BECKSWIFT LIMITED

[1997] APO 56

official notice

decision of a deputy commissioner of patents

Patent :          614373 in the name of Beckswift Limited

Title:          Electrical apparatus incorporating shield means to increase the current carrying capacity of electrode thereof.

Action:          Request under s223 for an extension of time to pay a renewal fee.

Decision:          Issued            .

Abstract

At the anniversary date there was no intention to pay the relevant renewal fee. During the so-called grace period the patentee changed their mind, but because of an error or omission the fee was paid 2 days after the end of that period.

The operation of s223 is conditioned upon the identification of the act that was not done, and extending the time for doing that act. If a renewal fee is validly paid after the anniversary, it is necessarily paid ‘in a period that is extended because of r13.6(3)’. There is no other basis for paying a renewal fee after the expiration of the anniversary (assuming there was no error or omission prior to the anniversary.)

The relevant act that was not done was the payment of the fee ‘in a period that is extended because of r13.6(3)’. That action is specifically excluded from the application of s223 by r22.11(3)(b). Accordingly s223 is not available in the circumstances.

Extension of time refused.

patents act 1990

decision of a deputy commissioner of patents

Re:Patent 614373 in the name of Beckswift Limited, and a request under s223 for an extension of time to pay a renewal fee.

background

Patent no. 614373 was applied for on 21 April 1989. Consequently renewal fees fall due on 21 April each year. The renewal fee due 21 April 1996 was not paid by that date, nor by the end of the 6-month ‘grace period’ which expired on 21 October 1996. However on Wed. 23 October 1996 (2 days after the end of the grace period) the patentee paid the renewal fee and filed a request under s223 for an extension of time to pay that fee.

The circumstances surrounding the failure to timely pay the renewal fee are set out in a statutory declaration by Peter Smart [a Chartered Patent Agent (in the UK) and European Patent Attorney] who asserts that he has responsibility for the care of the affairs of the patentee. In brief, Mr Smart declares:

• the patentee is a company within a multinational group of companies (Tetra Laval Group);

• in 1996 Tetra Laval decided it would close down Beckswift Limited (the patentee);

• as a result, the patent (and other patents around the world) would not be maintained;

• the decision was provisional in the sense that ‘no steps were taken to prevent the patents and patent applications in question from being revived if possible at a future date should there be a change of plan’;

• in April 1996, Smart instructed Davies Collison Cave to mark their records to indicate the patent would not be renewed;

• on 1 August 1996, Tetra enquired of Smart the precise status of (inter alia) the patent, and in particular whether it was still possible to revive it;

• on 10 September, Tetra instructed the payment of the renewal fees [after the due date, but well before the end of the grace period]; and

• a staff member in the firm of Mr Smart failed to action the instruction. It came to attention on 21 October (the last day of the grace period), but because of the time difference between Europe and Australia, it was too late to effect payment.

In summary:

• at the anniversary of the patent there was no intention on the part of the patentee to pay the renewal fee by that date;

• the patentee subsequently changed their mind. At that point in time, provided they paid the renewal fee (together with extension fees) within the so-called ‘grace period’ provided by regulation 13.6(3), the patent would have been renewed; and

• the fee was not paid in the grace period because of an alleged error or omission. Consequently the patent ceased as of the anniversary date.

In the initial considerations by the Commissioner, the issue of whether an extension of time was statutorially available in the circumstances arose. After some correspondence, the matter was set for hearing on 5 August 1997. At the hearing the patentee was represented by Mr K Leslie of Davies Collison Cave, Melbourne.

The present request under s223 has not as yet been advertised pursuant to s223(5), and there thus remains the possibility that (should I consider an extension is possible) the request might be opposed by a third party. Consequently this decision is limited to the preliminary issue of whether an extension of time to pay a renewal fee is possible if the relevant error or omission occurs within the grace period.

Legislative provisions

The requirements in relation to the payment of renewal fees are set out in regulation 13.6, which relevantly provides:

Time for payment of renewal fee for standard patent

13.6 (1)For the purposes of paragraph 143 (a) of the Act ("ceasing of patents"), subject to subregulation (2), the period of 12 months ending at the end of an anniversary of the date of the patent (being an anniversary specified in column 2 of item 7 or 8 of Part 2 in Schedule 7) is prescribed for the payment of renewal fee.

(2) ...

(3)If a renewal fee is not paid in the period referred to in subregulation (1), but is paid within 6 months after the anniversary concerned, the prescribed period is extended to the day on which the fee is paid.

That is, r13.6(1) requires payment of a fee by the anniversary date. R13.6(3) provides for an automatic extension of time if the fee is paid within a subsequent period of 6 months (the grace period). Unlike the general extension available under s223, the extension under r13.6(3) does not require any justification or explanation.

Generally, when a fee is not paid within the prescribed time an extension may be available under the general extension provision of s223(2), which relevantly provides:

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.

It is noteworthy that the use of the word ‘because’ necessitates a causative relationship between the relevant error and the failure to do the relevant act [see, for example, Reilly v Commissioner of Patents (1996) AIPC ¶91-217 at para 44.] Amongst other things, this means (perhaps obviously) that the relevant error must have occurred before the relevant date.

It is also noteworthy that, where a relevant act has not been done, the extension of time is granted for the doing of that act – it is not granted for the doing of some other act. That is, the operation of s223 is conditioned upon the identification of the act that was not done, and extending the time for doing that act.

Additionally (and critical to the present circumstances) the relevant act of s223 is limited through s223(11) to the doing of an action other than a prescribed action. Such actions are prescribed in regulation 22.11(3), which relevantly provides:

1. For the purposes of the definition of "relevant act" in subsection 223 (11) of the Act, each of the following actions is prescribed:

...

(b)paying a fee in a period that is extended because of subregulation 13.3 (3) ("prescribed period: continuation fees") or subregulation 13.6 (3) ("time for payment of renewal fee for standard patent").

That is, the action referred to in reg 22.11(3)(b) is not a relevant act to which the provisions of s223 apply.

The Paris Convention

Regulation 13.6(3) arises from Art 5^bis of the Paris Convention for the Protection of Industrial Property of March 20, 1883, as subsequently revised. [This Article also gives rise to the term ‘grace period’.] Art 5^bis provides:

[All Industrial Property Rights: Period of Grace for the Payment of Fees for the Maintenance of Rights; Patents: Restoration]

1)   A period of grace of not less than six months shall be allowed for the payment of the fees prescribed for the maintenance of industrial property rights, subject, if the domestic legislation so provides, to the payment of a surcharge.

2)   The countries of the Union shall have the right to provide for the restoration of patents which have lapsed by reason of non-payment of fees.

I do not consider the specific provisions of the Convention to be of any direct assistance to my present considerations, as the Convention is not per se part of Australian legislation. However, to the extent that Australia has an obligation to provide legislation that is consistent with the Convention, I note that r13.6(3) clearly meets the obligations of Art 5^bis(1). Further [as Art 5^bis(2) makes clear] outside of that 6-month grace period countries of the Union have a right [but not an obligation] to provide for the restoration of patents – with no common requirements being specified. That is, restoration in such circumstances is entirely the subject of national law, and the practice of other countries can be of no relevance to the considerations under Australian law. Thus I consider submissions referring to the practice in other countries (while of some interest) to be of no relevance to the interpretation of Australian legislation.

Discussion

Mr Leslie’s submissions at the hearing canvassed a number of issues concerning the statutory interpretation of s223, and the practice in similar circumstances in other countries. In particular Mr Leslie referred me to re Foldi et al 38 IPR 131, a recent decision of the Commissioner. That decision concerned a similar set of circumstances – at the anniversary, a decision not to pay; that decision subsequently changing, but a subsequent error or omission resulted in the fee not being paid. The decision found that the extension under s223 could be granted on the basis of accrued rights [s.8(c), Acts Interpretation Act] – since at the time the decision was made not to pay the fee, regulation 22.11(2)(b) did not refer to reg 13.6(3). Mr Leslie submitted that the interpretation of the law in Foldi was merely obiter (as it was not required to reach the conclusion that the extension should be allowed). Accordingly he asserted I was not bound by that decision, and that I should hear him on the interpretation of the law. While I do not necessarily agree that the relevant conclusions in Foldi are merely obiter, I considered it appropriate in all the circumstances to deal with the present case from first principles.

An essential element in respect of any request under s223 is the identification of the ‘relevant act’ that is required to be done within a ‘certain time’. I understand required means ‘requisite or needed to secure an advantage or avoid a disadvantage’. [Scaniainventor v Commissioner of Patents (1981) 36 ALR 101.]

As I indicated above, a s223 extension requires a causative relationship between the error or omission, and the relevant act that was not done. That causative relationship necessitates the error or omission occurring before the expiration of that ‘certain time’. Since the alleged error occurred after the anniversary of the patent, the ‘certain time’ cannot be the period set out in r13.6(1), of twelve months ending on the anniversary (with the relevant act being the payment of the renewal fee).

This being the case, for s223 to have any operation there must be some relevant date that occurs after the alleged error. That date arises out of r13.6(3), which gives effect to the grace period by extending the period set out in r13.6(1) by up to 6 months provided the fee is paid within that time. It is also important to note that where:

• the renewal fee is not paid by the anniversary; and

• failure to pay by the anniversary was not due to an error or omission prior to the anniversary (such that s223 is not available to extend from the anniversary)

an extension under r13.6(3) must occur in order for a renewal fee paid after the relevant anniversary to be timely paid. No other mechanism is available for validating that payment. Thus any valid payment of a renewal fee after the anniversary date is necessarily effected ‘in a period that is extended because of r13.6(3)’. Conversely, if the renewal fee is not timely paid the relevant action that was not done is necessarily the payment of the fee ‘in a period that is extended because of r13.6(3)’. But that action is specifically excluded from the application of s223 [by r22.11(3)(b)] – with the consequence that s223 is not available to rectify any error or omission that occurs after the anniversary date.

As is clear from the above, I have considered the application of s223 in the specific context of the act that was not done within the certain time. I consider this to be the plain meaning of s223. However, if the focus is changed from the act that was not done within the certain time, to what acts one might otherwise like to do to recover the application, some illusory support might be garnered for the view that r22.11(3) does not exclude s223 from the present circumstances. For example:

• r22.11(3)(b) uses the present tense in defining the exclusion – ‘paying a fee in a period that IS extended because of ...’. If the focus is on what has to be done given the fee was not paid, it could be asserted that because the fee was not paid within the grace period, the fee payment clearly was not paid within a period that is extended because of r13.6(3) – and therefore the exclusion of r13.6(3)(b) does not apply.

  A potential difficulty of this construction is whether any purpose remains for r22.11(3)(b). In response to this it might be asserted that the purpose of r22.11(3)(b) is to prevent an overlap in the operation of s223 and r13.6(3), and the use of is makes sense in this context. However I observe that avoidance of this overlap is not required. The extension under r13.6(3) is automatic upon payment of the fee. Any s223 application is rendered nugatory immediately upon filing the renewal fee through the non-discretionary extension of r13.6(3). Consequently any possible overlap or conflict between different extension mechanisms is resolved. This is quite different to the potential overlap [avoided by r22.11(3)(a)] between s223 and r5.10, involving the application of two different discretionary considerations.

• It could also be asserted that the application of s223 should be confined narrowly to the period specified in r13.6(3) – that the relevant act is the making of an application for an extension under r13.6(3) – such that one would extend the period provided in that regulation as a separate consideration to extending the time for paying the renewal fee. Having so extended that period, one would then apply r13.6(3) to extend the period for paying the renewal fee for a period in excess of six months.

  Apart from the fact that the present request under s223 is stated to be ‘to pay the renewal fee’ (and is therefore inconsistent with this approach), the artifice of this construction becomes apparent when one has regard to the way r3.6(3) operates – viz upon (timely) payment of a renewal fee. There is no request for an extension under r13.6(3). Nor is there any fee for the application per se of r3.6(3) – even though the renewal fee itself includes a component dependant upon when the fee is paid within the grace period. That is, there is no relevant act of making an application for an extension under r13.6(3) – in isolation from paying the renewal fee – to enliven the application of s223 in the manner sought.

Thus while these arguments might have some superficial attractiveness in arguing for the application of s223 in the circumstances, they are not based on the act that was not done within the certain time – and therefore do not provide a basis for the operation of s223.

Accordingly I am satisfied that, where a renewal fee has not been paid by the due date (the anniversary of the patent), and there has been no error or omission prior to that date, the beneficial provisions of s223 are not available to protect a subsequent decision to pay the fee within the grace period from the effects of errors or omissions. I thus agree with the conclusion in Foldi.

Decision

In the present case, there was no intention at the anniversary date to pay the renewal fee. The suggestion that any such decision was provisional in the sense that no action had been taken to prevent subsequent restoration, is not relevant. The question is whether there was an intention to pay the renewal fee by the anniversary date, not whether there was a intention not to pay. I have also considered whether it could be said that the non-payment of the renewal fee by the anniversary was itself the result of an error or omission. However it is well established that the failure to perform an act cannot itself be the ‘error or omission’ required to enliven the provisions of s223 (see, for example, Kimberly-Clark Ltd v Commissioner of Patents 13 IPR 569 at page 580), and otherwise there is no suggestion of any causative “error or omission” prior to the anniversary date. I am therefore satisfied that there is no basis for s223 to extend the time prescribed under regulation 13.6(1) for the purpose of paying the renewal fee.

It is apparent that after the anniversary date the patentee had a change of mind. If the fee payment had been effected before the end of the grace period, the patent would have been renewed. However an error or omission intervened, resulting in the payment occurring 2 days after the expiry of the grace period. For the reasons set out above, I consider s223 is not available for the purpose of paying a renewal fee in these circumstances.

I also note that (unlike the Foldi case) the regulations were in their present form at the time the relevant decisions were made by the patentee – that is, there are no accrued rights flowing from the amendment to the regulations effected 9 May 1995 [SR82 of 1995, reg 11.1].

Accordingly I refuse to grant the extension of time sought (with the consequence that the patent has irrevocably ceased.)

D Herald
Deputy Commissioner of Patents

Patent attorneys for the patentee     :  Davies Collison & Cave, Melbourne