Davies Shephard Pty Ltd v Stack, George and Anor GSA Industries Pty Ltd v Stack, George and Anor

[1996] FCA 486

IN THE FEDERAL COURT OF AUSTRALIA    )
VICTORIA DISTRICT REGISTRY     )    No. VG39 of 1996
GENERAL DIVISION  )

BETWEEN:    DAVIES SHEPHARD PTY LTD

Applicant

AND:    GEORGE STACK and ANOTHER

Respondents

IN THE FEDERAL COURT OF AUSTRALIA    )
VICTORIA DISTRICT REGISTRY     )    No. VG40 of 1996
GENERAL DIVISION  )

BETWEEN:    GSA INDUSTRIES PTY LTD

Applicant

AND:    GEORGE STACK and ANOTHER

Respondents

CORAM:     Spender J
PLACE:     Brisbane
DATE: 4 June 1996

MINUTES OF ORDER

THE COURT DIRECTS THAT:

1. Matters Nos VG 39 of 1996 and VG 40 of 1996 be heard concurrently with matters Nos QG 29 of 1996 and QG 11 of 1996.

THE COURT ORDERS THAT:

1. No orders be made on the motions.

1. The costs of these motions be costs in the joint proceedings.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA    )
VICTORIA DISTRICT REGISTRY     )    No. VG39 of 1996
GENERAL DIVISION  )

BETWEEN:    DAVIES SHEPHARD PTY LTD

Applicant

AND:    GEORGE STACK and ANOTHER

Respondents

IN THE FEDERAL COURT OF AUSTRALIA    )
VICTORIA DISTRICT REGISTRY     )    No. VG40 of 1996
GENERAL DIVISION  )

BETWEEN:    GSA INDUSTRIES PTY LTD

Applicant

AND:    GEORGE STACK and ANOTHER

Respondents

CORAM:     Spender J
PLACE:     Brisbane
DATE: 4 June 1996

REASONS FOR JUDGMENT

These are proceedings which relate to a notice of appeal filed on 25 January 1996 from a decision of a Deputy Commissioner of Patents dated 5 January 1996.  George Stack, who is the first named respondent in proceedings No VG 39 of 1996 and VG 40 of 1996, filed a conditional appearance and filed a notice of motion on 25 March 1996 in each matter, asking that he be removed as a party to the appeals by GSA Industries Australia Pty Ltd and David Shephard Pty Ltd from the decision of the learned Commissioner of Patents given and made on 5 January 1996.

The essential basis, as I understand it, from the submissions of Mr Abaza, solicitor for Mr Stack, is that that decision was an interim decision and has been overtaken by a decision of the Deputy Commissioner of Patents of 27 February 1996, where the Deputy Commissioner refused to extend the term of Petty Patent 645740.  It is necessary to deal, unfortunately, with some detail of the two decisions.  The first decision of the Deputy Commissioner of Patents dated 5 January 1996 concerns the application for an extension of time of Petty Patent 645740 which is in relation to a Petty Patent for a water meter assembly, having four basic components:  a manifold, a stop valve on the inlet side, a non-return valve on the outlet side, and a measuring element.

The various claims are referred to in that decision and the Registrar then dealt with the position as to fair basis and priority dates and dealt with the question of novelty and summarised his conclusions by saying:

"In summary, the claims of the petty patent lack novelty, but would be novel if limited to my first interpretation. "

As regards inventive step, which is important, he said:

"...I find the claims limited to my first interpretation would not lack an inventive step.

That is to say, his finding on the question of obviousness was against the contentions of the informants and in favour of the applicant for an extension of the Petty Patent.

On the question of entitlement the Deputy Commissioner said:

"In my view, where there is proper cause to query the entitlement of the patentee it is incumbent upon them to provide substantiation of their entitlement to the grant of a patent.  Inability to substantiate entitlement must prima facie leave it open to find that the patentee was not entitled to be granted the patent.

In the present case, the informants asserted that the petty patent was not granted to an entitled person. "

He then referred in some detail to the evidence on the question of entitlement and referred to an indication by Mr Abaza at the hearing that Mr Abaza would like to produce further evidence in support of Mr Stack's entitlement.  He said:

"I did not resolve the issue of further evidence.  Rather I reached agreement with the parties that I would issue my decision in all other matters.  If I considered that the request for further evidence ought to be considered, both parties would be given an opportunity to be heard. "

He concluded by saying that:

"There is a serious question with regard to Mr Stack's entitlement to the patent.  I consider that I should afford Mr Stack an opportunity to further substantiate his entitlement.  In general accordance with an agreement made at the hearing, I give the following directions:... "

And then he gave directions concerning the provision of further evidence, and he made a costs order up to the date of that decision against the patentee, Mr G. Stack.

In a shorter decision of 27 February 1996, the Deputy Commissioner commenced by saying:

"In my decision dated 5 January 1996 I made certain preliminary findings in relation to whether petty patent 645740 was granted to an entitled person. "

There is no direct reference to his finding, contrary to the assertion of the informants, that the Petty Patent was not obvious.  Considering the information supplied touching the question of entitlement, the Deputy Commissioner determined or decided that:

"In my view, the further evidence of the patentee ought only be admitted if there is good reason to believe that it may establish the entitlement of Mr Stack.  On review of the evidence sought to be admitted, I am satisfied that there are a number of deficiencies in that evidence such as it does not establish a prima facie case that Mr Stack was entitled to the grant of the petty patent.  Accordingly, I refuse to admit the further evidence, on the basis that nothing will be gained in the proceedings by the admission of that evidence.

As a result of my refusing to admit that further evidence, it now remains for me to conclude the issue of entitlement that was left outstanding in my earlier decision.  For the reasons expressed in my earlier decision, I now find that petty patent 645740 was granted to a person who was not entitled to be granted the petty patent.

As I indicated in my earlier decision, I believe that this finding is not capable of being rectified by way of amendment.  Accordingly I refuse to extend the term of petty patent 645740. "

I should indicate that there was a purported assignment of the rights of Mr Stack in the patent on 16 March 1994. The present submissions on the two motions on behalf of Mr Stack allege that the appeal, so called, is incompetent because the right of appeal of the applicant is contained in s 69(8) of the Patents Act 1990 and the decision from which the applicant purports to appeal are not decisions granting an extension of the term of the Petty Patent and that the applicant cannot bring itself within s 69(7) of the Act because the earlier decision did not decide to refuse to grant an extension.

There may be force in these submissions, but it is a little bit precious when account is taken of the fact that there is in existence an appeal, No QG11, by Mr Stack from the first decision of the Deputy Commissioner of Taxation and a further proceeding, No Q29 of 1996, which is an application by GS Technology Pty Ltd from the second decision of the Deputy Commissioner of Patents.  There was an application by motion before Kiefel J in No QG11 of 1996 that Mr Stack had no right to bring that appeal.  The application to have Mr Stack's right to bring the appeal from the first decision of the Deputy Commissioner regarded as incompetent with the result that that appeal be struck out, was dismissed.

Her Honour ordered on 24 April 1996 that the application in No QG11, as well as an application for judicial review that was proposed to be filed as to the costs order made by the Deputy Commissioner of Patents on 5 January 1996, be heard together with No QG29 of 1996. 

When regard is had to the appeal in QG29 of 1996, the appeal (so-called) is in fact a re-hearing de novo of the application for an extension of time; questions of, inter alia, obviousness and entitlement are able to be litigated, as I am told, and are in issue on that "appeal".  It seems to me that there is present utility in directing that No VG39 and No VG40 be heard together with those other matters.  In large measure, that earlier decision is of historical interest only, although it has a direct relevance on the question of costs that seek to be litigated in those joined proceedings.

But it seems to me that, subject to the one question of revocation raised in those matters, it might be argued that it was not competent for Davies Shephard Pty Ltd to challenge the question of obviousness, except by appealing from the decision of the Deputy Commissioner of Patents of 5 January 1996.  I cannot help but think that there is much ado about nothing in relation to these various interlocutory applications about standing, given the nature of the ultimate questions and the nature of the "appeal" and the issues that can be canvassed on that appeal in No QG29 of 1996.

Be that as it may, it seems to me that the appropriate order in the circumstances is to decline to make any order on the motions in No VG 39 and No VG 40 of 1996, and to direct that those matters be heard concurrently with No QG 29 of 1996 and the other matters that have been ordered to be heard with that proceeding. 

I order that the costs of both motions today be the costs in the joint proceedings.

I certify that this and the  preceding six (6) pages are a true copy of the reasons for judgment herein of the Honourable Justice Spender.

Associate
  Date:     4 June 1996

Counsel for the applicants     :         Mr P McMurdo QC
instructed by                  :         Minter Ellison

Solicitor for the respondent    :         Mr A P Abaza

Date of Hearing                :         4 June 1996