CNC Components Pty Ltd v SCD American Vehicles Pty Ltd
[2024] APO 18
•15 May 2024
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
CNC Components Pty Ltd v SCD American Vehicles Pty Ltd [2024] APO 18
Patent Application: 2021203073; 2021102546
Title:Steering Transfer Assembly
Patent Applicant: SCD American Vehicles Pty Ltd
Requestor:CNC Components Pty Ltd
Delegate:Cathy Douglas
Decision Date: 15 May 2024
Hearing Date: 15 March 2024, by Video Conference
Catchwords: PATENTS – entitlement – inventive concept determined from specification – patentability under s18 of Patents Act not part of entitlement calculus – who was responsible for inventive concept – contribution not material - reduction to practice – further submissions sought on award of costs
Representation: Patent attorney for the Applicant: Philipp Orth
Counsel for the Requestor: A. R. Lang SC
Patent attorney for the Requestor: Michael Buck IP
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2021203073; 2021102546
Title: Steering Transfer Assembly
Patent Applicant: SCD American Vehicles Pty Ltd
Date of Decision: 15 May 2024
DECISION
The Requestor is successful. I declare that the Requestor, CNC Components Pty Ltd, is the sole eligible person under sections 36 and 191A of the PatentsAct 1990 for patent application 2021203073 and innovation patent 2021102546 respectively, and the Applicant of record is not an eligible person. In respect of innovation patent 2021102546, in accordance with s191A(3), the Commissioner will rectify the Register.
I allow the parties two weeks to provide submissions on the appropriate award of costs and defer the award of costs accordingly.
REASONS FOR DECISION
Background
This matter relates to a standard patent application and an innovation patent having identical specifications as they presently stand – that is, identical description, claims and drawings. Patent application 2021203073 (the application) and innovation patent 2021102546 (the innovation) were both filed on 13 May 2021, both in the name of SCD American Vehicles Pty Ltd (the Applicant), and both listing the inventor as Eddie Kocwa. The innovation patent was granted on 16 June 2021. I will refer to the description of the application and the innovation as “the description”. I will collectively refer to the application and the innovation as “the specifications”.
On 19 April 2023, the Commissioner received requests from CNC Components Pty Ltd (the Requestor) for a declaration under section 36(1) of the Patents Act 1990 (the Act) in respect of the application, and a request for the Commissioner to rectify an error in the Register under section 191A(2) in respect of the innovation patent, both in favour of the Requestor. Whilst the latter states that the grounds for the request are based on section 191A(1), it is quite clear that the matter in respect of the innovation is better characterised as a request under s191A(2), and the Commissioner has proceeded on this basis. In line with the requests, they submitted that Thomas Young, Director, together with Michael Irvine, Head of Research and Development, both of the Requestor company, designed and refined an improved steering transfer system between 2014 and 2021.[1] The Requestor stated that they were not informed when the Applicant filed the application and innovation on 13 May 2021, and submitted that the named inventor, Eddie Kocwa, had no involvement in developing the steering transfer.[2] I have retained the title of the Requestor’s submissions before the hearing as the CNC Submissions in Chief.
[1] CNC Submission in Chief at [6].
[2] CNC Submission in Chief at [8], [9]; Irving at [9]-[10]; Young 2 at [19].
The evidence in respect of the application and innovation is the same. On 19 April 2023, the Requestor filed a Statement of Grounds, and declarations by Thomas Young (Young 1) and Michael Irving (Irving), with their requests. Young 1 includes Annexures TY-1 to TY-7, and the Irving declaration includes Annexures MI-1 to MI-5. The TY-1 to TY-5 and MI-1 to MI-5 Annexures are the same set of drawings (the CNC drawings). I will call these declarations and their Annexures “Evidence in support (EIS)” for convenience. The grounds for both requests are:
i. Eddie Kocwa is not an inventor within the meaning under the Act; and
ii. Therefore, SCD American Vehicles Pty Ltd is not eligible to be granted a patent under section 15 of the Act.The Applicant indicated in a letter of 28 April 2023 that they intended to defend their entitlement. Furthermore, on 24 May 2023 the Applicant filed an Application for Dismissal of Opposition. On 25 May 2023, a Delegate of the Commissioner wrote to the parties, declining to dismiss the opposition. The Applicant, in their pre-hearing submissions (which I will refer to as the SCD Submissions) acknowledged that the Requestor manufactured and supplied a steering assembly to the Applicant,[3] without conceding Young and Irvine’s inventorship.[4]
[3] SCD Submissions at [2], [7], [18].
[4] SCD Submissions at [12].
On 17 July 2023 the Applicant filed a declaration by Philipp Orth (the Orth declaration) having Exhibits PSO-1 to PSO-5, which I will call “Evidence in Answer (EIA)” for convenience. On 17 August 2023, the Requestor filed a second declaration by Thomas Young (Young 2) which I will call “Evidence in Reply (EIR)” for convenience.
The hearing of both the application and innovation was held together on 15 March 2024 by video conference.
Onus of Proof
As noted in Woodside Energy Limited v Richard John Moore[5] the Requestor bears the onus to prove their case on entitlement on the balance of probabilities. However, the evidentiary burden may shift under some circumstances, especially when knowledge of relevant facts lies particularly with one party or the other; see Dunlop Holdings Limited's Application[6] (“Dunlop Holdings”)
[5] [2018] APO 82 at [37].
[6] [1979] RPC 523 at 542 to 544.
The Law
Subsection 36(1) of the Act reads as follows:
“If:
(a)a patent application has been made and, in the case of a complete application, the patent has not been granted; and
(b)an application for a declaration by the Commissioner is made by one or more persons (the section 36 applicants) in accordance with the regulations; and
(c)the Commissioner is satisfied on the balance of probabilities, in relation to an invention disclosed in the specification filed in relation to the application for the patent:
(i)that the nominated person is not an eligible person, but that the section 36 applicants are eligible persons; or
(ii)that the nominated person is an eligible person, but that the section 36 applicants are also eligible persons;
the Commissioner may declare in writing that the persons who the Commissioner is satisfied are eligible persons are eligible persons in relation to the invention as so disclosed.”
Subsection 191A(2) of the Act provides as follows:
The Commissioner must, on application, make a declaration as to a person’s entitlement to a patent, or a share in a patent, if the Commissioner is satisfied, on the balance of probabilities, that the Register does not properly record a person’s entitlement to a patent, or a share in a patent:
(a) because the patent, or a share in the patent, was granted to a person who was not entitled to it; or
(b) because the patent, or a share in the patent, was not granted to a person who was entitled to it; or
(c) for any other reason.
The Dictionary at Schedule 1 of the Act defines an eligible person as follows:
“eligible person, in relation to an invention, means a person to whom a patent for the invention may be granted under section 15.”
Section 15(1) of the Act reads as follows:
“Subject to this Act, a patent for an invention may only be granted to a person who:
(a) is the inventor; or
(b) would, on the grant of a patent for the invention, be entitled to have the patent assigned to the person; or
(c) derives title to the invention from the inventor or a person mentioned in paragraph (b); or
(d) is the legal representative of a deceased person mentioned in paragraph (a), (b) or (c).”
That is, a patent may be granted to the inventor of an invention or someone who derives title to the invention from the inventor. Such a person is also an eligible person for the purposes of s36(1) and section 191A.
The law on inventorship/entitlement has been considered in University of Western Australia v Gray[7] (UWA) and Polwood Pty Ltd v Foxworth Pty Ltd[8] (Polwood). The Full Court in UWA noted with approval the following steps used by the primary judge for determining who is an eligible person:
i.identify the “inventive concept” of the invention as defined in the claims.
ii.determine inventorship including the person responsible for the inventive concept and the time of conception as distinct from its verification and reduction into practice.
iii.determine whether any contractual or fiduciary relationships give rise to proprietary rights in the invention.[9]
[7] [2009] FCAFC 116.
[8] [2008] FCAFC 9.
[9] UWA at [253].
The Full Court in UWA also found no fault in the reasoning of French J (as he was then) in his discussion of overseas authorities in the first instance decision of University of Western Australia v Gray (No 20)[10] (Gray). French J identified the following principles from those authorities:
“The inventive concept marks a boundary between invention and verification…. The Court of Appeals … set out the following principles as established by US appellate courts:
1. Conception is the touchstone of inventorship, the completion of the mental part of inventions.
2. Conception is the ‘formation in the mind of the inventor of a definite and permanent idea of the complete and operative invention as it is hereafter to be applied in practice’. It is complete only when the idea is so clearly defined in the inventor’s mind that only ordinary skill would be necessary to reduce the invention to practice without extensive research or experimentation.
3. An inventor need not know that the invention will work for conception to be complete. The inventor need only show that he or she had the idea. The discovery that an invention actually works is part of its reduction to practice.
4. It is not the law that the inventor’s definite and permanent idea must include a reasonable expectation that the invention will work for its intended purpose even when it deals with uncertain or experimental disciplines where the inventor cannot reasonably believe that an idea will be operable until some result supports that conclusion.
The propositions set out in Burroughs Wellcome (1994) 40 F 3 1223 define ‘invention’ by reference to completion in concept which distinguishes the invention from its verification and reduction to practice.”
[10] [2008] FCA 498 at [1426].
The Court in UWA also stated:
“If the employee’s invention is the, or a, product of what he or she was employed to do, and did do, it will belong to the employer unless otherwise agreed”.[11]
[11] UWA at [153].
Polwood provides guidance on determining the inventive concept:
“…What constitutes the invention can be determined from the particular patent specification which includes the claims. In some cases, evidence can assist…
…One criterion for inventorship may be to determine whether the person’s contribution had a material effect on the final invention. It may be that an invention is made as part of a collaborative effort. In those circumstances, it would ordinarily follow that the collaborators are joint inventors of the product of the collaboration….
To ascertain the inventor for the purposes of entitlement to the grant of the patent it is therefore necessary to determine the contributions to the invention described in the patent application. The claims may assist in that determination, bearing in mind that the claims may be to less than the totality of the invention…”[12]
[12] Polwood at [33]-[35].
On assessing the contributions of various parties Polwood states:
“In JMVB Enterprises Pty Ltd v Camoflag Pty Ltd (2005) 67 IPR 68 Crennan J said at [132] that rights in an invention are determined by objectively assessing contributions to the invention rather than assessing the inventiveness of respective contributions. The invention is to be looked at as a whole, as well as the component parts. The relationship between the participants, such as a collaboration (citing Re Applications by CSIRO and Gilbert (1995) 31 IPR 67 at 72–73) is a relevant factor. Her Honour put it on the basis that, if the final concept of the invention would not have come about without a particular person’s involvement, then that person has entitlement to the invention (at [132]).”[13]
[13] Ibid at [53].
In summary:
“The invention or inventive concept of a patent or patent application should be discerned from the specification, the whole of the specification including the claims. The body of the specification describes the invention and should explain the inventive concepts involved. While the claims may claim less than the whole of the invention, they represent the patentee's description of the invention sought to be protected and for which the monopoly is claimed. The claims assist in understanding the invention and the inventive concept or concepts that gave rise to it. There may be only one invention but it may be the subject of more than one inventive concept or inventive contribution. The invention may consist of a combination of elements. It may be that different persons contributed to that combination.”[14]
[14] Ibid at [60].
On questions of co-inventorship, the decision in Kafataris v Davis (Kafataris )[15] demonstrated the application of the principles in Polwood.[16] To determine whether a party was a co-inventor, the Court considered whether their contribution was qualitative or quantitative. The Court agreed with the primary judge that the contribution in question in Kafataris merely provided another example of the invention – it did not bring about a change to the invention. It was an application of the inventive concept, rather than a qualitative contribution to the invention. [17]
[15] [2016] FCAFC 134.
[16] Ibid at [42]-[43].
[17] Ibid at [74]-[75].
More recently, the full Federal Court confirmed the Polwood decision and clarified the relationship between inventiveness and entitlement in Vehicle Monitoring Systems Pty Ltd v SARB Management Group Pty Ltd (SARB).[18]
“The present state of Australian law on entitlement is declared in Polwood. Neither party suggested that we should depart from that authority. Polwood adopted, without qualification, Crennan J’s observation in JMVB that rights in an invention are determined by objectively assessing contributions to the invention rather than assessing the inventiveness of respective contributions. That approach conforms to principle. The invention or the inventive concept (in Polwood the Full Court appears to have used these terms synonymously) is discerned from the whole of the specification, not just the claims. However, the requirements of s 18 of the Act, dealing with the characteristics of a patentable invention, including (in the case of a standard patent) the need for an inventive step, are directed specifically to the invention as claimed (i.e., as defined by the claims). The question of entitlement is separate to, and distinct from, the question of patentability assessed by reference to the patent claims. It involves a broader inquiry. It stands to reason, therefore, that consideration of the requirements of patentability under s 18 of the Act, including the existence of an inventive step within the meaning of s 7(2) of the Act, is not part of the entitlement calculus….
As to the respondent’s submission concerning information which does not incorporate inventive ingenuity, and which has been disclosed publicly without fetter of confidentiality, we repeat our earlier observation that the question of entitlement is separate to, and distinct from, the question of patentability assessed by reference only to the patent claims. The inventive concept is discerned from the whole of the specification. This focusses attention on how the patent applicant chooses to describe its invention. Further, in accordance with the principle stated in JMVB, and accepted by the Full Court in Polwood, rights in an invention are determined by objectively assessing contributions to the invention as so described, rather than assessing the inventiveness of respective contributions.”[19]
[18] [2021] FCAFC 224.
[19] SARB at [104] and [147].
Following the principles outlined in UWA, to decide the s36 and s191A matters, I need to first identify the inventive concept for the application and innovation, and then determine the question of inventorship. As per SARB, novelty and inventive/innovative step are separate considerations from entitlement. Finally, I need to determine whether any contractual or fiduciary relationships give rise to proprietary rights in the invention. After discussing the specification, I will consider each of these questions in turn. I note that while s36 permits consideration of entitlement to “an invention disclosed in the specification filed in relation to the application for the patent” as per s36(1)(c), s191A is limited to a determination regarding “entitlement to a patent”, that is, based on the invention claimed.
The invention as described and claimed
The specifications describe and claim a steering transfer assembly, used to convert left hand drive vehicles to right hand drive and vice versa. The device is illustrated in Figure 1, reproduced below.
Notably in this Figure, there is a shaft (24) made up of a first portion (26) and second portion (28), attached to a first gearbox (12) and a second gearbox (18). The first portion (26) is slidable relative to the second portion (28) so that the distance between the two gearboxes can be adjusted. Both gearboxes have a first input (14, 20) and a second output (16, 22). (No “first output” is described). The shaft (24) is connected to the second output (16) of the first gearbox by a universal joint (30), and at the other end is connected to the first input (20) of the second gearbox by another universal joint (32).[20] The first input of the first gearbox (14) is connectable to a steering wheel, and the second output of the second gearbox (22) is connectable to a steering column.[21] Figures 2-7 and accompanying text provide more detail of the various parts of the device, which I will refer to when discussing the meaning of certain terms.
[20] Description at page 7 lines 13-30.
[21] Description at page 2 lines 19-21.
The specifications conclude with five claims, identical in the application and the innovation. Claim 1 recites a steering transfer assembly having “a shaft assembly with a first portion and a second portion, the first portion securable to the second portion and slidable relative to the second portion in an unsecured condition”. Claims 3 and 5 are also independent claims which contain a very similar statement about the shaft assembly as claim 1, except that the word “slidable” is replaced with “adjustable”. Nothing turns on this difference. Claim 1 is reproduced below.
A steering transfer assembly having:
a first gearbox having a first input and a second output, the first input being angled relative to the second output;
a second gearbox having a first input and a second output the first input being angled relative to the second output;
a shaft assembly with a first portion and a second portion, the first portion securable to the second portion and slidable relative to the second portion in an unsecured condition;
wherein the shaft assembly is operatively attached or attachable between the second output of the first gearbox and the first input of the second gearbox, and wherein the first input of the first gearbox is operatively connected or connectable to a steering wheel, and wherein the second output of the second gearbox is operatively connected or connectable to a steering column.
The meaning of splined and slotted
The description indicates that the device uses connections described as “splined” or “slotted” to join the two shaft portions together and to join the shaft to the gearboxes. The parties differ in their definition of a “splined” connection and the significance of this feature in understanding the inventive concept. Neither the Requestor, nor the Applicant, have provided evidence from a skilled person as to the meaning of a “splined” connection to assist, however the submissions from both parties are relevant to this question. As will become apparent, in the final analysis the distinction will have no bearing on my decision. However, given the focus on this concept at the hearing, I will discuss the views of the parties here.
The Applicant provided a copy of the text of the description of the application and innovation annotated with certain portions of text highlighted in either blue or yellow as Exhibit PSO-1.[22] Most of the text is highlighted in blue, including the description of the shaft assembly described above, and the entirety of the claims. Seven sentences of text are highlighted in yellow. These yellow highlighted portions relate to details of the connection type between the shaft assembly and the gearbox (page 3), details about the type of connection between the first and second portions of the shaft (page 4) and one sentence on each of pages 5 and 7 about the possibility of shortening the steering column to which a gearbox of the device is attached.
[22] Exhibit PSO-1 to Orth Declaration.
The text from page 3 that discusses “splined” connections is reproduced below. In the annotated text provided by the Applicant, the second and fourth sentences are highlighted in yellow, which the Applicant submitted are elements they developed. I have underlined this text. The first and third sentences are highlighted in blue.
“Preferably the shaft assembly is connected to the second output of the first gearbox via a splined connection. In another embodiment, the shaft assembly is connected to the second output of the first gearbox via a slotted connection. Preferably the shaft assembly is connected to the first input of the second gearbox via a splined connection. In another embodiment, the shaft assembly is connected to the first input of the second gearbox via a slotted connection.”[23] (underline added)
[23] Description at page 3 lines 18-24.
At the hearing, I asked the Attorney for the Applicant, Mr Orth, to point to any further parts of the specifications that elaborate on the meaning of the connections described in this text. In his view, “splined” and “slotted” mean distinct connection types. He pointed to the “star-shaped” or “gear shaped” arrangements in the drawings as being splined connections.
To ensure I had not misunderstood, I asked if a “splined” connection was “toothed-shaped”. Mr Orth agreed and took me to Figure 2 in the application and innovation which illustrate that the ends of the gearbox (18) at items (20) and (22) are splined arrangements, also seen in the drawing annexed as TY-2 in Young 1. Figure 2 is reproduced below.
In contrast, Mr Orth understood the connection at the ends of the shaft illustrated in MI-4, (the same as TY-4), as a “slotted” connection. Annexure TY-4 is reproduced below.
This is similar to Figures 3 and 4 of the application and innovation provided below, which illustrate first portion (26) of the shaft assembly of the device. Flat sides (36) and (38) engage with the flat sides of a slot of the second portion of the shaft (not shown). Flat sides (42) and (44) engage with the flat sides of a slot of a universal joint.[24] I understand Mr Orth’s submission to be that the flat sides that engage with a slot are a “slotted” connection.
[24] Description at page 8 lines 6-12.
The Requestor, on the other hand, characterised a “spline” as “one of a number of uniformly spaced keys cut into a shaft parallel to its axis”, based on the definition in Macquarie Dictionary online. Counsel further explained that the two planar sides of the shaft (shown as (36) and (38) in Figure 4 above) are “uniformly spaced keys” cut into the shaft, which key into an aperture.[25] This arrangement is also known as a “DD type” connection. Counsel highlighted that both the “toothed” connection and the “slotted” connection have these “uniformly spaced keys”, and both prevent relative rotational movement of the parts. At the hearing, Counsel further referred to the definition of “key” in the Macquarie Dictionary online, pointing me to definitions 8 and 10. The relevant phrases are that a key is a “piece inserted in a hole or space to lock or hold parts of a mechanism or structure together”, or “a contrivance for grasping or turning a bolt, nut, etc”.[26] I understand the Requestor’s submission to be that both the “slotted” or “DD type” connections, and the “toothed” connections in the drawings of the application and innovation have elements that fall within the definition of “keys”, and are therefore both “splined” connections. In other words, a “DD type” connection is one form of a “splined” arrangement, and a splined arrangement could also be described as a form of “slotted” connection.[27]
[25] CNC Submissions in Chief at [37].
[26] Macquarie Dictionary online, see CNC Submissions in Chief at [40]-[41].
Reading the specification as a whole, I am not convinced that the Requestor’s view is the most natural reading of the text. Different words usually carry distinct meanings, and the present description appears to me to be using the term “spline” in a narrower sense than that suggested by the Requestor, to mean the “toothed” arrangement of the gearbox connections in Figure 2. In the context of the description, then, I will take the Applicant’s meaning which characterises the term “splined” or “toothed”, and “slotted” as distinct arrangements, (although I do not consider that it will alter the outcome, as I have said above). To avoid confusion, I will refer to a “toothed” connection to mean the Applicant’s characterisation of a “spline”, (noting that the description does not use the term “teeth” or “toothed” to describe the connecting parts).
The Inventive Concept
The Requestor characterised the invention by drawing from a passage on page 8 of the description describing the advantages of the invention. They conclude:
“… the inventive concept of the Applications may be characterised as providing an arrangement involving two gearboxes having inputs/outputs connected to the existing steering mechanisms of the vehicle, where the gearboxes are connected by a two-piece slidable rotating shaft the length of which can be adjusted.”[28]
[28] CNC Submissions in Chief at [23].
The Applicant found this characterisation based on the advantages section to be “peculiar and untenable”.[29] Instead, they sought to characterise the inventive concept more narrowly, in terms of the types of connections used in the device. The Applicant submitted that in their annotated description, the blue highlighted text represents the “prior art elements”, whereas the yellow highlighted text represents “the elements we developed”.[30] The yellow highlighted text at pages 3 and 4 identifies the connection types in the steering assembly device. I will provide the text from page 3 again here for convenience. The relevant text from page 4 is below it. The underlined text represents the yellow highlights.
“Preferably the shaft assembly is connected to the second output of the first gearbox via a splined connection. In another embodiment, the shaft assembly is connected to the second output of the first gearbox via a slotted connection. Preferably the shaft assembly is connected to the first input of the second gearbox via a splined connection. In another embodiment, the shaft assembly is connected to the first input of the second gearbox via a slotted connection.”[31] (underline added)
“In one embodiment, the shaft assembly includes a splined arrangement between the first portion and the second portion. Preferably the splined arrangement enables the first portion to slide relative to the second portion. Preferably the splined arrangement inhibits rotation of the first portion relative to the second portion.”[32] (underline added)
[29] SCD Submissions at [14].
[30] Orth declaration at [10].
[31] Description at page 3 lines 18-24.
[32] Description at page 4 lines 7-11.
Mr Orth went on to say in his oral submissions that, in contrast to the connection types discussed in the blue highlighted text, “…the features we have developed have that the other way around … a splined arrangement on the actual bar and a slotted arrangement coming out of the gearbox”. I understand that by the “bar” he means the “shaft”. He stated that this arrangement was described in the parts of the specification highlighted in yellow. I understand his submission to be that he characterises the inventive concept, as highlighted in yellow in Exhibit PSO-1, to involve a reversal of the “splined” (or “toothed”) and “slotted” connections described in the blue highlighted text, so that “splined” (“toothed”) connections are found between the first and second portions of the shaft, and “slotted” connections between the shaft and the gearboxes.
At the hearing, Counsel submitted that the Applicant’s characterisation of the inventive concept does not marry up with the text of the application and innovation. Even on the Applicant’s definitions, I agree with the Requestor that there is difficulty finding the Applicant’s alleged inventive concept in the yellow highlighted text of page 3 provided in Exhibit PSO-1.
Referring to the first portion of text reproduced above, the second sentence states that the shaft assembly is to be connected to the second output of the gearbox “via a slotted connection”. In the fourth sentence, the shaft assembly is connected to the first input of the second gearbox “via a slotted connection”. However, this appears inconsistent with Figure 2 above, illustrating that the input and output of the gear boxes is via “toothed” connections, which must join with a connecting part able to accept the “toothed” end.
Counsel submitted that what has been omitted here is that the connections to the gearboxes are via universal joints, as illustrated at items (30) and (32) in Figure 1 of the application and innovation illustrated previously. Figure 7 illustrates a universal joint (30). The universal joints have both a “toothed” and a “slotted” connection as indicated in the text below and illustrated in Figure 7.
“The universal joint has a slot 56 to accept section 40 of the first portion. The universal joint 30 also has a splined portion (not shown) to accept the second output 16 of the first gearbox 12.” [33]
[33] Description at page 8 lines 21-24.
As explained by the Requestor, one end of the universal joint has an aperture with the same cross-section as the shaft such that the shaft can be inserted into one end of the universal joint. The other end “features teeth which mate with the teeth of the output of the gearbox.”[34] Thus, Counsel submitted that the universal joint enables the slotted end of the shaft to join to the illustrated gearbox “via a slotted connection” by providing the slotted connection on one end and the “toothed” connection of the other that mates with the gearbox. Counsel submitted that these connections using the universal joint are part of the Requestor’s design.
[34] CNC submissions in Chief at [32].
It is possible that the yellow highlighted text at page 3 describing the connections to the input and output of the gearboxes as “via slotted arrangements” could be describing another arrangement that is not illustrated in the Figures. I appreciate that a description need not illustrate all embodiments. However, on reading the description as a whole, alongside the drawings, I cannot see that there is a clear disclosure of an arrangement where the connection of the shaft into the gearboxes is other than via the “toothed” connection illustrated in Figure 2 using the “toothed” end of the universal joint. The Applicant also has presented no evidence from a skilled person to suggest that such a person would understand something different from the description.
The yellow highlighted text on page 4 of Exhibit PSO-1, reproduced again below, is somewhat clearer.
“In one embodiment, the shaft assembly includes a splined arrangement between the first portion and the second portion. Preferably the splined arrangement enables the first portion to slide relative to the second portion. Preferably the splined arrangement inhibits rotation of the first portion relative to the second portion.” (underline added)
This text refers to a “splined” (“toothed”) arrangement between the first portion and the second portion of the shaft. However, the rest of the description only describes and illustrates a second portion having a slot which is adapted to engage with the opposed flat sides of the first portion.[35] Figure 4 illustrates flat sides 36 and 38 which “engage with flat sides of a slot of the second portion 28…”.[36] Again, I accept it is possible that this highlighted text is disclosing an alternate connection arrangement that is not illustrated. At the hearing, Mr Orth explained that there was no need to provide drawings as the alternate connection was a “very simple” change.
[35] Description at page 8 lines 8-9, 13-16.
[36] Description page 8 lines 8-9.
However, insofar as these two portions of text may be disclosing alternate connection arrangements, I consider that such arrangements could only be optional variations that are not significant to the core of the invention, and I agree with the Requestor’s submission to this effect.[37] The use of the word “preferably” in relation to the splined arrangements further suggests these are optional variations. Polwood clearly states, and SARB confirms, that the “... body of the specification describes the invention and should explain the inventive concepts involved…” As explained above, the description of the application and innovation describe the invention in terms of the two-part slidable shaft connectable to a first and second gearbox, allowing the device to accommodate different distances between gearboxes. The description does not support the assertion that switching the type of connection between the first and second shaft portions, or between the shaft and the gearbox, is significant in any way to the inventive concept. The drawings do not illustrate it, and it has not been claimed. Whilst I appreciate that the claims may be altered after examination, it would appear inconsistent to file an application for something allegedly innovative and yet not recite that feature anywhere in the original claim set. Furthermore, the fact that no drawing was considered necessary is, in my view, evidence of the minor nature of the alternate arrangement. I cannot see that the switching of connection types between the shaft and the gearboxes could be considered to a have a “material effect on the invention”. On the contrary, I can only consider this change to amount to reduction to practice rather than a contribution to the inventive concept.
[37] CNC Submissions in Chief at [42]. I understand from the Requestor’s oral submissions that the last line in this paragraph should read “not material to the inventive concept”. The word “not” has been unintentionally omitted.
Likewise, although not discussed at length at the hearing, I consider that the yellow highlighted sentences at page 5 and 7 that relate to shortening the steering column, if disclosing another possible variation to the device, would also not form a material part of the concept of the invention. I consider that such an alteration reflects a further reduction to practice.
I therefore do not consider that the small amount of somewhat ambiguous text, highlighted in yellow in Exhibit PSO-1, forms a material part of the inventive concept in the sense articulated in Polwood. Rather, I agree with the Requestor that the inventive concept is best characterised essentially as they have submitted. As per the decision in Polwood, I consider that the Requestor has properly used the specifications to identify the inventive concept. Further, their characterisation, based on the advantages section of the specifications, is consistent with the rest of the description, particularly the summary of the invention which also identifies a device comprising two gearboxes connectable to the steering wheel and column, and a slidable shaft in two portions.[38] The adjustment of the slidable portion is further explained at page 6 of the description, consistent with the statement in the advantages section regarding the ability to accommodate different distances between the connectable elements of the device.[39]
[38] Description at page 2 lines 8-21.
[39] Description at page 6 lines 1-9.
In the terms of s36(1)(c), I therefore understand that the inventive concept as described in the application – that is, the “invention disclosed in the specification filed” – is a device providing an arrangement involving two gearboxes having inputs and outputs that connect to the existing steering mechanisms of the vehicle, where the gearboxes are connected by a two-part slidable shaft, the length of which can be adjusted. Furthermore, I consider that this inventive concept is also the invention that is found in the claims of the innovation – that is, the “patent” – therefore this is also the invention I will consider for entitlement under s191A(2).
Inventorship
According to the second step of the test in UWA, I need to “determine inventorship including the person responsible for the inventive concept and the time of conception as distinct from its verification and reduction into practice.”
A significant portion of the Applicant’s submissions is that the Requestor’s entitlement claim is disqualified since the alleged contributions of Mr Young and Mr Irvine constitute prior art or secret use. The Applicant submits that it is “abundantly clear from case law” that prior art cannot be considered invention, and that “… it is clear from Section 18 that prior art cannot be considered the inventive concept…”.[40]
[40] SCD Submissions at [13], [14], [23].
At the hearing, in further support of their submission that the consideration of entitlement should include consideration of the prior art, the Applicant quoted from Patent Law in Australia by Colin Bodkin (Bodkin).[41] The cited passage suggests that in some circumstances prior might be relevant to entitlement, stating that “… matters which were, at the relevant time, clearly not new or uninventive may be taken to be excluded from any alleged invention.”
[41] Colin Bodkin, Patent Law in Australia, (Lawbook Co, 3rd ed, 2019), section [36160].
Two Patent Office decisions, referenced in the footnotes to the text, were mentioned at the hearing.
i.Re Applications by CSIRO and Gilbert (CSIRO)[42]
ii.Mining Equipment (Minquip) Pty Ltd v Mining Supplies Australia Pty Ltd (Minquip)[43]
[42] [1995] APO 16; 31 IPR 67.
[43] [1999] APO 55; 45 IPR 566.
In CSIRO, the last paragraph of the abstract states that publication, though relevant to novelty, “had no bearing on the question of entitlement”. In Minquip, the Delegate agreed that judicial decision generally supported independent determination between entitlement and novelty or inventiveness, and that novelty or inventiveness are secondary issues to that of entitlement.[44] However, based on the specific facts before him, he decided to consider matter that had clearly been made publicly available. I therefore agree with the submission made by Counsel for the Requestor at the hearing that neither CSIRO nor Minquip support any proposition that determination of novelty is necessary as a prelude to determining entitlement.
[44] Ibid at page 7.
In any case, the recent decision in SARB makes clear that “…the consideration of the requirements of patentability under s 18 of the Act, including the existence of an inventive step within the meaning of s 7(2) of the Act, is not part of the entitlement calculus”. That is, the question of entitlement is separate to, and distinct from, the question of patentability. I therefore cannot agree with the Applicant’s view that prior art must be considered as part of my consideration of entitlement. Whilst a skilled addressee’s understanding of the art may be brought to bear in order to ascertain the inventive concept, I am to determine the inventive concept from the specifications, without reference to what may or may not be found in the prior art.
I have determined that the inventive concept is an arrangement involving two gearboxes having inputs/outputs connectable to the existing steering mechanisms of the vehicle, where the gearboxes are connected by a two-part slidable shaft, the length of which can be adjusted, allowing the device to accommodate different distances between gearboxes. This concept is illustrated in Figure 1 of the specifications, with further details provided in Figures 2-7.
I agree with the Requestor that the drawings of the devices in the application and innovation have features clearly in common with the drawings that are annexed to Young 1 as TY-1 to TY-4.[45] The first and third sheets of the set of drawings making up TY-1 are provided below. More specifically, the Requestor submitted that the inventive concept is present in the CNC drawings as follows.[46] The first sheet of TY-1 illustrates two bevel boxes (gearboxes) connected to a shaft and sleeve with universal joints. The third sheet illustrates universal joints, wherein one end of the universal joint has two flat sides connected by rounded sides (known as a “DD’ shaped connection). The other end has teeth that mate with teeth on the output of the gearbox.[47] The universal joints are identified as SCD - UJBS3-4 and SCD - UJBS1 in the drawing. Figure 1 above at [22] is clearly very similar to the drawing of the first sheet of TY-1.
[45] CNC Submissions in Chief at [8].
[46] CNC Submissions in Chief at [24]-[30].
[47] CNC Submissions in Chief at [31]-[32].
Annexure TY-4 illustrates the shaft in more detail. The Requestor noted that the shaft illustrated has several tapped holes which align with the hole on the shaft sleeve. This enables the shaft length to be adjusted depending on which of the holes is used.[48] TY-4 is provided again below. Figures 3 and 4 above at [31] are clearly very similar to the “3/4 Inch DD 19DT Shaft” above, and also to the drawing in TY-4 below.
[48] CNC Submissions in Chief at [27].
The Requestor submitted that the CNC drawings were the product of the research and design work by Thomas Young and Michael Irvine on an improved steering transfer system.[49] The Requestor also submitted at the hearing that the text of the application and innovation describe the CNC drawings as provided in the annexures. The Applicant did not dispute the disclosure of the CNC drawings. I am satisfied that the inventive concept as articulated above is disclosed in the CNC drawings.
[49] CNC Submissions in Chief at [6].
The Applicant also acknowledged that the CNC drawings were supplied to the Applicant by the Requestor,[50] noting that these were not the only drawings provided. The Applicant did not directly contest whether Mr Young and Mr Irving were responsible for the drawings. Rather, the Applicant submitted that the steering transfer assembly disclosed in the CNC drawings was already part of the prior art, and therefore it is of no consequence whether or not Mr Young and Mr Irvine developed the device.[51]
[50] Orth declaration at [26]. The Applicant provided another drawing received from the Requestor as Exhibit PSO-5.
[51] SCD Submissions [2], [4].
The Requestor provided declarations from Mr Young and Mr Irving. Mr Young stated he is the director of CNC, the Requestor company, and Mr Irving stated that he was employed by CNC and instructed to design the steering transfer system as a part of his employment.[52] They further stated that they were working on the steering transfer system between 2014 and at least 20 April 2021, and that they were responsible for the designs shown in the CNC drawings.[53] The Applicant did not dispute these statements. The latest date of any of the CNC drawings is 20 April 2021.[54] Mr Young and Mr Irving both mention that the design brief included the aim of reducing backlash and noise, an aim which is not mentioned in the application and innovation. However, given the similarity in the CNC drawings and the figures of the application and innovation, I do not find this point significant.
[52] Young at [1]; Irving at [6].
[53] Young 1 at [7]-[10]; Irving at [4]-[7].
[54] See date on the drawings of annexure TY-1.
Mr Kocwa, the named inventor of the present application and innovation, has not provided a declaration as to what he invented. Further, in stating that the blue highlighted text in PSO-1 represents “prior art elements”,[55] I understand that the Applicant has conceded that Mr Kocwa was not responsible for the device features described by this text, which I have found to include the inventive concept. Mr Irving categorically stated in his declaration that Mr Kocwa was not involved in the inventive process of the steering transfer assembly.[56]
[55] Orth declaration at [10]; SCD Submissions [10].
[56] Irving at [10].
Polwood states that if the final concept of the invention would not have come about without a particular person’s involvement, then that person has entitlement to the invention. I am unable to find any evidence that Eddie Kocwa was involved in any way in developing the inventive concept, let alone that the invention would not have come about but for his involvement.
As for whether the Requestor’s entitlement is disqualified by prior art, the previously referenced SARB decision clarifies that the question of entitlement is considered without reference to the prior art. This point was also made by a Delegate of the Commissioner in his letter of 25 May 2023 declining to dismiss the opposition, where he stated:
“…the fact that there may have been prior use … is in no way necessarily determinative of entitlement matters.”[57]
[57] Letter of 25 May 2023 from IP Australia, second page, last full paragraph.
When asked about this statement at the hearing, Mr Orth stated that he agreed with this in the context of prior use, but considered the proposition would be different for secret commercial use. However, in SARB, the Court referred to “the requirements of patentability under s 18 of the Act” as not being part of the consideration of entitlement.[58] Section 18 of the Act includes secret use at subsection (1)(d). Thus, I understand from this decision that secret use is also not considered for the purposes of assessing entitlement.
[58] SARB at [104].
Therefore, I do not consider that the Applicant’s submission that the alleged invention was the subject of prior use, secret or otherwise, is relevant to this determination. Similarly, I do not consider that the Requestor has an onus to show that the steering transfer assembly was not the subject of public or secret use, as was suggested by the Applicant.[59] It is the onus of demonstrating entitlement that lies with the Requestor.
[59] SCD submissions at [8].
While I will not comment further on the Applicant’s submission, I will make brief observations on the evidence the Applicant provided to support their prior/secret use position. My observations may be of some use if the Applicant's evidence is presented a later date in any examination/re-examination of the application and innovation.
The Applicant submitted that the list attached as Exhibit PSO-2 is a list of vehicles which had steering transfer assemblies fitted by the Applicant, wherein those assemblies disclosed the features the Applicant highlighted in blue in their annotated specification.[60] For each entry in the list there is a date, vehicle identification number, and vehicle model. The list provides no indication of what was fitted, and clearly no indication of the details of any device in the vehicles that would disclose the features that make up the invention.
[60] Orth declaration at [17].
Exhibit PSO-3 is a redacted invoice for a vehicle sold in 2019 that the Applicant alleged included a steering transfer assembly that was machined by the Requestor.[61] However, the invoice has no details of what was or was not installed on the vehicle.
[61] Orth declaration at [19]-[21].
Exhibit PSO-4 is a photograph which the Applicant stated shows a steering transfer assembly machined by the Requestor, allegedly taken in 2017.[62] There is no date on the photograph itself. A metal bar is evident on the floor of the vehicle, but this does not show the features presently alleged to form the inventive concept.
[62] Orth declaration at [23].
Exhibit PSO-5 are further CNC drawings not provided in the Requestor’s evidence. However, these drawings do not show the adjustable shaft which is a fundamental part of the present inventive concept.
I accept that Mr Orth, on behalf of the Applicant, has made a statutory declaration as to what he believes these exhibits show. However, without additional documentary evidence clearly showing the elements of the inventive concept, and the dates of disclosure, I am inclined to afford little weight to the declaration on its own.
I will briefly consider here the evidence concerning Mr Kocwa’s involvement in the additional features identified by the yellow highlighted text in PSO-1. Mr Orth submitted that he did not feel it was necessary to obtain a declaration from Mr Kocwa, in view of his own statutory declaration. In that declaration, Mr Orth stated that he commenced consultations with the Applicant in early 2020, preceding July, regarding patent protection for a steering transfer assembly.[63] He then states that in collaboration with the Applicant, “we then developed features we believed were novel and involved an innovative step…”.[64] The declaration goes on to state:
“As these features were developed in consultation with Eddie Kocwa, I attributed inventorship of the novel and innovative/inventive features to him.”[65]
[63] Orth declaration at [4].
[64] Orth declaration at [7].
[65] Orth declaration at [8].
I understand that in using the pronoun “we”, Mr Orth is saying that he was also involved in developing the additional features, along with Mr Kocwa and the Applicant, even though Mr Orth is not named as an inventor. I find it somewhat surprising that in an entitlement dispute, the evidence provided by the Applicant as to the alleged inventors’ contribution, and their relationship to the Applicant, is so scant. Nevertheless, in the submissions received prior to the hearing, Mr Orth submitted that there is nothing extraordinary about a patent attorney developing new material in consultation with clients, and that it is “common practice for patent attorneys not to be named as inventors” in such cases.[66]
[66] SCD Submissions [12].
I understand the alleged “the novel innovative/inventive features” Mr Orth says he and Mr Kocwa developed are the elements shown in the yellow highlighted text previously discussed.[67] I have already determined that these features do not represent the inventive concept, but rather could only represent additional, optional variations to the device not material to the inventive concept.
[67] Orth declaration at [10].
As stated in Polwood and confirmed in UWA, if what is contributed by a putative inventor does not make a “material contribution to the invention” but is a mere reduction to practice not requiring an inventive step, then inventorship has not been demonstrated.[68] Kafataris further shows that if the contribution in question merely provided another example of the invention, it cannot be considered a “qualitative” contribution justifying inventorship. Rather, it is a verification and reduction to practice of the existing inventive concept. In my view, the elements that Mr Orth asserts he developed with Mr Kocwa amount at best to non-material contributions that represent an alternative “reduction to practice” of the device in question.
[68] UWA at [248].
It follows, therefore, that Eddie Kocwa is not an inventor. Nor could his Attorney, Mr Orth, be considered an inventor for the same reasons. On the evidence provided, I consider that Thomas Young and Michael Irving were responsible for the inventive concept, and that they are the inventors of the application and innovation.
Contractual or fiduciary relationships
Young 1 includes annexure TY-7, a draft Intellectual Property Licence between the Requestor as licensor and the Applicant as licensee. The Applicant emphasised that the agreement is not signed and was never executed.[69] The Requestor submitted at the hearing that this document, sent by the Applicants lawyers by email to the Requestor,[70] is evidence that the Applicant at that time understood that the Requestor was the owner of the intellectual property in the steering transfer system.
[69] SCD Submissions at [11].
[70] Young 1 at [11] and Annexure TY-6.
Generally, an unsigned agreement is given little weight. Moreover, contrary to the Requestor’s submissions, the document does not necessarily point to an accepted understanding of confidentiality between the parties (e.g. the document may be unsigned because one of the parties did not think there was an understanding of confidentiality). However, Mr Young stated in his evidence that the Requestor had not provided the Applicant with any authorisation to disclose the steering transfer system.[71] I note that the drawings attached to Young 1 are printed with a note on the bottom left corner which supports Mr Young’s statement. The note reads:
“NOTE: This drawing contains proprietary information owned by CNC Components Pty Ltd and is issued under a confidential relationship and may not be used, replicated or disclosed without written authorisation from CNC Components Pty Ltd.”
[71] Young 1 at [16].
The Applicant responded that only some of the drawings contained this note and provided an example of another drawing without the note as Exhibit PSO-5. The Applicant also submitted that as the drawings contained no dimensions or material types, which are crucial to enable construction of the device, they have maintained the confidentiality required of them.[72] They further return to the submission that matter that is “prior art” could not have any requirement for confidentiality.
“Concerning ‘confidential information’, we did not incorporate any such information into the Applications. All information within the Applications was either prior art, which carries no confidentiality obligation, or features that we developed…”[73]
[72] Orth declaration at [27].
[73] Orth declaration at [24].
On balance, I do not consider that the Requestor had given permission to the Applicant to use any part of the CNC drawings in patent applications. I note that the Applicant acknowledged that a level of confidentiality was required at least regarding the dimensions and materials to be used. Furthermore, I read the above note as stating expressly that all aspects of the drawings remain the property of the Requestor, with or without dimensions and materials stated. The fact that other drawings exist without this note is not relevant, as the drawings in the application and innovation are based on the drawings which do contain the note. Even the absence of such a note would not positively point to entitlement being transferred to the Applicant. Nor is the assertion that certain material in the CNC drawings was prior art relevant to the question of entitlement. On the evidence provided, I accept the Requestor’s submission that the intellectual property in the CNC drawings was owned by the Requestor.[74] I find no evidence of contractual or fiduciary relationships that operate to transfer the proprietary rights in the invention to the Applicant.
[74] CNC submissions in Chief at [6]-[7].
The decision in UWA affirms that if the employee’s invention is a product of what he or she was employed to do, and did do, it will belong to the employer unless otherwise agreed. The Requestor submitted that the “information comprising the invention was created by Thomas Young and Michael Irvine in the course of and for the purposes of their employment with CNC”.[75] The Applicant does not dispute this point. Therefore, I consider that the Requestor is entitled to have inventive matter that was the subject of Mr Young and Mr Irvine’s work assigned to them.
[75] CNC Submissions in Chief at [51].
Conclusion
The Requestor is successful. I have found that Thomas Young and Michael Irving are the inventors of both application 2021203073 and innovation patent 2021102546. As employer of the inventors, the Requestor is entitled to have the application and innovation assigned to them. Mr Kocwa is not an inventor, so the Applicant, who claims to derive entitlement to the invention from Mr Kocwa according to the Statement of Entitlement filed in respect of the innovation, is also not entitled to the invention.
I declare that the Requestor, CNC Components Pty Ltd, is the sole eligible person of patent application 2021203073 under section 36(1) of the Act and the Applicant of record is not an eligible person. I also declare that the Requestor, CNC Components Pty Ltd is the sole eligible person in respect of innovation patent 2021102546 under section 191A(2) of the Act and the Applicant of record is not an eligible person.
Regarding the declaration under s191A(2), s191A(3) requires that the Commissioner must rectify the Register accordingly. Regarding the declaration under s36(1), I draw the parties’ attention to s36(3A), and s36(4) whereby a new complete application can be made by declared persons within 3 months (see the Patents Regulations 1991, 3.8(d)). The Requestor may also wish to consider action under s113.
Costs
Costs usually follow the event. As I have found in favour of the Requestor in both application 2021203073 and innovation patent 2021102546, it would be usual to award costs in respect of both matters. However, as the evidence for both matters was the same, I will consider reducing the award of costs for items in Schedule 8 of the Regulations that are effectively “duplicated”. I will allow the parties two weeks to provide comments on this matter before I make a formal award of costs.
Cathy Douglas
Delegate of the Commissioner of Patents
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