Corrected Version Danny Lee Williams v Richwood Creek Pty Ltd

[2009] APO 12

ABSTRACTS OF DECISIONS

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Application  :          No. 2006202679 in the name of RICHWOOD CREEK PTY LTD

Title:          An Apparatus for a Vehicle

Action: Opposition thereto under S59 of the Patents Act (1990) by DANNY LEE WILLIAMS

Decision:          Issued  26 June 2009.

Abstract

The application was filed in the name of Richwood Creek Pty Ltd naming two inventors Danyl (known as Danny) Lee Williams and Andrew James Mueller as inventors.  Danny Lee Williams opposed the grant on the grounds of entitlement only.

The statement of grounds and particulars alleged:

• That the true inventors are the opponent and Mr Thomas Kreskas who is a director of Norkres Pty Ltd and that Danny Lee Williams was at the relevant time an employee of Norkres Pty Ltd
• Mr Andrew Mueller was incorrectly identified as an inventor and did not contribute in any material way to the invention
• Mr Mueller’s work involved machining and assembling of the apparatus which was paid for by Norkres Pty Ltd
• Provisional application 2005901452 and PCT/AU2006/000377 and Australian Patent 2006202679 were wrongly proceeding in the name of Richwood rather than the rightful owner, Norkres Pty Ltd
• That the invention described and claimed in the patent application was obtained from the rightful owner, Norkres Pty Ltd

The opponent sought that Mr Tom Kreskas be recorded as inventor, that Mr Andrew Mueller be struck out as an inventor and that Norkres Pty Ltd be recorded as the nominated person. However, the delegate considered that an action under S59 does not, per se, give rise to a change of nominated persons.

While the assignment to Richwood Creek Pty Ltd dated 9 November 2005 was accepted, the evidence suggested that Mr Williams was under a contract of service to Norkres Pty Ltd at the relevant time and that Mueller Engineering Pty Ltd was under a similar contract but only in relation to the build of the Hemi supercharger prototypes, not in relation to intellectual property rights.  However, the conduct of the parties as seen through the evidence of the emails points to vesting of the ownership in the Hemi supercharger to Norkres and that Kreskas and Williams seem content with this arrangement.  Therefore, given the nature of the relationship and the tasks that Williams’ was charged with, the delegate considered that it was reasonable to conclude that Williams was under a contract of service so that Williams’ rights vested under S15 to Norkres.

The statements of Richwood’s patent attorney Mr Cliff Carew are significant and highly probative of the facts stated therein.  Mr Carew, who was in a position to understand the circumstances of the parties, has listed Mr Williams and Mr Mueller as inventors in the PCT application.  The delegate considered that the evidence suggested, on the balance of probabilities, that Mr Williams and Mr Mueller are co-inventors.

The delegate considered whether there may be a demarcation line between the parties such that the rights to the Hemi engine vested with Norkres while the rights outside of this embodiment vested with Richwood by way of assignment.  While this would suggest that Williams’ residual rights were assigned to Richwood, on the balance of probabilities, the delegate considered there was insufficient evidence to show that this is the case.

Mr Carew further declared that he was not aware of any contribution by Mr Kreskas or Norkres Pty Ltd.  While Mr Williams, Mr Norris and Mr Kreskas’ declarations support Mr Kreskas as an inventor and Norkres Pty Ltd as a nominated person, the Carew declaration does not support any of these claims.  There is no evidence of Mr Kreskas’ direct contribution to the development of the invention apart from his employment of Mr Williams.  Consequently, on the balance of probabilities, the delegate found that Mr Kreskas is not an inventor. 

In relation to the devolution from Mr Kreskas to Norkres Pty Ltd the delegate found that the evidence is insufficient to demonstrate that if Mr Kreskas was an inventor S15 would be enlivened to give effect to Norkres Pty Ltd as a nominated person.

While the principles of equitable estoppel can apply, the delegate found that the case of Mr Williams being estopped from denying the assignment has not been made out.  The evidence that Norkres Pty Ltd employed Mr Williams was accepted by the delegate and consequently, Norkres Pty Ltd is entitled to be a nominated person. 

It was noted that Australian Innovation Patent 2006100925 was filed as a divisional of the current application on 30 October 2006 and was certified on 28 February 2007.  Furthermore, Australian Patent Application 2009200603 was filed on 17 February 2009 as a divisional of the current application.  This further application was filed in the name of Norkres Pty Ltd and lists Thomas Kreskas and Danyl Lee Williams as inventors.

The delegate noted that a number of patent documents were raised in the corresponding US family member US 20070169672, which is a continuation of application number PCT/AU06/000377.  While the delegate acknowledged that the respective patent laws differ between jurisdictions, the documents raised by the US examiner may be relevant in the prosecution of divisional Australian Patent Application 2009200603, should that occur.  The documents identified are as follows:

D1: US 6029637 A (PRIOR) 29 February 2000
D2: US 2963006 A (KARDE) 12 July 1957
D3: US 5085199 A (SADO) 4 February 1992

There is evidence that indicates prior use, although the evidence is far from conclusive.  This issue will need to be considered if the divisional application proceeds to acceptance.

The opposition was successful on the ground of entitlement.  Subject to an appeal, the application was refused.  No award of costs was made.

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent Application No. 2006202679 by Richwood Creek Pty Ltd and opposition thereto under S59 of the Patents Act (1990) by Danny Lee Williams

BACKGROUND

1.Patent application 2006202679 is the national phase application of WO 2006/099668 that was filed on 22 March 2006 by Richwood Creek Pty Ltd (herein after called Richwood).  The inventors of the application are stated to be Andrew James Mueller and Danyl Lee Williams.  This application claimed priority from an Australian Provisional application 2005901452 that was filed on 24 March 2005 by Danny Williams. 

2.The application entered national phase early and expedited examination was requested.  The application was advertised as accepted on 26 October 2006.  On 23 October 2006, Richwood proposed amendments under S104, which were allowed on 12 April 2007.  The inventor, Danny Lee Williams, filed a notice of opposition on 25 January 2007. 

3.The matter was set down for a hearing in Canberra on 18 February 2009.  Michael Houlihan of Houlihan² appeared by telephone on behalf of the opponent, Danny Lee Williams.  Mr Jonathon Horton, Counsel with Glendon Young of Winchester, Young + Maddern Solicitors represented the applicant.  Mr Andrew Mueller also attended.

4.It should be noted that Danyl Lee Williams and Danny Lee Williams are the same person with Danny being the name in common usage.  This matter is attested in Mr Williams’ declaration and as all parties have proceeded on that basis, I see no reason to depart from that presumption.  For the purposes of this decision I will refer to Danny Lee Williams, as this was the filed name of the opponent.

5.I also note that Australian Innovation Patent 2006100924 was filed as a divisional of the current application on 30 October 2006 and was certified on 28 February 2007.  Furthermore, I am aware that Australian patent application 2009200603 was filed on 17 February 2009 as a divisional of the current application.  This further application was filed in the name of Norkres Pty Ltd and lists Thomas Kreskas and Danyl Lee Williams as inventors.

Statement of Grounds and Particulars

6.The sole ground for the opposition was that the nominated person is not entitled to a grant of a patent for the invention.

7.The particulars alleged:

• That the true inventors are the opponent and Mr Thomas Kreskas who is a director of Norkres Pty Ltd and that Danny Williams was at the relevant time an employee of Norkres Pty Ltd
• Mr Andrew Mueller was incorrectly identified as an inventor and did not contribute in any material way to the invention
• Mr Mueller’s work involved machining and assembling of the apparatus which was paid for by Norkres Pty Ltd
• Provisional application 2005901452 and PCT/AU2006/000377 and Australian Patent 2006202679 were wrongly proceeding in the name of Richwood rather than the rightful owner, Norkres Pty Ltd
• That the invention described and claimed in the patent application was obtained from the rightful owner, Norkres Pty Ltd

Specification and Claims

8.The purpose of the invention is to provide a supercharger for an internal combustion engine.  In particular, the specification discusses the problems of having a supercharger which is connected to the inlet manifold in that it “necessarily fouls with the bonnet/hood of the vehicle.”  The specification notes that this “would not meet with design standards or be acceptable to vehicle owners.”  A preferable feature of the invention is that the bonnet or hood profile is maintained.

“Preferably the invention provides an alternative to persons and or parties wishing to supercharge an engine whilst maintaining the bonnet or hood profile, utilising the given space within the confines of the engine and or engine compartment area, for engines.”

9.The specification describes a V-engine configuration, an inverted V-engine configuration and in-line configuration.  The description discloses a large number of preferred features.

10.There are 34 claims with two being independent.  These claims are as follows:

1. An apparatus for a vehicle comprising a compressor and manifold for connection to air inlets of an engine, wherein the manifold has an entry end chamber and the compressor device is located at least partially within the chamber.

31. A vehicle comprising a compressor apparatus comprising a compressor device and manifold for connection to air inlets of an engine of the vehicle, wherein the manifold has an entry end chamber and the compressor device is located at least partially within the chamber.

11.As mentioned above, a certified innovation patent divisional application was also obtained.  The main claim is as follows:

1. An apparatus for a vehicle comprising a compressor device, a manifold and a diffuser wherein the compressor device has a compressor chamber having common walls with intake passages of the manifold and the diffuser comprises passages extending from the compressor chamber to the intake passages.

12.For the point of completeness the function of the diffuser is further described as follows:

“According to a further embodiment of the present invention the entry end chamber comprises an enlarged area diffuser, the diffuser may incorporate the chambers base as with the in valley V type configuration or as with the inverted V configuration or inline configuration may incorporate both the diffuser and the intake hood or bonnet from the throttle to the device's intake area, being top or rear. The diffuser preferably comprises passages extending from the outlet of the rotor compartment of the compressor device around part of the outer wall of the rotor compartment and the air inlet passage leading to the cylinders of the engine.”

DECISION

13.For the purposes of brevity, I will refer to Mr Danny Williams as Williams, Mr Tom Kreskas as Kreskas, Mr Andrew Mueller as Mueller, Mr Paul Alfred Norris as Norris, Mr Cliff Carew as Carew, and Mr Trevor Maurice Stott as Stott.  I will also refer to Norkres Pty Ltd as Norkres, Mueller Engineering Pty Ltd as Mueller Engineering and Elko Auto Gas Supplies Pty Ltd as Elko.

14.This decision is in relation to S59 of Patents Act (1990). S59 relevantly provides that:

The Minister or any other person may, in accordance with the regulations, oppose the grant of a standard patent on one or more of the following grounds, but on no other ground:

(a) that the nominated person is either:

(i) not entitled to a grant of a patent for the invention; or

(ii) entitled to a grant of a patent for the invention but only in conjunction with some other person;

(b) that the invention is not a patentable invention;

(c) that the specification filed in respect of the complete application does not comply with subsection 40(2) or (3).

15.S15 of the Patent Act (1990) defines the class of persons who may be granted a patent.  This section provides:

1) Subject to this Act, a patent for an invention may only be granted to a person who:

(a) is the inventor; or

(b) would, on the grant of a patent for the invention, be entitled to have the patent assigned to the person; or

(c) derives title to the invention from the inventor or a person mentioned in paragraph (b); or

(d) is the legal representative of a deceased person mentioned in paragraph (a), (b) or (c).

16.The opponent submitted that Mueller is not an inventor, that Kreskas is also an inventor and that by virtue of S15 (1) (b) Norkes would be entitled to be a nominated person and that the current nominated person Richwood is not entitled.  Richwood submitted that it is entitled under S15 (1) (c) by virtue of a notice of assignment dated 9 November 2005 and signed by the named inventors. 

17.In relation to the claims made on behalf of Norkres and Kreskas, I note that neither are parties to this action. The opponent, Williams sought in his statement of ground and particulars a refusal of the grant to the applicant but at the hearing he sought that the application should proceed in the name of Norkes with Kreskas along with Williams as named inventors. But, as the direction sought by Williams is not available to me as delegate of the Commissioner in an action under sS59, I cannot make the requested direction. I note that a request under section 32 has not been made.

18.As previously noted Australian patent application 2009200603 in the name of Norkres Pty Ltd naming Thomas Kreskas and Danyl Lee Williams as inventors was filed on 17 February 2009 as a divisional of the opposed application.  I do not believe that it is appropriate for me to comment on the merits of this application.

19.I would note that neither party had much focus on the invention as set out in the claims and nor did they have much focus on what each party including Kreskas may have contributed to the invention.

20.At the outset, Richwood conceded at the hearing that Williams was an inventor.

“As each engine design was different, so too the shape and size of the integrated supercharger needs to be vary to accommodate the engine design.  The innovative concept, the subject of the patent however remains the same.  It is that innovative concept which I [Mueller], and to a lesser extent, the Opponent invented.”

21.The arguments put forward by Richwood can be summarised as follows:

• That Williams and Mueller are co–inventors
• That Williams was under a contract for service and not a contract of service
• That Kreskas is not a co-inventor and that Elko is not a wholly owned subsidiary of Norkres
• That Williams is estopped from denying the assignment document

22.I will now go though the evidence in detail making appropriate comments as I do so.

Evidence-in-support

Mr Danny Williams

23.Williams filed a statutory declaration dated 25 October 2007 with exhibits DLW-1 to DLW-8

DLW-1: copy of email from Williams of Profuels Pty Ltd dated 12 December 2004 referring to FAT (Forced Air Technology)
DLW-2: copy of email from Andy Pawlak (a customer) dated 27 April 2005, 30 April 2005 and 10 May 2005
DLW-3: copy of email from AJ Mueller of Mueller Engineering to Williams of Profuels regarding a trip to China dated 8 July 2005 and 17 December 2005 regarding state of the business.  Email refers to “buy-in”
DLW-4: copies emails of 30 June 2005 and 1 July 2005 between Williams and Mueller
DLW-5: copy of email dated 8 October 2005 with attachment of the front cover from MPOARS Collector’s Guide that features an article on the new 426 Hemi supercharger and an email dated 29 November 2005 from Mueller to Williams
DLW-6: copy of email 3 and 4 January 2006
DLW-7: copy of email 4 January 2006
DLW-8: copy of WO 2006099668

24.Williams asserted that he is a director of Forced Air Technology (hereafter called “FAT”), Pro Fuels Pty Ltd (herein after called “Pro Fuels”) and Richwood.  Williams’ declaration in support attested to facts both before the filing date of the provisional and events that took place afterwards.  Prior to the filing of the provisional application Williams attested that he began working with Norkres in June 2004 and worked with Kreskas in particular on an integrated supercharger and manifold unit to suit a Chrysler Hemi engine which went through “various prototypes” and the engine was “essentially” completed by November 2004.  He attested that while he left the employment of Norkres on 15 December 2004 he was still contracted to remain on the “integrated unit” which began within his employment with Norkres.  Arrangements were made for the manufacture of the unit with Mueller Engineering beginning on 12 December 2004 while Williams was allegedly still under an employment contract with Norkres.  Williams stated that his role was in design and assembly and Mueller’s was in manufacturing.

“I was employed by Norkres to design, develop and bring into production superchargers.  During the course of my employment, I together with Tom Kreskas invented and developed an integrated supercharger and manifold unit to suit a Chrysler Hemi engine which we generically termed the “Hemi” or “integrated unit”.

Various prototypes were prepared by us and the integrated unit was brought to design head with relevant castings made for eventual prototype production.  This work on the HEMI was essentially completed by November 2004.”

25.Williams stated that both he and Kreskas were trying to develop an integrated supercharger kit for a specific engine, identified in the evidence as the Hemi engine.  In an email sent to Mueller (exhibit DLW-1) of 12 December 2004, it was stated that the Hemi kit was 100% owned by Elko (which from the evidence is allegedly wholly owned by Norkres).  After 12 December 2004 Williams was retained on the “integrated unit project insofar as the machining and assembly of the two prototypes superchargers” was concerned.  In December 2004 Williams travelled to Queensland and worked with Mueller at Mueller Engineering on the Hemi prototypes that was paid for by Elko.

26.Williams stated that he continued to be involved in the design and Mueller in manufacturing.  However, prior to 15 December 2004 it was “proposed that Andrew Mueller and I [Danny Williams] that we might form a joint venture which would include (1) any ongoing manufacture of the integrated unit supplying Norkres.”

27.Before travelling to the United States of America for a Motor Show Williams approached a patent attorney of Griffith Hack, a patent attorney firm based in Queensland and had a provisional specification drafted which was subsequently filed on 24 March 2005.  Williams asserted that the provisional application “was directed to and described the integrated unit that Tom Kreskas and I had invented when I was employed at Norkres.”  The provisional was filed in the name of Williams but, he stated that is for “expediency only and just as a holding position.”  Cliff Carew signed the patent request for the provisional and I note that the address given for the inventor is the same address as that of the patent applicant, Richwood.  At that time, Williams was a director of the company.

28.However, there is no evidence, for example, in the form of drawings, notes etc that would show me the details of the integrated supercharger that was allegedly invented by Kreskas and Williams prior to Williams’ contact with Carew.

29.Williams, in an email with an attachment to Carew (exhibit DLW-10) dated 11 March 2005 discussed the description of “Supercharger Integrated Inlet Manifold”.  The attachment contained some expanded notes and drawings that seem very close to that of the provisional application.  This is particularly significant and points to Williams’ involvement in the invention.

30.On return from the motor show in April 2005 it was decided to use Richwood as a basis for the production of the new supercharger kit.

31.Prior to his departure Williams stated that he and Mueller might form a “joint venture which could include (1) any ongoing manufacture of the integrated unit supplying Norkres and (2) other products upon which I had previously been working on at FAT and was interested in resurrecting or now expanding.”  The clear inference is that Mueller and Williams were forming a joint venture to manufacture the unit, which is consistent with Williams’ comment that stated that his “machinist” (a reference to Mueller) is “now a partner in the business.”

32.Although Williams’ declaration asserts that the only contribution by Mueller was manufacturing, there is no evidence in this declaration as to the respective contributions either by Williams or Kreskas.  There seem to be an assumption that the Hemi unit is the sole subject matter of the application.  This assumption appears to be shared by all parties.  The evidence of emails DLW-4 from Williams to Mueller “so Toms hemi kit” of 30 June 2005 and DLW-5 “…Tom. He owns the rights to the Hemi 426” of 29 November 2005.  In DLW-6, which contains conversations between Williams and Mueller, Williams asserted again that “THE HEMI IS HIS PROJECT” which is a clear reference to Kreskas.  In an email dated 3 January 2006 from Williams to Mueller it is sated that “I will continue to support Tom with his kit.”  Again on 12 January 2006 in an email from Williams to Mueller:

“I continually said to you what ever we do that Tom owns all the hemi rights”.

“I was employed by Tom when I developed the integrated supercharger manifold well before you and I had tried to tie it up, and if you and I played our cards right we could have had full rights to this for the rest of the market but you wanted Toms thing as well.”

33.However, even with this dispute over the rights for the hemi engine, Williams has assigned his rights to Mueller as evidenced in his comment in the DLW-6 exhibit. 

“I signed over the Australian Provisional Patent Application to Andrew Mueller via a transfer to Richwood Creek Pty Ltd Company.”

34.What is not understandable is why, given all of this difficulty Williams signed an assignment document (DLW declaration paragraph 30) given that he believed that Kreskas / Norkres were the rightful owner (DLW paragraphs 17, 18 21, 23-29) and that he believed that he was still a director of Richwood (DLW paragraph 1). 

35.Williams ends his declaration with a summary of his claims:

“…I was employed by Norkres to assist in the development of such a device and then contracted by Norkres to oversee the machining and perform the assembly of the device, the rightful owner of the Invention is Norkres.  The Invention has at all times been the property of Norkres and Mr. Thomas Kreskas should have been identified as a Co-Inventor with me.  Mr. Andrew Mueller should not be acknowledged as an Inventor on any of the Patent Applications as identified in paragraph 4 since he made no inventive contribution and his work on the project was performed under my instructions on behalf of Norkres and was paid for by Norkres.

Accordingly, the Australian Provisional Application should have been filed in the name of Norkres and should have also identified Mr. Thomas Kreskas as joint Inventor.  The assignment of the Australian Provisional Application to Richwood Creek Pty Ltd was not authorised by Norkres.  Norkres did not authorise or sanction the filing of the International Patent Application nor did it approve of the International Patent Application claiming priority from the Australian Provisional Application.  Norkres did not authorise the entry into the Australian National Phase from the International Patent Application resulting in Australian Patent Application No.2006202679 and likewise Norkres did not authorise the filing of Australian Innovation Patent No.2006100924.

All of the Patent Applications referred to in paragraph 4 should not be in the name of nor should a Patent be granted to Richwood Creek Pty Ltd, but rather they belong to and should issue to Norkres.”

36.The difficulty with Williams’ evidence is that his evidence and his actions are not congruent.  His actions with respect to the patent application that was filed 24 March 2005 and the acceptance of the resultant application that occurred on 16 October 2006 which is an elapsed period of 19 months does not seem consistent with his emails stating that the deal is totally Kreskas’.  All this goes to the weight that can be placed upon his evidence.  I note that the communications as evidenced in the emails between Williams and Mueller become terser, which seemed to be escalated by other financial dealings between Williams and Mueller.

37.In summary, Williams’ position is that Mueller is simply the manufacturer who was following the instruction of Kreskas and Williams and therefore Mueller, in their view, cannot be a co-inventor.  It is also Williams’ position that Kreskas is a co-inventor and that Norkres is entitled as his employer.

Mr Paul Alfred Norris

38.Mr Paul Alfred Norris filed a statutory declaration dated 25 September 2007 with accompanying exhibits PAN-1 to PAN-7.

PAN-1: copy of opposed Australian Patent application 2006202679
PAN-2: copy of tax file declaration for Williams signed on behalf of Norkres by Nola Kreskas dated 9 June 2004 showing Williams as a full time employee
PAN-3: copy of payroll records for Mr Danny Williams from 4 July 2004 to 15 December 2004
PAN-4: copy of PAYG for period 1 July 2004 to 15 December 2004 for Williams that was prepared by Norkres
PAN-5: copy of invoices dated 24 February 2005, 11 March 2005, 25 March 2005 and 19 July 2005 from Mueller Engineering to Elko
PAN-6: copy of provisional Australian Patent application 2005901452.
PAN-7: copy of abstract of PCT WO2006099668

39.Norris is a co-managing director of Norkres.  He attested that Kreskas was the other co-managing director.  He attested that Kreskas and Williams worked on and designed “an integrated supercharger and manifold unit” and that by the time Williams had left Norkres, “the development and design of the integrated supercharger and manifold unit had been completed.  All but the actual manufacturing of the integrated unit was required.”  There were exhibited a number of invoices from Mueller Engineering in relation to work done which point to the fact that Mueller Engineering were retained to manufacture the unit.  While Norris’ declaration supports Williams’ declaration, I again note the lack of evidence on the work itself.

Evidence-in-answer

Cliff Carew

40.Cliff Carew, patent attorney and a principal of Griffith Hack Patent Attorneys, filed a statutory declaration.  In this declaration, Carew attested that he advised and prepared the Australian Provisional application.  His association with the opponent began from about February 2005.  Subsequently, Carew filed the provisional patent specification naming Williams as inventor and applicant.  During further discussions with Williams, Carew attested that he became aware of Mueller’s involvement in the invention and filed the PCT application naming Williams and Mueller as co-inventors.  Carew also attested that during his discussion with the inventors, no mention was made of Kreskas, Norkres or Elko.  Carew also advised that his invoice was not paid by the opponent but by Mueller Engineering and that he prepared, on instructions from Mueller a patent assignment (Exhibit AJM2) which he forwarded to Mueller under a cover of a letter dated 7 November 2005. 

41.While this was a fairly brief declaration, Carew was in a position to have knowledge of the facts as provided by the applicant and opponent surrounding development of the provisional application and PCT application and his evidence is of a high probative value.  The absence of any mention of Kreskas or Norkres by the parties to their patent attorney is significant.  As previously noted, the PCT application was filed with Williams and Mueller being recorded as co-inventors whereas the provisional was filed with Williams being the sole inventor.  From this it is not clear that Mueller would have been entitled to be named as inventor of the provisional application; for it may transpire that Mueller made further improvements or modifications since the filing date of the provisional and that these improvements / modifications were sufficient to involve invention.  However, there is no evidence that this is the case and the evidence of Carew supports joint inventorship and a valid transfer of rights to Richwood.  The Carew declaration does not support the claims of Kreskas and Norkres.

Andrew James Mueller

42.Andrew James Mueller statutory declaration was accompanied with 21 exhibits, AJM1-AJM-23. 

AJM-1: copy of ASIC record for the patent applicant, Richwood
AJM-2: copy of assignment between the inventors and the applicant dated 9 November 2005
AJM-3: copy of innovation patent 2006100924
AJM-4: copy of ASIC records dated 24 February 2006
AJM-5: copies of photographs
AJM-6: copy of sketch circa December 2004
AJM-7: copy of email dated 23 October 2002 and attached paper
AJM-8: copy of email 8 July 2003 from Mueller to Williams
AJM-9: copy of email dated 19 December 2004
AJM-10: copy of affidavit filed in Supreme Court of Queensland re Grovepeak Pty Ltd, Andrew Mueller and Christeen Mueller
AJM-11: photographs
AJM-12: documents
AJM-13: documents
AJM-14: copies of emails between Mueller and Anthony Kitchener
AJM-15: copies of emails dated 26 August 2005, 1 September 2005
AJM-16: copy of ASIC search on Norkres and Elko (various identities)
AJM-17: copy of email dated 31 August 2005
AJM-18: copy of comments on draft specification
AJM-19: copy of minutes of meeting held on 7 April 2005
AJM-20: copy of email dated 9 April 2005 from Williams to Mueller
AJM-21: copy of email dated 5 January 2005 from Mueller to Elko Auto Gas Supplies
AJM-22: copy of article MOPARS Collectors guide of August 2005
AJM-23: copy of email from Mueller to Kreskas dated 21 January 2006

43.Mueller attested that Williams was a director of Richwood from 2 June 2004 to 24 February 2006 and that the assignment of the invention from the opponent to the applicant was signed 9 November 2005.  He had known Williams for about 20 years and they had been involved with the “development of superchargers for engines … for approximately the past 12 years”.

44.Mueller also stated that from about 2002, he and Williams were involved in discussions (“bouncing ideas”) about an integrated supercharger and that Mueller had produced a number of engines with integrated superchargers prior to the priority date.  In particular, Mueller referred to a V10 engine being fitted into a Mustang and they (Williams and Mueller) solved the problem by inverting the supercharger rather than having it extrude through the bonnet.  And specifically in early 2004, Williams sought advice from Mueller on a supercharger Hemi engine.  Mueller stated that he “used my idea for an integrated supercharger fitting it into the Chrysler engine to provide a solution.”

45.Mueller stated that in December 2004 he was asked to produce (i.e. manufacture) an integrated supercharger on a Hemi engine for Kreskas.  Importantly, Mueller stated that his sketch is exhibited as AJM-6 represented the “in valley” integrated supercharger that ultimately led to the resin prototype produced by Rapid Concepts.

“It was on this occasion I penned a sketch of a proposed ‘in valley’ integrated supercharger which lead to the Opponent obtaining a resin prototype prepared by…”

46.In summary, it appears that Williams and Mueller had a long association and particularly it appears that the development of integrated superchargers was discussed.  Significantly, the issue of the Hemi engine for Kreskas seems to have a gestation period to early 2004 prior to Williams’ employment with Norkres.  Mueller stated that he was presented with a manifold for a hemi engine and the usual trade modifications were made (exhibit AJM-11) and the resultant manifold was discarded because it could not perform above 3000 rpm.

47.In AJM-9, in a series of emails dated 19 December 2004, it is clear that Williams and Mueller were discussing the manifold concept and product description with regard to the “potential patent area.”  In re Grovepeak Pty Ltd (Williams was sole director) v Andrew Mueller and Christeen Mueller (AJM-10), a joint venture involving Richwood and the nessessity to purchase machinery and equipment for use in the production of supercharger kits is asserted.  While this is an affidavit relating to a separate action involving the parties it demonstrates the complexity of the relationship between the parties.

48.In AMJ-21, Mueller offered Kreskas “an exclusivity agreement pertaining to the Hemi application, a manufacturing and supply agreement and marketing terms and conditions” via email dated 5 January 2006 and in exhibit AJM-23 (dated 21 January 2006), Mueller stated that “further to our conversation Thursday this week, we feel you may have been misinformed by Danny Williams as to the true ownership and involvement with other parties over the Integrated Supercharger.” 

49.In summary, Mueller attested that he is a co-inventor and that both inventors assigned their rights to Richwood.  Mueller disputes that Kreskas is an inventor and that Norkres is entitled to be a nominated person.

Evidence-in-reply

Mr Danny Williams

50.Danny Williams filed a statutory declaration dated 30 June 2008 with exhibits DLW-9 to DLW-10.

DLW-9: copy of an email from Danny Williams to Andrew Mueller dated 27 January 2005 entitled “bore machining” wherein Andrew Mueller stated that his company did not have the “capability to machine the bores in your newly designed supercharger housing.”
DLW-10: copy of email dated 11 March 2005 from Cliff Carew of Griffith Hack with attached notes that were used in the drafting of the provisional application.
Danny Williams filed a further statutory declaration dated 26 July 2008 with exhibits DLW-9 to DLW-10.  This was simply a re-execution of 30 June 2008 declaration by an appropriate qualified person.

Mr Trevor Maurice Stott

51.Trevor Stott statutory declaration of 26 June 2008 was accompanied by exhibits TMS-1 to TMS-6.

TMS-1: copy of 3 November 2004 email from Williams setting out the scope of works required.
TMS-2: copy of 11 November 2004 purchase order from Elko stage 1.
TMS-3: copy of list of changes required to be made to the computer model prepared by Rapid Concepts.
TMS-4: copy of tax invoice to Elko for stage 2
TMS-5: copy of additional changes required by Williams of 21 December 2004.
TMS-6: copy of pages 5 and 6 and a sketch from AJM-6 exhibit.

52.Mr Trevor Maurice Stott is a co-owner of Rapid Concepts, which develops design prototypes that can be used for moulding and casting.  Stott attested that in October 2004 he was approached by the opponent and was asked to develop a model for a company called Elko or Norkres and that Kreskas was also involved.  On 3 November 2004 Williams sent an email setting out the scope of works required and on 11 November 2004 a purchase order from Elko was raised.  Rapid Concepts invoiced Elko for work done on 5 December 2004.  Additional work occurred and a second invoice dated 21 December 2004 was sent to “Tom/ Danny Williams” of Elko.  Stott attested to the fact that no instructions were received from either Andrew Mueller or Mueller Engineering.  Stott specifically commented that he had not seen the sketch of Exhibit AJM-6 to Andrew James Mueller’s declaration.  The evidence of Stott strongly suggests that work was commissioned by Williams and involved Kreskas and Elko.  While Stott declared that he had no contact with Andrew Mueller and Mueller Engineering that does not establish that the latter was not involved in the development of the integrated manifold/supercharger.  However, the declaration supports earlier declarations by the opponent that the cost of the build was borne by Elko.

Mr Thomas Kreskas

53.Mr Thomas Kreskas filed a statutory declaration dated 27 June 2008.  Kreskas is a co-managing director of Norkres and he asserted that Norkres trades under the name of Elko A and Elko P.  Kreskas attested that Williams started employment on 4 July 2004 with a view to developing and inventing superchargers and manifolds.  He stated that Williams was engaged full time until 15 December 2004 when he became a consultant / contractor for the firm.

54.I will consider the Kreskas declaration in greater detail when I discuss his claims to be an inventor.

PROVISIONAL / COMPLETE APPLICATIONS

55.As noted above, the provisional was filed on 24 March 2005 and the PCT application on 22 March 2006.  Between these periods a further embodiment was disclosed.

“Figure 5 shows a V engine configuration of an apparatus incorporating a supercharger and manifold in accordance with another embodiment of the present invention.”

56.However, there was no suggestion from either party that this held any significance.  As the provisional specification was filed on 24 March 2005 and as there has been no suggestion that the PCT application contained any further modifications, the critical date for deciding the issue of inventorship is what occurred before the filing date of 24 March 2005.

RICHWOOD CREEK PTY LTD

57.The history of the applicant is evidenced in the first statutory declaration of Mueller through extracts from Australian Securities Investment Commission (ASIC).  From the point of the current action at the filing date of the provisional application, the sole director was Williams.  By 28 October 2005, Andrew James Mueller and Christeen Maryann Mueller became directors of the company and by 24 February 2006 Williams ceased to be director of the company.  A patent assignment in relation to the provisional application was executed by Williams and Mueller and dated 9 November 2005.  Witnesses to the declaration were respectively Anne Williams and Christeen Mueller.  Consequently, the assignment document was executed before the filing date of the PCT application by which time Williams was no longer a director of Richwood.

58.Further, given that the signing of this document was under the auspices of the patent attorney, I feel that the assignment document is highly probative of the facts stated therein: that Williams assigned any IP rights he may have had or would have in the invention to Richwood.

CONTRACT FOR SERVICE-CONTRACT OF SERVICE

59.Williams asserts that Norkres is entitled to the grant of the patent because it became entitled, as the alleged true inventors, Kreskas and Williams, respectively are a director and a person under a contract of service.  The issue with Kreskas is straightforward for if he was to be determined to be an inventor then Elko / Norkres would be entitled under s15 depending upon whether Kreskas was employed by Elko or Norkres.  The issue with Williams appears to hinge on whether he was under a contract for service or under a contract of service. 

60.Richwood argued that Williams could only have been under a contact for service and therefore any IP rights did not vest with Norkres but with Williams.  The main point raised by Richwood was that Williams seems to have many “jobs” and working for a number of firms at the relevant time and so therefore could not have been working full time for Norkres. 

61.The evidence points to Williams been employed by Norkres from 4 July 2004 to 15 December 2004 (exhibit PAN-2- PAN-4).  Norris, a co director of Norkres attested that the invention was substantially completed by the time Williams left employment.  The declaration by Kreskas is similar on this point.  After the 15 December 2004, it is asserted that Williams was employed as a contractor.  While no formal details of this contract are in evidence, it receives corroboration through the declarations of Kreskas, Norris and Williams and in particular Williams stated in his first declaration that he was contracted “to oversee the machining and perform the assembly of two prototype superchargers.”

62.The evidence of PAYE summary sheet (exhibit PAN-4) established that Norkres paid Williams until 15 December 2004.  The direct inference from these records is that Williams was under a contract of service till 15 December 2004.  Norris attested that during the consultancy period that “the relevant components of the integrated unit were machined and finally assembled.” 

63.There is evidence of possible collaboration (i.e. a joint venture) occurring between Williams and Mueller on manufacturing further units.  From IP Australia’s IP Toolbox the issue of joint ventures and ownership of rights is discussed and it is pointed out the dangers of lack of formal assignments that this case may be an example thereof. [underlining mine]:

“Financing & Commercialising IP

Who owns the intellectual property
IP rights created by the various participants prior to or during their participation in the project must be automatically transferred to the entity holding the IP as soon as these rights are conceived by the respective authors by the participants or the trading equity.
Without such formal assignment to the holding company, those who develop the IP rights will personally retain certain rights rather than the IP ownership vesting in the Holding Company.  IP assignment provisions are generally linked with post-departure restraint provisions accepted by each participant.  The provisions as defined within the scope of the venture, ensure that each shareholder and/or director, on his or her departure, agrees to a period during which they will not compete with the business and will keep secret information obtained during the project.”

64.It is well established that the onus of proof lies with the opponent.  The standard of proof required is the civil standard, that is, the balance of probabilities, as set out by the Court of Appeal in Dunlop Holdings Ltd’s Application (1979) RPC 523. If, as is suggested by the evidence that Williams’ involvement dates prior to the 12 December 2004, then it seems likely that his involvement with the invention was under the auspices of Norkres and that his contribution vests therewith. It is noted that no mention of this fact to the patent attorney seems to have occurred and its omission causes some doubt to occur. It is a fact that the association of Williams and Mueller goes back a number of years and that Mueller’s discussion of the Hemi engine predates Williams’ employment with Norkres. I note the evidence of emails where the “deal” is discussed and the dispute on who hold the IP rights. None of these issues seem to have been resolved and there is very little in the way of elucidation in the current evidence before me.

65.The detail of Williams’ employment presents a difficulty.  He was employed by Norkres from 1 July 2004 to 15 December 2004 and allegedly as a consultant thereafter.  I note that there is no contract in evidence or a list of his duties but it is stated that he was employed to develop the supercharger Hemi engine.  It is asserted that Norkres employed him but this fact does not appear to have been mentioned to Williams’ patent attorney.  The reliability of Williams’ evidence and the action that he undertook seem dissonant, a fact that emerges from the emails.  On the balance of probabilities, it is reasonable to conclude that Williams was working for Norkres, in some capacity, at the relevant time.  There is no evidence that he conceived the invention after the 15 December 2004.  However, the evidence that Williams conceived the invention with Mueller prior to his employment with Norkres is not explored in the evidence and there remains, on balance, a possibility that the invention was conceived earlier in time but not put into practice till Williams joined Norkres in which case Norkres becomes a mere enabler for the invention.  However, there is insufficient evidence on this earlier collaboration.

66.My attention was drawn to Spencer Industries Pty Limited v Collins [2003] FCA 542 (4 June 2003) in which Branson J approved the statement of the delegate.

The decision of the Delegate includes the following statement of the relevant principles:

“Employers' rights in the inventions of employees are not governed by statute but by common law and equitable principles which clearly show that in the absence of any express contractual obligation there is no rule that an invention made by an employee is inevitably the property of the employer.  It is instead necessary to determine whether the employment relationship suggests that the invention concerned was made in the course of employment or, in other words, whether it is something it was the employee's job to invent.  The law applying in these situations has been summarised in Fine Industrial Commodities Ltd v Powling 71 RPC 253 as follows:

‘The law relating to the position of officers or employees who make an invention affecting the business of the company which they serve is well settled.  The principles applicable are stated in Worthington Pumping Engine Co v Moore (1902) 20 RPC 41; British Reinforced Concrete Co v Lind (1917) 34 RPC 101; and Triplex Safety Glass Co v Scorah [1938] Ch 211; 55 RPC 21. The mere existence of a contract of service does not in itself disqualify the officer or employee from taking out a patent for an invention made by him during his term of service, even though the invention may relate to subject matter germane to, and useful for, his employers in their business, and even though the employee may have made use of his employer's time and servants and materials in bringing his invention to completion, and may have allowed his employer to use the invention while he was in their employment. But all of the circumstances must be considered in each case.  It is very material to see what is the nature of the inventor's position in regard to the business, and it may be a term of his employment, apart altogether from any express covenant, that any invention or discovery made in the course of the employment of the employee in doing that which he was engaged and instructed to do during the time of his employment, and during working hours, and using the materials of his employers, should be the property of the employers and not of the employee, and that, having made a discovery or invention in the course of such work, the employee becomes a trustee for the employer of that invention or discovery, so that as a trustee he is bound to give the benefit of any such discovery or invention to his employer.’ ”'

67.The evidence of the nature of Williams’ employment is merely declaratory.  I note that apart from receiving monies from Norkres for his employment, there appear to be no documentary evidence of the purpose of Williams’ employment.  There does not appear to be any contractual arrangement in existence. 

68.The declarations of Williams, Norris and Kreskas are clear that Williams was employed to “design, develop and bring into production superchargers.”  Williams states that during his employment “an integrated supercharger and manifold unit to suit a Chrysler Hemi” was developed and invented.  Williams stated that various prototypes were produced and finally relevant casings were made.  Mueller indicated that by November/December 2004, the concept was cemented and discussions regarding protecting the intellectual property by means of a patent were started.”  Kreskas stated that the role of Williams was to “develop, design, and invent an integrated supercharger and manifold unit.”

69.There are a number of emails that seem contradictory and point to Norkres not being the beneficial owner.  For example, in an email dated 9 April 2005 from Mueller to Williams “Tom...seems to have accepted the IP is not his to be involved in.”  But email dated 14 December 2004 (exhibit AJM-12) talks about a buy in by Mueller.  In January 2005 (exhibit DLW-9), in an email from Mueller to Williams, it is stated, “we have carried out an investigation … in your newly designed supercharger housing.”  I have already referred to others, all of which suggest that there was a lack of acceptance on who owned the rights to the Hemi supercharger engine. 

70.However, the conduct of the parties as seen through the evidence of the emails points to vesting of the ownership in the Hemi supercharger to Norkres and that Kreskas and Williams seem content with this arrangement.  Therefore, given the nature of the relationship and the tasks that Williams’ was charged with, it seems reasonable to conclude that Williams was under a contract of service so that Williams’ rights vested under S15 to Norkres.

71.A further issue that arises is whether Mueller Engineering was under a contact for service or a contract of service with Norkres.  Was Mueller Engineering merely the machinist as asserted by Williams under a contact for service or was Mueller Engineering under a contract of service?  The evidence establishes that the cost of the build was born by Elko / Norkres while the cost of the IP was borne by Mueller.  This is suggestive of a deliberate strategy by the parties concerned.  While there are a number of emails discussing the “deal”, none of them are determinative of the matter.  Therefore, it remains unclear what the respective roles of the parties was intended to be.  However, the pattern of behaviour exhibited by the parties with respect to the IP suggests Richwood was left to run the IP with Norkres paying for the specific engine build.  This seems to have been the consistent trend that continued from filing to acceptance of the patent application in suit.  Accordingly, on the balance of probabilities, Muller engineering was employed under a contract for service for the build of the Hemi supercharger but on the balance of probabilities there is insufficient evidence to establish that Mueller Engineering was under the same for the IP associated with the build.

72.In summary, I believe that Williams was under a contract of service to Norkres at the relevant time and that Mueller Engineering was under a similar contract but only in relation to the build of the Hemi supercharger prototypes, not in relation to intellectual property rights.

INVENTORSHIP

73.Under section 15, a person could have direct entitlement to a patent through their own inventorship or through deriving entitlement from the inventor.

74.While the Australian Patent Office Manual of Practice and Procedure Volume 3 Oppositions, Courts Extensions & Disputes para 3.28.3 discusses entitlement and determinations under s36 (1), the principles equally apply in the present situation:

“In Upham v Commissioner of Patents [1998] AATA 853 (at paragraphs 19 and 20), the AAT discussed a number of Australian Patent Office decisions relating to inventorship including Harris v CSIRO (1993) 26 IPR 369, Costa v GR & IE Daking Pty Ltd [1994] APO 23; 29 IPR 241, CSIRO v Gilbert & Hazlewood [1995] APO 16; (1995) 31 IPR 67 and Falkenhagen et al v Polemate 1995 APO 32.  The AAT observed that a common theme from these decisions is that a person has entitlement to an invention if that person’s contribution (either solely or jointly with others) had a “material effect on the invention” and a secondary issue is whether that person’s contribution involved a key inventive step. The key authority for this approach is the US decision of Mueller Brass Co v Reading Industries 17 USPQ 361 which noted at page 372:

‘The exact parameters of what constitutes joint inventorship are quite difficult to define.  It is one of the muddiest concepts in the muddy metaphysics of the patent law.  On the one hand, it is reasonably clear that a person who has merely followed instructions of another in performing experiments is not a co-inventor of the object to which those experiments are directed.  To claim inventorship is to claim at least some role in the final conception of that which is sought to be patented.  Perhaps one need not be able to point to a specific component as one’s sole idea, but one must be able to say that without his contribution to the final conception, it would have been less – less efficient, less simple, less economical, less something of benefit.  This Court has found no case in which co-inventorship status was not deemed in some way, at least presumptively, to have beneficially affected the final concept of the claimed invention, and if such a case exists, it would be so anomalous as to warrant little attention.’

The US patent law terms of “final conception” and “final concept” which appear in Mueller Brass v Reading Industries (supra) does not mean that a co-inventor need necessarily be involved in the final form of the invention.  As noted in Monsanto Co. v Kamp 154 USPQ 259, a co-inventor’s role could occur at any stage in the development of the invention:

‘Each needs to perform but a part of the task if an invention emerges from all of the steps taken together.  It is not necessary that the entire inventive concept should occur to each of the joint inventors, or that the two should physically work together. One may take a step at one time, the other an approach at different times. One may do more of the experimental work while the other makes suggestions from time to time.  The fact that each inventors plays a different role and that the contribution of one may not be as great as that of another, does not detract from the fact that the invention is joint, if each makes some original contribution, though partial, to the final solution of the problem.’

The delegate in Primmcoy v Barry Charles Teer [2003] APO 37 (at paragraph 26) found that a person who took an initial step leading from the problem to the ultimate solution would still be an inventor even if another person was needed to finalise the invention. In coming to that conclusion, the delegate noted that this approach does not generally apply to someone who merely points out the state of the art or explains well known principles and instead:

‘The step must be one that materially contributes to the invention ultimately described and the question sometimes put is whether the invention would have occurred without the involvement of the party seeking to claim entitlement – see Harris v CSIRO [1993] APO 43; (1993) 26 IPR 469 and Costa v GR & IE Daking Pty Ltd [1994] APO 23; (1994) 29 IPR 241.’

However, inventorship cannot be reduced to a process of merely identifying the constituents of an invention and attributing each feature to an inventor.  As noted by Crennan J in JMVB Enterprises Pty Ltd v Camoflag Pty Ltd (2005) 67 IPR 68 at [132]:

‘Rights in an invention are determined by objectively assessing contributions to the invention, rather than an assessment of the inventiveness of respective contributions. If the final concept of the invention would not have come about without a person’s involvement, then that person has entitlement to the invention.  One must have regard to the invention as a whole, as well as the component parts and the relationship between the participants.’ “

75.From these references it is clear that an enquiry into entitlement amongst alleged co-inventors would require evidence of their contributions.  Referring to Falkenhagen (supra) the delegate referred to the need to establish “some role” in the final conception;

“It seems to me that to claim inventor status a person would need to establish at least some role in the final conception of that which is sought to be patented in the sense that the role contributed at least something of material benefit to the final concept of the invention.  Stated another way, was the involvement and contribution of a person essential to the invention.”

76.The delegate in Falkenhagen (supra) also indicated that when a second person is engaged for his expertise then that person is not normally regarded as an inventor.

“From the law references I mentioned earlier it seems to be the case that a second person, engaged because of that person’s expertise to construct a device or prototype based on instructions from or given the concept of a first person, is not normally regarded as an inventor of the device, and this holds true even if the second person suggests ways to aid its design or operation.  However if the second person’s suggestions give a result or advantage not contemplated by the original concept then the second person may qualify as a joint inventor of the improved device.  In this context I think the result or advantage would need to be a material one so that the resulting device is overall an improved one not merely a preferred workable embodiment of the original concept.” 

Mueller and Williams

77.As the provisional specification was filed on 24 March 2005, this becomes a crucial date for determining the respective entitlements to inventorship.  The alleged facts from the declarations appear as follows in a time line:

• Early 2004, Williams sought advice from Mueller on a supercharger Hemi- a sketch was allegedly produced (AJM-6)
• 4 July 2004 Williams starts full time work with Norkres
• 3 November 2004 to 21 December 2004 Stott of Rapid Concepts, 3D modeller involved
• 15 December 2004 Williams left Norkres as fulltime employee and commenced as a consultant
• December 2004 Williams went to Queensland to meet with Mueller
• Prior to 24 March 2005, Williams and Mueller work on the integrated supercharger
• February 2005; Williams consults patent attorney Cliff Carew
• 24 March 2005 provisional filed

78.Importantly, Mueller states that he was employed to design and construct a supercharger but that was simply a contract for service.  He stated that there was no contract relating to IP.  Given the complexity of the changes that need to be made it is not apparent that Mueller Engineering was merely applying their ordinary skill to the task.

“I admit that I performed this work on a contract for services engaged by ELKO Performance Parts.  The terms of the contract were that I would design and construct an integrated supercharger from the prototype provided for a reasonable fee.  I modified the drive, rotor configuration, bypass system, port location, adaptability to various Chrysler engines, carburettor and injected versions, port runner and plenum areas, recommending future mould changes, and advised on fundamentals of operation, tolerances and the like.  It was not a term of the contract for services that the intellectual property in the design created was to be owned by ELKO Performance Parts; rather the intellectual property gained during my work was my property until such time as I assigned it to the Applicant.”

79.These statements reflect the dispute between the parties.  Williams stated that Mueller was simply employed to design and construct an integrated supercharger (the Hemi), a statement that is not denied by Mueller.  But, more importantly, there appears to be no contract regarding the IP from such work and it is conceivable that the manufacturer made an inventive contribution to the development of the integrated supercharger.

80.I note the dispute about AJM-18 relating to proposed changes to the specification and that both parties profess authorship.  I also note that there is no evidence from their patent attorney in relation to how changes were made and proposed to the specification.  The evidence appears to be equivocal on this point.  And while I note the patent attorney had not heard of Mueller at this stage, the evidence talks of Mueller’s involvement prior to the build of the Hemi.

81.I note Mueller’s claim that he was the inventor because he had been making integrated superchargers for a number of years and that the design and manufacture of the Hemi was “just another engine specific construction applying the innovative concept referred.”  While, this suggests a gestation period for the invention of a number of years it does not help me decide what features were brought into existence prior to the priority date.  I note that Williams was involved throughout this period so that the separation of the inventors’ contributions is not apparent.  

82.While the Kreskas declaration, in general, supports Williams, I note that there is no detail of his exact contribution prior to the priority date; there is insufficient evidence on what feature etc he contributed to the resultant design of the integrated supercharger.  There is the evidence of Stott that demonstrates that something was being designed but the evidence is somewhat sketchy consisting of a few generic notes and doesn’t convey to me the details of the invention.  Mueller attested to making a sketch (exhibit AJM-6) prior to the priority date but it is not apparent that this was his contribution solely and did not arise during discussions and the date of the sketch is not reliably established.

83.Therefore the evidence prior to the priority date is vague and it is difficult to decide what contribution each party made to the invention.

84.The PCT application was filed on 22 March 2006 and so the events during this period may be significant and may throw light on the issue of inventorship. During this period there is discussion about licences, buy out investment and while these are important issues they do not shed any light on inventorship.  I have noted above that there was an additional embodiment present in the PCT application than in the provisional application.  This could have led to one of the parties becoming an inventor, if they were not already.  However there is no evidence that assists me on this aspect of the inquiry.  Therefore, there is little in the way of direct evidence before me that prior to the priority date of the application, who would be entitled to be recorded as an inventor.

85.However, there is the evidence of the assignment document signed 9 November 2005 that I am prepared to give weight.  I also believe that the statements of the applicant’s and opponent’s then patent attorney Cliff Carew becomes significant and highly probative.  Carew, who was in a position to understand the circumstances of the parties, has listed Williams and Mueller as inventors in the PCT application.  Consequently, I view the Carew declaration as highly probabative of the facts stated therein.

86.Mueller attested that there was a meeting on 7 April 2005 between Williams, Kreskas, Mueller and Norris in which “Tom offered purchase of IP, 50% placed on table (declined).”  Williams disputes these minutes and neither Kreskas nor Norris refers to them.  Without further corroborative evidence, the note itself is not sufficient evidence that shows that Mueller owns the IP.

87.In the recent case of Novogen Research Pty Ltd v G.J. Consultants Pty Ltd [2008] APO 24 (16 September 2008) at paras [36]-[37] inventorship was discussed and importantly the need to distinguish conception from verification and reduction to practice without extensive experimentation.

“Entitlement and inventorship have been considered in a number of decisions, but two timely Federal Court decisions have provided some valuable guidance for considerations such as this: University of Western Australia v Gray [2008] FCA 498 and Polwood Pty Ltd v Foxworth Pty Ltd [2008] FCAFC 9. Furthermore, a recent Patent Office decision (The Commonwealth of Australia v John Murray Charlesworth [2008] APO 16) involved an entitlement dispute where, like the present case, inventorship was not in dispute but rather whether the invention was conceived during a period covered by an agreement between the parties. Following the guidance provided by UWA v Gray, the delegate applied the following principles:

I.Identify the "inventive concept" of each relevant invention as defined by 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 if contractual or fiduciary relationships between the parties at the time of the inventorship give rise to the proprietary rights claimed by the opponent.

As noted by French J in UWA v Gray (at 1426), the inventive concept marks the boundary between invention and verification.  Thus, inventorship ends at the time of conception and is distinct from verification and reduction to practice.  He referred to the following principles as established by US appellate courts:

o   “Conception is the touchstone of inventorship, the completion of the mental part of inventions.

o   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.

o   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.

o   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.”

88.In the current case, the relationship between Williams and Mueller is such that the role or demarcation line between inventorship and reduction to practice is blurred and it would seem, on the balance of probabilities, that Mueller was involved as an inventor.  Consequently,  I believe that the evidence suggests that both Williams and Mueller are inventors.  I base this on the weight that I give to the evidence of patent attorney Carew and on the long-term relationship between Williams and Mueller and on Mueller’s involvement prior to the filing of the provisional patent application.  While Williams’ claims to be an inventor were not in dispute, I note the email (DLW-10) between Carew and Williams relating to drafting of the provisional which adds substance to his claims.

Kreskas

89.The Kreskas’ declaration supports the declaration of Stott in the involvement of himself and Elko/Norkres in the development of the integrated manifold/supercharger. 

“8. During his time with Norkres and its Elko P, Danny Williams worked with me to develop, design and invent an integrated supercharger and manifold unit.  Various prototypes were prepared in that period.  Danny Williams and I are the inventors of the integrated unit.  By the time Danny Williams left Norkres as an employee, the development and design of the common wall concept for the integrated supercharger and manifold unit had been completed.  Danny Williams recommended Mueller and his workshop Mueller Engineering based in Queensland as a machining facility.

9. Andrew Mueller and Mueller Engineering were engaged for the sole purpose of machining the integrated unit and their Tax Invoices for that work were paid for by Elko/Norkres.  Andrew Mueller and Mueller Engineering were never contracted to develop or invent the unit and there was and is no contract in existence which allowed or permitted Andrew Mueller or Mueller Engineering to retain any intellectual property gained through their paid work on the unit on behalf of Elko/Norkres.

10. Danny Williams was our point of contact with Andrew Mueller and Mueller Engineering in that all communications were to proceed via him.  When presented with a Tax Invoice, we would contact Danny Williams to ascertain whether the charges made and materials used were justified.

11. Further, whenever an issue was raised, Danny Williams would advise that because of the need to complete the machining as soon as possible because of the upcoming Motor Show in the USA in April 2005 or to then enable commencement of commercial production and sale of the unit, we had to keep Andrew Mueller on side and thus not “ruffle his feathers”.  Accordingly, based on Danny’s advice and the wish to have the task completed and finished, we simply decided to ignore for the time being any incorrect claims/statements being made by Andrew Mueller or Mueller Engineering.”

90.Kreskas attested that only he and Williams made the invention on behalf of Norkres.  The Kreskas declaration supports the other declarations that the cost of building the Hemi engine was ultimately borne by Elko. 

91.However, the devolution from Kreskas to Norkres is not sufficiently established.

92.The evidence of Mueller at exhibit AJM-16 with extracts from ASIC records establishes that Kreskas and Norris are both company directors and shareholders in the company.  However, Elko has Kreskas as director and as a shareholder along with STRELCO Nominees Pty Ltd.  According to Richwood, the devolution from Kreskas to Norkres via Elko is not established.  Therefore, the assertion by Norris that Elko was a wholly owned subsidiary of Norkres has not been established.

93.While Williams’s first declaration points to himself and Kreskas as inventors, there is insufficient evidence that points to this collaboration.  There is no evidence, for example, of conversations relating to the design of the invention from Kreskas to Williams.  While the evidence of Norris and Williams corroborates that of Kreskas being an inventor, there is insufficient evidence to show that Kreskas is an inventor.

94.On the balance of probabilities, I do not believe that Kreskas contributed to the development of the invention.  There is no evidence of his direct contribution to the development of the invention apart from his employment of Williams.  Of significance is the evidence of Carew where he stated that at no time during his time as a patent attorney for the applicant had the name of Kreskas or indeed Norkres been mentioned. 

95.Carew declared that he was not aware of any contribution by Kreskas or involvement by Elko or Norkres.  While the Williams, Norris and Kreskas’ declarations support Kreskas as an inventor and Norkres as a nominated person, the Carew declaration does not support any of these claims.  There is no evidence of Kreskas’ direct contribution to the development of the invention apart from his employment of Williams.  Consequently, I am not convinced, on the balance of probabilities, that Kreskas is an inventor.

EQUITABLE ESTOPPEL

96.Richwood submitted that there is “striking inconsistency between what the Opponent now asserts and his recent behaviour over recent years.”  The evidence of patent attorney Cliff Carew and Richwood combined with the history of the patent application establish that the provisional was filed in the name of Williams, the PCT application filed in the name of Richwood with Williams and Mueller as joint inventors.  A notice of entitlement, prepared by the patent attorney Cliff Carew, was filed 21 July 2006 and an assignment document was signed (AJM-2) dated 9 November 2005 which is about 4 months prior to the date of filing of the PCT application.  It is also noted from the records of the Patent Office that Carew was the patent attorney for the application at least up to the date of payment of an ITP (invitation to pay) for S104 amendments dated 7 January 2007.

97.The estoppel argument is that Williams should be estopped from denying the assignment and from asserting that the invention belongs to Norkres.  According to Richwood these are claims that Williams made only after the application was accepted. 

98.Williams is now asserting that the assignment document is not a valid assignment as the invention belonged to Norkres.  In my decision, I have found that Mueller is a co-inventor and therefore his assignment to Richwood is effective so Richwood becomes a nominated person.  However, it is asserted that the assignment by Williams is not valid as he was at the relevant time under employment to Norkres.  It was pressed at the hearing that equitable estoppel operates to deny the entitlement of Norkres.

99.In Exxon Chemical patents Inc v The Lubrizol Corporation [1998] APO 32 (29 May 1998), the assumption was that equitable estoppel may apply to exercise of the discretionary powers of the Commissioner of Patents. I see no reason to disturb this assumption and I will proceed on that basis. A discussion on estoppel appears in The Bell Group Ltd (in Liq) v Westpac Banking Corporation (No 9) [2008] WASC 239 (28 October 2008) at para 3539:

“The seminal description of the doctrine of promissory estoppel appears in the judgment of Brennan J in Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 387. His Honour set out six criteria that are necessary in order to establish equitable estoppel.

1.The plaintiff has assumed that a particular legal relationship then existed between the plaintiff and the defendant or has expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship.

2.The defendant has induced the plaintiff to adopt that assumption or expectation.

3.The plaintiff has acted or has abstained from acting in reliance on the assumption or expectation.

4.The defendant knew or intended him to do so.

5.The plaintiff’s action or inaction will occasion detriment if the assumption or expectation is not fulfilled.

6.The defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise”

100.Williams by his conduct allowed a patent attorney to file a PCT application in the name of Richwood, had identified only himself and Mueller as inventors and had signed an assignment to Richwood.  At no time did Williams inform his patent attorney that Kreskas or Norkres were involved.  This is highly suggestive that they were not involved.  I note that neither Kreskas nor Norkres are parties to the current opposition.  But I note that there are a number of emails between Williams and Mueller that point to Norkres as being entitled.  While, the evidence established that Mueller Engineering paid the funds for the preparation of the patent applications and the continued prosecution and Elko paid for the engine build, there is a continued dispute about the rights to the Hemi engine. 

101.It is very clear that the principles of equitable estoppel can apply but given the conduct of the parties, I am not convinced that all the elements of equitable estoppel have been made out.  In particular, it is apparent that Williams had continued to state that the ‘rights’ to the Hemi engine belong to Kreskas. Consequently, while the principles of equitable estoppel apply in this case I am of the view the case has not been made out that Williams is estopped from denying the assignment.

102.As previously noted, from the evidence filed, Williams has consistently asserted that the Hemi supercharger belongs to Norkres and this seems to be the understanding of Kreskas and Norris but not Mueller.  However, at the same time, Williams was involved in a joint venture with Mueller and assigned his rights as an inventor to Richwood.  The theme that might emerge is that the IP rights to the Hemi were to vest with Norkres while the IP rights to the applications to other vehicles were to vest with Richwood. 

103.Similar to Polwood (supra), the delegate in Novogen (supra) considered a case of joint inventorship where a delineating line between embodiments was such that each nominated person was identifiable with specific embodiments.  In the current dispute, there may be such a line between the parties such that the rights to the Hemi engine vested with Norkres while the rights outside of this embodiment vested with Richwood by way of assignment.  While this appears to make some sense of the evidence before me and would suggest that Williams’ residual rights were assigned to Richwood, I am not convinced that there was sufficient evidence to show that this is the case. 

PRIOR USE

104.While prior use is not a ground raised by the opponent, it is an issue that is apparent from the evidence.  As this issue will also be relevant to the divisional, I will make some observations on the point.

105.In his first declaration, Mueller stated that the essence of the invention is “the design of a common wall, integrating the previously separate components of rotor housing, plenum, intake and port runner into one compact component design” and that he had been designing integrated superchargers since 1998.  Mueller listed the following engine types and their approximate dates as evidence of his prior claims to inventorship:

1998      replica Mustang P51 (V12 Jaguar motor)

1999      Ford Duratic

2000      Chevrolet LS

2003      Ford V8 and V10 modular

106.Photographs and a sketch were exhibited as AJM-5.  No further discussion occurred in the declaration of what these photographs show and none had occurred at the hearing.  I consider that these statements by the inventor are highly probative and they go to the question of prior use.  I note that during the hearing, Richwood alluded to this evidence as support for Mueller being an inventor. 

107.However, there is no further evidence as to what these drawings disclose and whether they disclose the “essence” of the invention.  This is particularly problematic as neither party discussed the claims of the application.

108.Mueller further attested that in 2004 he was approached by Williams to outfit a Chrysler Hemi engine with a supercharger that did not protrude through the bonnet.  In response to this request Mueller penned an “in valley” integrated supercharger in a sketch exhibited as AJM-6.

“In or about 1998, the Opponent approached me regarding fitting a supercharger to a V10 engine being fitted to a Mustang motor vehicle and on this occasion, the problem was solved by inverting the supercharger rather than having it extrude through the bonnet of the motor vehicle as is normally the case.  In early 2004, the Opponent sought my advice-in relation to a supercharger for a Chrysler HEMI engine fitted to a Chrysler Cuda owned by Tom Kreskas.  He also did not want the supercharger extruding through the bonnet.  I used my idea for an integrated supercharger fitting it into the Chrysler engine to provide a solution.  It was on this occasion I penned a sketch of a proposed “in valley” integrated supercharger which lead to the Opponent obtaining a resin prototype prepared by Trevor Stockton [Stott] of Rapid Concepts.”

109.These comments suggest that “in valley” design formed the subject matter of the invention that the parties contributed to and that other designs may have been disclosed in the previous engine builds.  However, without further evidence on this point it is not reasonable to conclude what the disclosures were and which claims of the patent application are prima facie invalid.  However, it may be a relevant factor for the novelty of the divisional Australian Patent Application 2009200603.

NOVELTY: US Examination

110.During my considerations, I became aware of the following documents that were raised in the US examination of the equivalent family member US 20070169672 that is a continuation of application number PCT/AU06/000377.

111.While it is acknowledged that the respective patent laws differ between jurisdictions, the documents raised by the US examiner seem to me to be pertinent.  These documents are as follows:

D1: US 6029637 A (PRIOR) 29 February 2000
D2: US 2963006 A (KARDE) 12 July 1957
D3: US 5085199 A (SADO) 4 February 1992

112.These documents may be relevant to any examination of the divisional application, Australian Patent Application 2009200603, should that occur.

CONCLUSION

Inventors and nominated persons

113.While the assignment to Richwood dated 9 November 2005 is accepted, the evidence suggested that Williams was under a contract of service to Norkres at the relevant time and that Mueller Engineering was under a similar contract but only in relation to the build of the Hemi supercharger prototypes, not in relation to intellectual property rights.  However, the conduct of the parties as seen through the evidence of the emails points to vesting of the ownership in the Hemi supercharger to Norkres and that Kreskas and Williams seem content with this arrangement.  Therefore, given the nature of the relationship and the tasks that Williams’ was charged with, it is reasonable to conclude that Williams was under a contract of service so that Williams’ rights vested under S15 to Norkres.

114.The statements of Richwood’s patent attorney Carew are significant and highly probative of the facts stated therein.  Carew, who was in a position to understand the circumstances of the parties, has listed Williams and Mueller as inventors in the PCT application.  The delegate considered that the evidence suggested, on the balance of probabilities, that Williams and Mueller are co-inventors.

115.I considered whether there may be a demarcation line between the parties such that the rights to the Hemi engine vested with Norkres while the rights outside of this embodiment vested with Richwood by way of assignment.  While this would suggest that Williams’ residual rights were assigned to Richwood, on the balance of probabilities, the delegate considered there was insufficient evidence to show that this is the case.

116.This has been a very difficult case to decide, primarily due to the nature of the evidence.  I have concluded that Williams and Mueller are co-inventors that, there was insufficient evidence to show that Kreskas was also an inventor and that Williams assigned his rights to Richwood.  Norkres was entitled to be a nominated person under S15 as the entitlement rights flowed by force of contract of service from Williams.  Consequently, Richwood and Norkres are persons entitled under S15.

117.Hence, the opposition has been successful in deciding that Richwood alone is not entitled to the grant of a patent.  As was stated in Polwood Pty Ltd v Foxworth Pty Ltd [2008] FCAFC 9 (18 February 2008):

“In the United States the principle has developed that a patent to a claimed invention that is the subject of contribution from more than one person cannot be granted to one only of the contributors.  While care must be taken in applying United States law on inventorship where entitlement is determined on a ‘first to invent’ not on a ‘first to file’ basis, that principle is of general application.  This was acknowledged in Stack v Davies Shephard Pty Ltd [2001] FCA 501: (2001) 108 FCR 422 (at [21]) and is consistent with s 15 of the Act. As was said in Chisum on Patents (1978) and adopted in Stack at [24], ‘if the invention was joint, the defendant’s patent in his sole name was invalid’.  That led the Full Court in Stack to conclude at [28] that one person was not solely entitled to a patent for the joint invention of himself and another. It follows that, if Polwood and Foxworth are entitled to be recognised as joint inventors, Polwood is not entitled to registration of the patent in its sole name.”

118.As previously stated this matter is not remediable under s59. Hence, subject to an appeal, I refuse the application.

Kreskas

119.Carew further declared that he was not aware of any contribution by Kreskas or Norkres.  While Williams, Norris and Kreskas’ declarations support Kreskas as an inventor and Norkres as a nominated person, the Carew declaration does not support any of these claims.  There is no evidence of Kreskas’ direct contribution to the development of the invention apart from his employment of Williams.  Consequently, on the balance of probabilities, it was found that Kreskas is not an inventor. 

Devolution to Norkres

120.In relation to the devolution from Kreskas to Norkres it was found that the evidence is insufficient to demonstrate that if Kreskas was an inventor S15 would be enlivened to give effect to Norkres as a nominated person.

Equitable Estoppel

121.While the principles of equitable estoppel can apply, it was found that the case of Williams being estopped from denying the assignment has not been made out.  The evidence that Norkres employed Williams was accepted and consequently, Norkres is entitled to be a nominated person. 

Prior Art

122.It was noted that a number of patent documents were raised in the corresponding US family member US 20070169672, which is a continuation of application number PCT/AU06/000377.  While respective patent laws differ between jurisdictions, the documents raised by the US examiner may be relevant in the prosecution of the divisional Australian patent application 2009200603, should that occur.  The documents identified are as follows:

D1: US 6029637 A (PRIOR) 29 February 2000
D2: US 2963006 A (KARDE) 12 July 1957
D3: US 5085199 A (SADO) 4 February 1992

Prior Use

123.There is evidence that indicates prior use, although the evidence is far from conclusive.  This issue will need to be considered if the divisional application proceeds to acceptance.  

COSTS

124.Costs normally follow the event.  Both parties sought costs but Williams sought costs incidental to these proceedings and at the hearing, sought actual costs.  The power to award costs is based on section 210 and regulation 22.8.  While Williams was successful in the opposition in showing that Richwood alone is not entitled to the grant of a patent, he was not successful in the way he argued the case.  In view of this and in view of the nature of the evidence presented, I do not believe that an award of costs is appropriate in the circumstances.

G. M. Cox
Delegate of the Commissioner of Patents

26 June 2009 

Patent attorneys for the applicant: Winchester, Young + Maddern, Queensland 

Patent attorneys for the opponent  Houlihan², Melbourne