Encoret Limited v Dexterity, Inc
[2001] APO 12
•14 March 2001
OFFICIAL NOTICE
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 696289 in the name of Encoret Limited
Title: APPARATUS FOR USE IN SURGERY AND A VALVE
Action: Opposition under section 59 and a request under section 32 of the Patents Act 1990 by Dexterity, Inc;
Decision: Issued .
Abstract
Basic applications filed in Ireland named Patrick Leahy and Frank Bonadio as applicants and inventors. Encoret Limited, who had assignment from Bonadio, filed a PCT application, which entered the national phase in Australia. Leahy was initially named as an inventor but was deleted under PCT Rule 92bis.1. Alan Reid was added as an inventor under PCT Rule 92bis.1. Dexterity, Inc opposed the application on the basis that the nominated person is not entitled to the grant of a patent for the invention (section 59(a)), as there was no assignment of entitlement to the invention from either Leahy or Reid to Encoret Limited.
The applicant alleged that Patrick Leahy had been named as an inventor of the Irish applications purely for financial reasons, to take advantage of tax concessions available in Ireland at the time.
Found that Patrick Leahy is jointly entitled to the invention along with Frank Bonadio, who has assigned his rights to Encoret Limited. There was insufficient evidence to determine whether or not Leahy was an inventor. However, it was found that there was at least a commercial collaboration, if not a technical collaboration, between Leahy and Bonadio. The fact that the parties had filed joint patent applications in Ireland, together with the applicant's own evidence of a "gentleman's arrangement", was clear evidence of a relationship that was of such nature that it amounted to a co-partnership in respect of developments arising from the relationship, whereby any rights to inventions from individual developments rested with the partnership rather than the individual party responsible for such inventions.
Alan Reid is not an inventor of the invention. Further, Reid has rescinded any entitlement he may have had to any rights in the invention, giving rise to an estoppel in pais.
Given these findings, Encoret alone is not entitled to the invention and the ground of opposition under section 59(a) has been made out. Costs awarded against the applicant, Encoret Limited.
Parties allowed two months to file written submissions on any proposed determination under section 32. Alternatively, the parties given an opportunity to settle the matter by the applicant amending the patent request and notice of entitlement to reflect the delegate's findings.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No. 696289 by Encoret Limited; and opposition under section 59 and a request under section 32 of the Patents Act 1990 by Dexterity, Inc
BACKGROUND
Encoret Limited (“Encoret”) filed patent application 696289 (“the opposed application”) on 6 September 1994 under the provisions of the Patent Co-operation Treaty (PCT) as application PCT/IE94/00045. The application claims priority from Irish patent applications 930649 and 930650, both filed on 6 September 1993. Irish application 930649 discloses a sleeve that can receive a surgeon’s hand during surgery. Irish application 930650 is directed to a valve for a trocar. Both Irish applications were filed jointly in the names of Patrick Leahy and Frank Bonadio. Leahy and Bonadio were also named as joint inventors in both of the Irish applications.
The opposed application also named Leahy and Bonadio as joint inventors when the application was originally filed. Encoret subsequently deleted Patrick Leahy from the records as an inventor under PCT Rule 92bis.1. Encoret then added Alan J Reid as an inventor, also under PCT Rule 92bis.1. The opposed application, in its accepted form, is concerned principally with the sleeve disclosed in Irish application 930649.
The notice of entitlement filed during prosecution of the application and accepted by the Patent Office states that Encoret have gained entitlement to the invention from Frank Bonadio by assignment dated 28 September 1994. The notice of entitlement does not mention either Leahy or Reid. The notice of entitlement also incorrectly states that Encoret is the applicant for the applications listed in the declaration under Article 8 of the PCT.
The Australian Patent Office advertised application 696289 as accepted on 3 September 1998. Dexterity Inc opposed the grant of a patent on the application. Dexterity Inc has since changed its name to Dexterity Surgical Inc. I will refer to the opponent herein as “Dexterity”. Prima facie, Dexterity is the assignee of Patrick Leahy. The sole ground of objection was that Encoret is not entitled to the grant of a patent for the invention pursuant to section 59(a) of the Patents Act 1990.
After the evidentiary stages were completed, the matter was set for hearing. I heard the parties in Canberra on 24 October 2000. Mark Horsburgh, patent attorney of Fisher Adams Kelly, Brisbane, represented Encoret at the hearing. Tony Smeeton, patent attorney of Davies Collison Cave, Sydney, represented Dexterity.
The opponent also filed a request under section 32 of the Act on 19 October 2000 for the Commissioner to determine the person who may proceed with application 696289. In the request, the opponent said the facts relied on are set out in the Statutory Declarations filed in support of the section 59 opposition. The parties agreed at the hearing that any findings on the facts relating to the section 59 opposition would also be applicable to any determination under section 32.
THE SPECIFICATION
The described invention relates to an apparatus to be used in minimal invasive surgery. The apparatus comprises a sleeve through which surgeons can insert their hand into the abdomen of a patient during laproscopic surgery and which maintains a gas tight seal with the patient's body. The broadest claim is as follows:
"Apparatus for performing hand assisted, minimally-invasive surgery comprising a sleeve (2) having an entry opening (4) at an outer end thereof and an exit opening (5) at an inner end thereof to access a patient's body, characterised in that the sleeve (2) comprises a flexible gas-impermeable material, exit gas sealing means (10) are provided for attaching to, and sealing the exit opening (5) to the patient's body to provide a gas pressure tight seal with the patient's body and entry gas sealing means (2) (sic 20) are provided for sealing the outer entry (4) to provide a gas pressure tight seal around a surgeon's or physician's arm passing therethrough to create a controlled pressurised gas environment within the sleeve (2) and patient's body cavity, whereby the apparatus is attachable to the patient's body with the exit opening adjacent ain (sic) incision in the patient's body and a surgeon's or physician's arm can be positioned in and through the sleeve (2) with the entry opening (4) substantially gas sealed therearound, so that the apparatus provides passage into the interior of the patient's body to permit the surgeon to perform a surgical procedure within the controlled gas pressurised body cavity of the patient."
OPPOSITION AND EVIDENCE
The opponent's case is summarised in its statement of grounds and particulars. Dexterity alleges that Patrick Leahy has never assigned his rights in the invention to the nominated person for the application under opposition. Dexterity also alleges that the newly listed inventor Reid has never assigned his rights to the nominated person and has never been obliged to do so. According to Dexterity, the first drawing and written description of the invention was made by Patrick Leahy around June 1993. Dexterity states that Patrick Leahy first disclosed the invention to Frank Bonadio in June 1993. Dexterity claim that Encoret is not entitled to the grant of a patent for the invention disclosed and claimed in application 696289, as the invention was derived from Patrick Leahy who is the owner or alternatively at least part owner of the invention.
Apparently actions are also proceeding between the parties in other jurisdictions, notably the High Court of Ireland and the United States Patent and Trademark Office (USPTO). Although it appears that at least some of the issues in the foreign proceedings are different to the issues involved in the present opposition, some of the documents filed in relation to those proceedings have been filed in evidence here.
Evidence in support
The evidence in support of the opposition filed by the opponent includes statutory declarations and accompanying exhibits by Berwyn M. Crook; Frederick C. Feiler, Jr., a.k.a Rick Feiler; and Anthony Richard Smeeton.
Berwyn M. Crook states that he was employed at Medical Creative Technologies, Inc (“MCT”) from July 1989 to July 1999. Crook states that he worked on the development of a hand-assisted endoscopic surgical apparatus with Patrick Leahy. A brochure of the apparatus is attached to Crook’s declaration. The brochure is by a company called Pilling Weck, who were apparently a predecessor of Dexterity. The apparatus appears to be similar to that described and claimed in the opposed application. Crook states that MCT is the owner by assignment from Leahy of his rights to the product shown in the brochure. MCT has granted exclusive rights to the product to Dexterity. Also attached to Crook’s declaration are some drawings and notes that Crook says were faxed to him by Leahy on 17 August 1994. The drawings and notes attached to the declaration are copies faxed from Perk Crook (Crook states that he is also known as “Perk”) to Henry Hanser (MCT’s US patent counsel), also on 17 August 1994. These drawings are hand-dated 1993 and according to the opponent, are the first drawings and notes of the invention described and claimed in the opposed application. According to Crook, the dates “have been temporarily redacted pending the opening of a sealed preliminary statement on file in the U.S. Patent and Trademark Office in Interference No. 104,195.”
Frederick C. Feiler states that he is acting Vice President of Dexterity. In 1995, he was Product Manager of Pilling Weck, a company engaged in the business of manufacturing surgical instruments and appliances. Attached to Feiler’s declaration is a letter to Feiler from Bonadio dated 25 January 1995. The letter states in part:
“I would respectfully advise you that I am the 50/50 joint inventor of Dexterity which is the subject of an Irish Patent application no. 930649.”
“Dexterity” appears to also be a name given to the device in the Pilling Weck brochure exhibited with the Crook declaration and in the Irish application. Bonadio goes on to say in the letter that he has assigned his rights in the invention to Encoret and that Encoret’s rights are being infringed. A copy of Irish application 930649 is also attached to the Feiler declaration.
Anthony Richard Smeeton is a patent attorney and partner with the firm Davies Collison Cave. Attached to the Smeeton declaration are a certified copy of Irish patent application 930650; a certified copy of an assignment transferring rights to United States patent application 08/300,346 from Patrick Leahy, Berwin M. Crook and Robert D. Rambo to MCT; and a copy of United States patent 5,640,977 (derived from US serial no. 300,346). The US patent appears to be for the device shown in the Piling Weck brochure exhibited with the Crook declaration, and is also similar to the device described and claimed in the opposed application.
Evidence in answer
The evidence in answer filed by the applicant includes statutory declarations and accompanying exhibits by Denis McCarthy; Martin Caldwell; and John Caldwell.
Denis McCarthy is an Irish citizen and a partner of the patent attorney firm of MacLachlan and Donaldson. McCarthy states that Bonadio instructed him to file a PCT application claiming priority from the two earlier Irish applications, which were prepared and filed by another Irish patent attorney firm. McCarthy states he was informed that Bonadio’s rights in the invention had been assigned to Encoret and the application was therefore filed in the name of Encoret naming Bonadio and Leahy as inventors. That international application is the basis of the opposed application. McCarthy states that upon “further discussions with Mr Bonadio it became clear that Mr Leahy was not an inventor but had been named as an inventor on the Irish Patent applications purely for financial reasons. Under Irish law, as it existed at the time, inventors were entitled to share in tax free royalties. For this reason, it was not uncommon for investors to be named as inventors in Ireland. I subsequently requested removal of Mr Leahy as an inventor on the International application”. McCarthy also states that the Irish patent applications were abandoned and under Irish patent law it is not possible to change inventorship of an application after it has been abandoned.
McCarthy states that he subsequently received instructions from Encoret to enter the national phase in Australia, Europe and the United States, amongst other countries. The US patent attorney conducted further analysis to ensure a correct determination of inventorship. As a result, it was decided Alan Reid had made an inventive contribution and should be named as an inventor in the US application. Reid was subsequently added as an inventor to the international application. McCarthy states that in hindsight, Reid should not have been added as inventor in Australia and Europe as the considerations for determination of inventorship vary in each country.
Exhibited to McCarthy’s declaration is a letter from Reid to Bonadio dated 4 October 1995. The letter states in part:
“I thought I made it clear from the outset that I had no interest in becoming involved with the highly speculative business of medical devices to the extent that I was not prepared to risk my own money in such ventures. I was prepared to apply my expertise as a Product Development Engineer to the development of such devices but was not willing to gamble on possible long term returns. In this regard I believed you fully understood my position. In foregoing any interest in inventorship and patents in the device known as Dexterity it was my understanding that I had no involvement in the matter of intellectual property. The fact that I may have worked with you on the original concept is of no consequence to me. Your subsequent decision to add Pat Leahy’s name, as a co-inventor, to the original patent application in order that he might benefit from the tax free aspect of patent royalties was yours, the fact that this may now be causing you difficulties is your problem, not mine. …
… In spite of what may be said about the necessity to list all the inventors for an American patent application my position has remained unchanged. I do not wish, nor have I ever wished, to be listed as an inventor of Dexterity. …
… I make no claim to intellectual property in the matter under consideration …
… In the limit of my knowledge, and having reviewed the 24 claims of PCT application number PCT/IE94/00045, I can concur that Patrick Leahy did not contribute to any of the structures defined by these claims. … To my knowledge, Patrick Leahy’s name was listed as an inventor of Dexterity in recognition of the possible benefits in the commercial exploitation of the device which would accrue from his regular participation in the lecture circuit of surgical conferences and in teaching MIT procedures and in fact that under Irish Taxation laws there are tax concessions for inventors.
Since I am not prepared to put any more time or effort into this matter you may deal with US patent applications as you see fit. I would, therefore, request that you cease correspondence with me in relation to this affair.”
Reid's request for no further correspondence apparently went unheeded, as also attached to McCarthy's declaration is another letter from Reid to Bonadio. This letter was used by Encoret to have Reid removed as an inventor from the European application. The letter is dated 8 May 1997. The letter states:
"Further to our recent correspondence and conversations, I unreservedly state the following:
1. I have never made any claim, nor do I intend to make any claim in the future to the invention which is the subject of the above mentioned patent applications made by Encoret Limited.
2. I do not want my name listed as an inventor on the above mentioned patent applications or on any publication, specification or register pertaining to such application or on any Patents granted.
3. Encoret's Patent Agents/Attorneys may use this letter in making subsequent patent applications for the invention to any other patent offices."
The "above mentioned patent applications" referred to in Reid’s letter are the US and EP applications. Reid was subsequently withdrawn as an inventor from the European patent application.
Martin Caldwell is a Director of Encoret. Exhibited with his declaration is an assignment of all rights in the invention from Bonadio to Encoret. Martin Caldwell states that Encoret instructed their patent attorneys to file applications in Australia amongst other countries. Also exhibited with Martin Caldwell’s declaration is a copy of the notice of entitlement filed in support of the opposed application. The notice is signed by Bonadio, who Martin Caldwell states was a Director of Encoret at the time.
John Caldwell is a British citizen residing on the Isle of Man. Caldwell’s statutory declaration includes three exhibits, including a copy of a declaration executed by Caldwell for filing in an interference action between Bonadio and Leahy in the USPTO Board of Patent Appeals and Interferences. In his exhibited declaration, Caldwell states that he is a solicitor specialising in business aspects of commercial law. He declares that he is a non-executive director of Medtech Limited (“Medtech”) which is an Irish development company involved in a medical device that will in the future be in competition with products based on the Bonadio/Leahy et al patents held by MCT and Encoret respectively. Caldwell is also a non-executive director of Gaya Limited (“Gaya”), an Irish patent holding company, which company has had an option over the patents and patent applications assigned to Encoret. Caldwell states that Bonadio was a director of both Medtech and Gaya until his resignation in February of 1998.
In his exhibited declaration, Caldwell sets out his knowledge of events concerning Leahy and Bonadio. Caldwell does not say if his “knowledge of events” is based entirely on his memory of what happened or is assisted by any contemporaneous documents. I note that no such documents have been exhibited as evidence. I will summarise the main points from Caldwell’s declaration.
Caldwell first met Bonadio in mid-January 1993. Bonadio and others were seeking legal advice about setting up a campus company. At a meeting on 18 January 1993, Bonadio mentioned to Caldwell that “he was talking to a Mr. Patrick Leahy in relation to minimal invasive surgery and believed he would be working with him to identify ideas from which devices could be created.” It is not clear from Caldwell’s declaration what the relevance of this was to the meeting regarding the campus company or why the issue was raised. Sometime around mid-1993 the proposal for the campus company fell through.
On 18 October 1993 Bonadio met with Caldwell to discuss a new invention that allowed a surgeon to insert his hand into the abdomen. Bonadio introduced Leahy to Caldwell at this meeting. The meeting centred on raising funding for the invention through an Irish government incentive. At this meeting, Caldwell states that “Mr. Bonadio explained the technical background of the device to me and Mr. Leahy the surgical applications.” Caldwell also states that during the meeting Mr. Leahy explained that he had the idea while carrying out laparoscopic surgery that the use of the hand in the abdomen would have greatly increased his ability to deal with a problem which arose during the procedure. He had raised the idea with Bonadio who was greatly interested. Bonadio had said at the meeting that he very quickly formulated the core structures that formed the patent application for the device and had asked Reid, a consultant design engineer, to prepare with him under contract the concept drawings. According to Caldwell, the “issue as to whether Reid was an inventor was never raised”. Caldwell also states that Bonadio “informed the meeting” that they had made the patent application jointly even though he was the sole inventor, as it gave Leahy influence over the commercialisation of the device. Caldwell includes the following footnote in his declaration:
“By way of explanation, this type of arrangement is not unknown in Ireland as the inventor of a patent often names other parties on the patent. The “inventors” can then share in patent royalties which under Irish tax law (at the time) were free of all Irish taxes."
Apparently Bonadio and Leahy had filed the Irish patent application in their own names because of the urgency of filing a patent application before a visit to the USA by Leahy. They intended to transfer the rights to a patent holding company, but this did not eventuate.
Caldwell had a further meeting with Bonadio and Leahy on 4 November 1993. Caldwell states that “At no time during any of these meetings was I ever led to believe anyone other than Mr. Bonadio was the inventor. This aspect was vitally important to me as the funding package required undisputed title to any patents.” There were then a number of meetings including one on 11 November 1993. Caldwell states that at “no time during this meeting did Mr. Leahy say Mr. Bonadio was not the inventor nor was there any dispute as to Mr. Bonadio being an equal shareholder with Mr. Leahy in the Dexterity project. Mr. Bonadio had informed me at a meeting I had with him on the 9th November 1993 that this was the “gentleman’s arrangement” between Mr. Leahy and himself.”
A dispute then broke out between Leahy and Bonadio. Caldwell alleges that Leahy wanted to downplay Bonadio’s role in the project, and there was a series of conversations and meetings between Leahy and Caldwell up to 23 November 1993. Caldwell states “Again, at no time during any of these meetings did Mr. Leahy dispute Mr. Bonadio’s inventorship.”
Caldwell attempted to resolve the dispute and called a meeting that was attended by himself, Leahy, Bonadio and Reid. Both Leahy and Bonadio asserted their inventorship. Leahy was apparently challenged by Bonadio and Reid to provide evidence of his inventorship. Leahy neither said nor produced anything at the meeting to indicate to Caldwell that he had been an inventor. Caldwell states that neither Leahy, Bonadio, nor Reid referred to any drawings prepared by Leahy. Leahy left the meeting and Bonadio “remonstrated with himself” for putting Leahy’s name on the patent application.
Bonadio then made a proposal on 1 December 1993 “in which he reasserted that Mr. Leahy had presented the idea but that he (Mr. Bonadio) had created the invention”. Leahy did not wish to move forward with the proposal.
During December and January Caldwell had several meetings separately with the parties. Leahy had sent an assignment form to Bonadio, but Bonadio had refused to sign it. Caldwell refers to a meeting between himself and Leahy at a Dublin hotel:
“Mr. Leahy asked me what I thought was needed to show that Mr. Bonadio was not the inventor. I told him I had no patent expertise but I assumed drawings of the invention independently witnessed which pre-dated those of Mr. Bonadio would be needed.
He did not respond to me by saying he had any such drawings or documents. Indeed, it was my clear impression that he did not have any such drawings or documents.”
Caldwell was contacted by Bonadio in early 1995 and told Leahy had made a number of patent applications in his own name wherein he claimed to be the sole inventor and omitted details of the Irish applications. Bonadio started proceedings against Leahy and MCT, who had licensed the rights from Leahy. During these proceedings, MCT supplied Bonadio with drawings allegedly made by Leahy on 1 June 1993 which claim to be the first drawings of the device. Caldwell states:
“I can say without hesitation that at no time during the numerous meetings I had with Mr. Bonadio and Mr. Leahy, whether together or separately, did I ever see the “Leahy” drawings of the 1st June or hear of their existence.”
Evidence in reply
The evidence in reply filed by the opponent includes a further statutory declaration by Berwyn M. Crook, together with accompanying exhibits. The evidence in reply also includes certified copies of certain documents filed in relation to the interference action before the USPTO.
Appended to Crook's declaration are drawings and notes that Crook attributes to Leahy. These include some drawings dated June 1st 1993 (a date redacted version of which was attached to Crook's earlier declaration) and three pages of hand-written notes hand dated June 1st 1993, June 21st 1993 and July 13 1993. The page of drawings bears a signature in the name of Patrick Leahy and is witnessed in the name of Michelle Scally. The other notes are unsigned. Crook states that the notes are in Leahy's handwriting.
Crook states that he believes the drawings show the "idea" that Leahy presented to Bonadio. Crook also states that Leahy's "idea" is summarised in the unsigned document dated June 1st 1993, which includes some notes and small sketches about advanced endoscopic surgery. The page dated June 21st 1993 refers to a meeting with Frank Bonadio and Alan Reed (sic Reid). The note says "Discuss ways to put hand in abdomen - drawings". The page dated July 13 1993 refers to a meeting "to discuss patent application for Hand access port & trocar".
MAIN SUBMISSIONS
The opponent submitted that Patrick F. Leahy is the sole inventor of at least some of the claims of the opposed patent application. The opponent placed considerable emphasis on the drawings and notes by Leahy, which the opponent said disclosed or inferred all the structural features defined in at least claims 1, 2, 3, 4, 7, 8, and 16. The date of 1 June 1993 on the drawings pre-dates all other disclosures of the invention referred to in evidence.
The opponent also referred me to the two Irish patent applications from which the present application claims priority. These applications list Leahy and Bonadio as applicants and inventors. These documents include substantially all the subject matter of the opposed application. The opponent submitted that at the very least Leahy must be considered a joint inventor.
The opponent also referred to the Feiler declaration. This includes as an exhibit a letter signed by Bonadio wherein he acknowledges he is a joint inventor. The opponent submitted that apart from the Leahy drawings, this was the only direct evidence by either of the original applicant/inventors of the Irish applications.
In relation to the evidence in answer, the opponent submitted that McCarthy relied on information provided to him by Bonadio in arriving at his conclusion that Leahy was not an inventor. The opponent submitted that it is quite apparent that Leahy and Bonadio were in dispute at this stage. The opponent also said that there was no opportunity for Leahy or any other third party to contest the amendment to delete Leahy as an inventor, as the amendment was done under the rules of the PCT.
In relation to the declaration by John Caldwell, the opponent said the purpose of this declaration appears to have been to provide a suggestion that Leahy only produced the drawings as a result of discussions between Caldwell and Leahy. The opponent contested that it was not proper to draw this inference. The opponent further said that Caldwell had a vested interest, and that, on the balance of probabilities, the drawings were done by Leahy and on the date given. The opponent also said that there would have been no reason to show or discuss the drawings with Caldwell. The fact that only the CAD drawings had been shown to Caldwell was consistent with the fact that Caldwell had been approached by the parties to obtain funding and investors for the invention. Additionally, the opponent said that Caldwell ventures his opinion as to what requires inventorship even though he has no expertise in the area of Patent Law.
The applicant said that the available evidence must be assessed to determine if, on the balance of probabilities, it provides clear and compelling reasons to overturn the entitlement of Encoret to be granted the patent. According to the applicant, the relevant events occurred between January and December 1993. The only evidence that relates directly to that time is the declaration by John Caldwell. All other evidence relates to events after the fact.
The applicant submitted that Leahy may have stated the problem, although there is insufficient evidence to determine this with certainty, but Bonadio invented the surgical device and engaged Reid to assist in developing the invention into a working device. The applicant said that Leahy was named on the Irish patent applications for financial reasons to take advantage of tax laws as they existed at the time. The applicant argued that this is not conclusive of inventorship under Australian law.
The applicant said that Caldwell's first meeting with Leahy was in October 1993. At this meeting, Caldwell states that Bonadio explained the technical details of the device and Leahy explained the surgical applications. The applicant stated that this scenario is consistent with Leahy stating the problem and Bonadio providing the solution. Caldwell repeatedly addressed the issue of inventorship in his declaration, and states that at no time was he ever led to believe anyone other than Bonadio was the inventor. According to the applicant, Caldwell never saw nor heard mention of any contribution by Leahy that could be construed as making a material contribution to the invention.
In relation to the Leahy drawings, the applicant said that the Caldwell declaration states that Leahy asked Caldwell what would be needed to show that Bonadio was not the inventor. Caldwell mentioned drawings, but Leahy did not offer that he had such drawings. The applicant also pointed out that there was no declaration from the witness Michelle Scally, or even any reference as to who she is. While the applicant stopped short of saying the drawings were a fabrication, they did say that from the available evidence a clear and compelling conclusion could not be drawn.
The applicant further submitted that all that could be established from the Crook declarations is that some pages of notes and drawings were faxed to Crook on 17 August 1994. The applicant submitted that the evidence does not establish that the drawings were made on 1 June 1993, nor that they were made by Patrick Leahy. The applicant also sought to cast doubt on what was actually disclosed by the drawings. The applicant submitted that, on the balance of probabilities, little weight could be placed on the drawings.
In relation to Reid, the applicant submitted that Reid denies inventorship and this must carry considerable weight. The applicant said that Caldwell attests to Reid's position when he reports that Reid assisted Bonadio as a contract design engineer.
RELEVANT LAW
The sole ground of objection to the grant of a patent on the application was under section 59(a) of the Patents Act 1990. That is, that the nominated person is not entitled to a grant of a patent for the invention.
Section 15 of the Act sets out who may be granted a patent in the following terms:
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).
A patent may be granted to a person whether or not he or she is an Australian citizen.
The issue of entitlement has been dealt with in a number of Patent Office decisions, particularly those dealing with sections 32 and 36 of the Act. A summary of the facts and principles derived from these decisions is set out in Row Weeder v Nielsen 39 IPR 400. Section 15 was also considered by the AAT in Upham v Commissioner of Patents AAT No 13418 [1998] AATA 852 (3 November 1998). In that decision, Mr McMahon also gained guidance from the Patent Office decisions and stated:
"Section 15 sets out the categories of persons who may be granted a patent. It makes a distinction between the inventor in paragraph (a) and a person who would be entitled to have the patent assigned under paragraph (b). Some of the relevant decisions deal with the test relevant to paragraph (a), while others deal with the question of entitlement. Although obviously there is a distinction to be made between the two concepts, the observations made in relation to invention or entitlement can be mutually illuminating."
I was also directed to the decision of a delegate of the Commissioner in Vrubel and Another v Upham 40 IPR 331, where the delegate stated:
"In matters such as this, the onus rests on the party making the request to provide clear and compelling grounds and reasons which support the claim. To conclude that there should be some change in the inventor or applicant status for this application I agree … that there needs to be clear evidence and justification.
Also, in deciding a matter such as this, the Commissioner is entitled to act on any material which is “logically probative” of the issues under decision. In reaching a conclusion on any issue, the standard of proof required is the civil standard of proof on the balance of probabilities: see, eg Re Dunlop Holdings Ltd’s Application [1979] RPC 523. In the present matter I must consider the evidence and decide the issues mindful of these general parameters."
Although this decision was subject to an appeal to the AAT, these principles regarding onus and standard of proof hold true.
DECISION
Neither party to this opposition has filed declarations by any of the main characters involved in the allegations, namely Leahy, Bonadio, or Reid. Nor is there any evidence by Michelle Scally, who allegedly witnessed Leahy's drawings. The representatives of the parties were not able to give any convincing reasons for this, other than that they were probably sick and tired of the whole affair. From the documents filed in evidence, this certainly appears to be true in the case of Reid. It also appears from the evidence that a number of reports from various people on the development of the invention have been prepared at various times, but have not been filed in evidence in the current opposition. Most of the evidence that has been filed is either hearsay or relates to events after the fact. While the Commissioner may consider any evidence that is probative, such evidence is clearly of less value than direct evidence.
Much of the opponent’s case in establishing Patrick Leahy as an inventor relied on the four pages of drawings and notes attributed to Leahy and dated 1 June 1993, 1 June 1993, 21 June 1993 and 13 July 1993 respectively. I will refer to these collectively as the Leahy drawings, for convenience. The applicant’s attack on the Leahy drawings was threefold. Namely, that the opponent had not established to the required standard of proof that: (1) the drawings disclosed the invention; (2) that the drawings were done by Leahy; and (3) that the drawings were done on the dates indicated. I will deal with each of these issues in turn.
The only declarant to give evidence as to what is disclosed in the drawings is Crook. Crook states that the drawings show "a small scale sketch identified as "Surgeon's Hand" that depicts a hand and forearm surrounded by a sleeve with a leftward-opening lateral outlet placed against a convex line depicting a distended abdomen. The small arrow is intended to show the direction of hand movement through a wound in the abdomen to which the sleeve is affixed" and that "on the line above the "Surgeon's Hand" sketch, Patrick Leahy outlines a mode by which the sleeve is to be attached to the abdomen. He writes "Colostomy Bag Attachment - Karey's Gum" - Ø site - [illegible]". (The "illegible" part appears to me to be "or paste".) Crook states that the drawings also show a two hand version with mitral valves. If Crook’s interpretation of the drawings is to be accepted, then the drawings disclose at least the broad concept of the invention.
At the hearing, Mr Horsburgh attempted to cast doubts on Crook’s interpretation of the drawings and also suggested that many features of the claims were not disclosed. The Leahy drawings, or at least the main page of drawings, were filed in evidence in support. The applicant has had ample opportunity to file expert evidence commenting on the disclosure in the drawings, but has not done so. The factors involved in considering uncorroborated and uncontradicted evidence were discussed in Impact Post Anchors Pty Ltd v Cedarbourne Pty Ltd [1998] APO 71 (22 December 1998), with reference to Glenwood Systems Pty Ltd v Gooden (1993) AIPC 90-985. Although Crook is not an independent witness, his interpretation of the drawings seems perfectly reasonable to me. There is no evidence that contradicts Crook’s interpretation of the drawings. I am satisfied that the Leahy drawings disclose at least the general concept of the invention, though perhaps lacking some of the detail defined in the claims.
Mr Horsburgh also argued that there was insufficient evidence to establish that Leahy did the drawings. Mr Smeeton pointed to an assignment from Leahy to Dexterity filed in evidence, arguing that the signature was the same in each case. Crook also states that the drawings and notes are in Leahy’s handwriting. I am satisfied that, on the balance of probabilities, the drawings were done by Leahy.
The third, and most significant, point relates to the date of the drawings. The first drawings are dated 1 June 1993. If this date is correct, the drawings would appear to be the first disclosure of at least the broad concept of the invention, though Caldwell states Leahy and Bonadio had been working together “to identify ideas” from at least January 1993.
Caldwell states in several places in his declaration that he was not aware of any drawings by Leahy. Caldwell also states that he had told Leahy, after the dispute between the parties had commenced, that independently witnessed drawings of the invention would be needed to show inventorship. Additionally, Caldwell says Reid told him, also after commencement of the dispute, that Reid and Bonadio discussed and worked on the idea presented by Leahy but were not shown any drawings. Caldwell gives a clear inference from the general tenor of his declaration that the drawings are a fabrication.
Caldwell states throughout his declaration that Leahy had the “idea”. At one point Caldwell states that Leahy “had the idea that the use of the hand in the abdomen would have greatly increased his ability to deal with a problem which arose during laparoscopic surgery”. Although Caldwell mentions Leahy’s idea a number of times, he does not elaborate any further on the extent of the “idea”.
In reply, Crook states that he met Patrick Leahy personally, and he believes the “idea” he presented to Bonadio was of a device for enabling a surgeon to place his hand in a patient’s abdomen while the abdomen is distended under conditions of pneumoperitoneum (i.e. internal pressurization). Crook believes the drawings summarise the “idea” that Leahy presented to Bonadio.
However, the first time Crook saw the drawings was on 17 August 1994. He is not in a position to confirm that the drawings were actually sketched on the date indicated. There is no evidence of any weight that the drawings were done on the date hand-written on them or that they were communicated to Bonadio at any time. Caldwell states that Bonadio and Leahy were in communication about the idea from at least January 1993. There is no evidence from either party as to what, if anything, had been discussed between January and June of 1993. Mr Smeeton argued that Caldwell’s role was to obtain finance for the venture. As such, there would have been no reason to show him hand-drawn sketches from a notebook when CAD drawings were available by the time the parties met with him. This is a persuasive argument. There is no obvious reason why Caldwell would have been shown these rough concept sketches. However, the onus of proof lies with the opponent. There is insufficient evidence to find that the drawings were done on the date indicated, that they were communicated to Bonadio by Leahy, or even whether or not they were Leahy’s original idea or the result of discussions between Leahy and Bonadio. The drawings are insufficient, on the available evidence, to support Leahy’s claim to inventorship.
If the opponent had filed sufficient evidence to establish the date of the drawings and the disclosure communicated to Bonadio, the facts would have fallen neatly into line with the facts in Costa v Daking 29 IPR 241, at least as far as inventorship goes. That is, while Leahy had the general idea of what was required to solve the problem, he did not necessarily know how to give effect to those ideas, the creation of the invention required the input of Bonadio. However, as I have said, there is insufficient evidence to come to this conclusion on the basis of the Leahy drawings.
However, the drawings are only one aspect of the inventorship issue, which in turn is only one aspect of entitlement. There are several other issues to consider. According to Caldwell, Bonadio had been talking to Leahy and “believed he would be working with him to identify ideas” from at least mid-January 1993. At his first meeting with Bonadio and Leahy in October 1993, Bonadio discussed the technical background and Leahy discussed the surgical applications of the device. Bonadio and Leahy informed the meeting that they had made patent applications in their joint names but intended to transfer rights to a patent holding company, in which Leahy had an interest. Apparently, Leahy and Bonadio had agreed at a number of meetings that transfer of the rights to a holding company needed to occur, but this never eventuated before the parties fell into dispute. During meetings in November, Caldwell states that there was no dispute as to Bonadio being an equal shareholder with Leahy in the project. Bonadio had informed Caldwell that this was the “gentleman’s agreement” between Bonadio and Leahy. Apparently there was never any written agreement between the two.
Caldwell states that at no time prior to the dispute between the parties was he ever lead to believe that anyone apart from Bonadio was the inventor. He comments that this was “vitally important” to him as funding of the invention required undisputed title to any patents. These comments seem curious, given that Caldwell was fully aware and was apparently unconcerned that Leahy had been named as an applicant and as an inventor in the Irish applications. Caldwell states consistently throughout his declaration that Leahy created the idea and in at least one place he states that Bonadio “had taken the concept and created the invention and the resultant device.” As I have stated above, Caldwell does not elaborate on the extent of the "idea" or "concept".
The opponent referred to the two Irish applications that list Leahy and Bonadio as applicants and inventors. The opponent submitted that at the very least Leahy must be considered a joint inventor. The applicant's argument was that Leahy was added as an inventor only for financial reasons. According to the applicant's declarants and comments attributed to various people in documents filed in evidence, under Irish law, as it existed at the time, inventors were entitled to share in tax-free royalties. For this reason, it was not uncommon for investors to be named as inventors in Ireland. Caldwell also states that it gave Leahy influence over the commercialisation of the device.
Caldwell's repeated assertions that Leahy contributed the idea or concept provide prima facie basis for the opponent's claim that Leahy at least collaborated with Bonadio on the invention. It appears from the evidence that Leahy at least identified the problem to be solved. This points to a possible technical collaboration between Leahy and Bonadio. However, there is no evidence from Leahy, Bonadio or Reid to determine with any certainty who contributed what to the invention. Apart from the Leahy drawings and the fact that Leahy is named as inventor on the Irish applications, there is no other evidence to say what the actual idea or concept contributed by Leahy was.
In the present case, there is insufficient evidence to determine whether or not Patrick Leahy is an inventor. There is no evidence from either Leahy or Bonadio as to the respective contributions of the parties. However, it is necessary to examine the relationship between the participants to determine if there was a collaboration of any sort.
What is clear is that at the time of making the Irish applications Leahy and Bonadio knowingly and willingly filed the Irish applications in their joint names. This is supported by the Caldwell declaration. Caldwell states that there was a "gentleman's arrangement" between Leahy and Bonadio and, at least up to early November 1993, there was no dispute "as to Mr. Bonadio being an equal shareholder with Mr. Leahy". Caldwell repeatedly says that it was always the intention of both parties to transfer the rights to a holding company in which Leahy had an interest.
Although the facts in Re Applications by Commonwealth Scientific and Industrial Research Organisation and Gilbert and Others 31 IPR 67 were quite different to the present situation, the following comments by the delegate of the Commissioner in that matter are appropriate:
"… However, when looking at entitlement to an invention, one must have regard to the “invention” as a whole as well as the component parts, and the relationship between the participants. And in the present case the fact that the parties were in a collaboration is a major consideration - more important than the issue of who invented what in the component parts of the invention.
The terms of the collaboration were never put in writing. But this is not a reason to deny its existence; the correspondence between the parties clearly recognises a real and ongoing collaboration. Dr Emmerson sought to distinguish a “scientific” collaboration from a “commercial” collaboration. I think that is an artificial distinction absent a clear indication that such a distinction was present in the minds of the collaborators. Indeed, it seems to me irreconcilable that a person could have a right to recognition as a joint author of collaborative research paper, yet have no entitlement to any proprietary rights to commercial matters that arise from the paper.
As to the scope of the collaboration, the Macquarie Dictionary defines “collaborate” as:
“1. to work, one with another; cooperate, as in litrary work. 2. to cooperate treacherously.” (I ignore this second meaning here.)Roget’s Thesaurus gives as synonyms:
“alliance, colleagueship, joint-stock, co-partnership, coalition, syndicate.”
…I conclude that a consequence of the collaboration is that entitlement to any inventions associated with the collaboration are shared between the parties of the collaboration; that is, if an individual is not considered to be an actual inventor, they derive title by way of the collaboration."
In Vrubel and Another v Upham (supra), the delegate considered the situations in which a party may gain entitlement to an invention where they are not the inventor. The delegate considered that a party may gain entitlement via an assignment from the inventors, by some employer-employee relationship, or from some collaboration between the parties whereby a party derives a share of the title to the invention from the inventors. Although this decision was appealed to the AAT (Upham v Commissioner of Patents (supra)), the AAT dealt only with the issue of inventorship. These situations were not considered by the AAT, and are consistent with the line of Patent Office decisions on the issue of entitlement.
In the present case there is no evidence of any assignment between Bonadio and Leahy. There is also no clear evidence of an employer-employee relationship, though it appears from Caldwell's declaration that at one stage Leahy tried to change Bonadio's role to that of an employee. In relation to the third situation, the delegate in Vrubel and Another v Upham commented:
"Also there is nothing which establishes that the relationship was of such nature that it amounted to a co-partnership in respect of on-going developments arising from or incidental to the relationship, whereby any rights to inventions from individual developments rested with the partnership rather than the individual party responsible for such inventions."
In the present case there is evidence of such a co-partnership in respect of developments arising from the relationship. The jointly filed Irish applications are clear evidence of such a relationship. As I have stated above, Leahy and Bonadio knowingly and willingly filed the joint applications. Further, the applicant's own evidence is that Bonadio and Leahy were equal shareholders in the project and there was a "gentleman's arrangement" between the two.
It is clear from the available evidence that there was at least a commercial collaboration, if not a technical collaboration, between Leahy and Bonadio, and that Leahy is jointly entitled to the invention. I am not persuaded by arguments that it was Leahy's actions that led to the dispute between he and Bonadio and therefore any agreement between the two was null and void. The dispute occurred after the invention was developed and well after the first applications for the invention were filed in Ireland. Similarly, I am not persuaded by the argument that any such agreement related only to Ireland, and possibly the United States. I find that Patrick Leahy is jointly entitled to the invention.
My finding of Leahy's joint entitlement is supported by the letter from Bonadio to Feiler dated 25 January 1995, in which Bonadio asserts he is "50/50 joint inventor of Dexterity which is the subject of an Irish application no. 930649". Although this letter is marked "without prejudice", it is consistent with the comments of Caldwell regarding equal shareholdings.
Mr Horsburgh argued that there was no record of any assignment of rights from Leahy to Dexterity, other than in relation to a United States application. I note that in the section 32 request, the opponent has stated:
"Mr. Patrick F. Leahy is the inventor of the invention disclosed in Application No. 696289 (75074/94), and Dexterity, Inc would, on the grant of a patent for the invention, be entitled to have the patent assigned to it."
Prima facie, Dexterity is entitled to Leahy's rights in the invention in the absence of anything contradictory.
The position of the parties in relation to Alan Reid is somewhat curious. The opponent objected in its statement of grounds and particulars that there was no assignment of entitlement of his rights in the invention from Reid to Encoret. However, the opponent filed no evidence relating to the inventorship of Reid. The applicant, on the other hand, has made no effort to remove Reid as an inventor from their application, but has filed evidence in support of their argument that Reid is not an inventor.
From the scant evidence available on the matter, it appears that Reid is not an inventor of the device. Apparently Reid was a consultant Development Engineer who Bonadio had asked to prepare with him, under contract, the design drawings. Caldwell declares that Reid had told him that Reid had assisted Bonadio’s experimenting with materials, adhesives and configurations. This points to Reid’s contribution being made under instructions from the named inventor and in accordance with the named inventor’s vision of the final concept. There is no evidence that Reid solved any problems not recognised or not solvable by the named inventor or produced any results not contemplated by the named inventor (Row Weeder Pty Ltd v Nielsen 39 IPR 400). It appears from the available evidence that Reid was “a person who merely followed instructions of another in performing experiments (and) is not a co-inventor of the object to which those experiments are directed”. (See the United States decision of a District Court in Mueller Brass Co v Reading Industries (1972) 176 USPQ 361 at 372. This decision has been discussed in Upham v Commissioner of Patents and Another AAT No 13418 [1998] AATA 852 (3 November 1998) and a number of Patent Office decisions).
Even if Reid could be considered an inventor of the invention, it is clear in the letters appended to the McCarthy declaration that Reid has rescinded any entitlement he may have had to the invention. This gives rise to an estoppel in pais (see Costa v Daking, 29 IPR 241). Therefore, Reid has no entitlement to the invention.
CONCLUSION
I have found that Patrick Leahy is jointly entitled to the invention along with Frank Bonadio. Bonadio has assigned his rights to Encoret.
I have also found that Alan Reid is not an inventor of the invention. Further, Reid has rescinded any entitlement he may have had to any rights in the invention.
Given these findings, Encoret alone is not entitled to the invention and the ground of opposition under section 59(a) has been made out.
A delegate of the Commissioner also came to a finding of joint entitlement in State Electricity Commission of Victoria v D.U.T. Pty Ltd [1998] APO 44 (6 July 1998). The delegate concluded that what would naturally follow from this is a direction under section 32 that the application proceed to grant jointly in the names of both parties, preferably with associated amendments to the patent request and notice of entitlement. The delegate noted that amendment of the patent request and notice of entitlement was not mandatory - see Austgen Biojet Holdings Pty Ltd v Mervyn Goronszy [1997] APO 49 (23 September 1997). However the delegate allowed the parties a period of time in which to file written submissions as to how the matter should be disposed of. I am of the view that the parties in the present matter should also be invited to file written submissions as to how to proceed with the matter. In the present case there is possibly a question over whether or not Dexterity is an "interested party" as required by section 32. That is, whether Dexterity is entitled to Leahy's rights in the invention. Accordingly, I allow the parties two months to file written submissions (with copies to the other party) on how the matter should be disposed of, including any proposed determination under section 32.
Alternatively, the parties can settle the matter by the applicant amending the patent request and notice of entitlement to reflect my findings. Any such amendment should be filed within two months of this decision.
Although not mandatory, amendment of the patent request and notice of entitlement would be preferable in either case, given the deficiencies with the application and notice of entitlement I have mentioned above. (i.e. Alan Reid being a named inventor of the application and Encoret being named in the notice of entitlement as the applicant listed under article 8 of the PCT).
If no submissions or amendments are filed within two months of this decision, I will make a determination that the application is to proceed jointly in the names of Encoret Limited and Dexterity Surgical Inc.
COSTS
In matters before the Commissioner, costs usually follow the event. In this matter, the opponent has been successful to the extent that I have found that Patrick Leahy is jointly entitled to the invention. I therefore award costs against the applicant, Encoret Limited.
Brendan Bourke
Delegate of the Commissioner of Patents
Patent attorneys for the applicant : Fisher Adams Kelly, Brisbane
Patent attorneys for the opponent : Davies Collison Cave, Sydney
0
0