sic] breached their duty of care as pleaded in paragraph 6 and 7 hereof.
PARTICULARS
(a)failing to identify the existence of a combination claim, up to and including the 5 August 1985, and then again up to and including 6 August 1986, and then again up to and including July 1987, of the invention (Solar Mesh Mark II) a sample of which was provided to the respondent’s [sic] on or about 21 June 1985 under cover of a letter from J & G Poyntons and Co; and the verbal instructions to obtain a Patent, provided to the Respondent’s [sic] employee, Mr Dummer between 10 May 1985 and 5 August 1985, and then again in July/August 1986, and then again June/July 1987 by the Applicant’s co-directors and co-inventors, Mr Ken [sic] Smith and Ken Ivory, to protect their invention. The integers of the Solar Mesh Mark II combination claim were apparent from the samples and informatio [sic] provided the interaction of these integers being the invention which integers were:
1.Increased bonding at the cross over points of the Mesh in comparison with Solar Mesh Mark I samples of which were provided to the Respondents as specified in subparagraph 3 below;
2.A flattening of the originally rounded PVC coated fibreglass straightweave Mesh;
3.An aperture hole size to give the desired effect of climatic control, the size already known from Solar Mesh Mark I, (Solar Mesh I was a miniature louvre type mesh which features were identified from the samples sent to the Respondents in May 1985 under cover of letter from J & G Poyntons and Co. dated 10 May 1985 and again on 21 June 1985 under cover of letter of that date and also from information provided to the Respondents employee Mr Dummer, by the Applicant’s co-directors and co-inventors Mr Ken [sic] Smith, and Ken Ivory, between 10 May 1985 and 6 August 1985.
(b)Failure to identify and incorporate Kenneth Ivory as a Co-inventor of Solar Mesh Mark II in the provisional and standard patent application and the petty patent application.
17A(c)Failure to exclude a reference to colour in drafting and filing;
1)a provisional specification on 5 August 1985;
2)a Complete Specification on 6 August 1986;
3)a Petty Patent on 3 July 1987.
all of which, made a reference to Colour (in particular using the words white, grey or a lighter shade of grey), thereby limiting the applicants [sic] Provisional, Complete and Petty Patents.”
I repeat my finding that the respondents owed no duty of care to the applicant. Further, no causal connection between any matter particularised in paragraph 17A and the breach of duty alleged in paragraph 17 is established on the evidence. Perhaps more importantly, all of the matters included in the particulars to paragraph 17A assume the existence of Solar Mesh Mark II as a new invention. That is, they assume that while Solar Mesh Mark I had been prior published in mid 1985, Solar Mesh Mark II had not been. I have found as a matter of fact that Solar Mesh Mark I as described by Mr Ivory did not exist and that the respondents were retained to seek patent protection for a mesh which differed only in colour from a mesh which had been disclosed. Moreover, I have found that Mr Ivory was not a co-inventor with Mr Smith of any relevant mesh.
The claims made by paragraph 17A of the Statement of Claim must all fail.
Finally, paragraph 18 of the Statement of Claim reads as follows:
“The Respondent [sic] failed to act on the Applicant’s instructions when the Applicant forwarded to the Respondent [sic] a sample of the infringers [sic] product in order that the petty patent application could be worded in such a manner so as to entrap the infringer, in breach of its duty the Respondents failed to word the petty patent in such a manner so as to prevent infringers from trading in a similar product to the detriment of the Applicant”.
The evidence discloses that the respondents had not been provided with a sample of the Tomlin mesh which the applicant regarded as an infringing product at the time when the petty patent application was lodged. By letter dated 2 June 1987, Mr Dummer had suggested to Mr Smith that he provide the respondents with a sample of such mesh but no sample was in fact provided. The applicant did not attempt to prove to the contrary. The claim in paragraph 18 of the Statement of Claim must also fail.
CONCLUSION
The application must be dismissed. I will hear counsel as to costs.
I certify that the preceding ninety-eight (98) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson. Associate:
Dated: 14 May 1999
Counsel for the Applicant: Mr F. Santisi with Mr P Gwozdecky Solicitor for the Applicant: Mary Salama Solicitor Counsel for the Respondents: Mr J.L.B. Allsop SC with Mr J.V. Nicholas Solicitor for the Respondents: Ebsworth & Ebsworth Date of Hearing: 23, 24, 30 November 1998, 1-4, 7-11 December 1998, 15-19, 22-26, 30 March 1999 Date of Judgment: 14 May 1999
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