Falkenhagen et al v Polemate Pty Ltd
[1995] APO 32
•16 June 1995
official notice
decision of a delegate of the commissioner of patents
Application : No. 84712/91 in the names of TREVOR JULIUS FALKENHAGEN, ERIC GEORGE FALKENHAGEN and ANDREA SUSAN BATTEN
Title: Apparatus For Boring Around Standing Poles
Action: Request by POLEMATE PTY LTD, GAVIN JOHN CAHILL and RONALD WILLIAM LOUSICK under section 36(1); hearing; no appearance by patent applicants.
Decision: Issued .
Abstract: There was insufficient evidence to show that either Lousick or Cahill were joint inventors of the excavating machine disclosed in the specification of application 84712/91.
From the evidence Eric Alan Falkenhagen found to be the sole inventor of the excavating machine disclosed in the specification of application 84712/91.
On the balance of probabilities Polemate Pty Ltd found to be the beneficial owner of all rights to the excavating machine being the invention disclosed in the specification of application 84712/91 arising from agreements entered into between Ronald William Lousick and Geoffrey Peter Stock and the actual inventor Eric Alan Falkenhagen on or prior to 28 May 1991.
On the balance of probabilities Trevor Julius Falkenhagen, Eric George Falkenhagen and Andrea Susan Batten found not to be eligible persons in relation to the excavating machine being the invention disclosed in the specification of application 84712/91 and Polemate Pty Ltd found to be the sole eligible person in relation to the invention as so disclosed.
Under s.36(1), Polemate Pty Ltd declared to be the sole eligible person in relation to the excavating machine being the invention disclosed in the specification of patent application 84712/91.
Costs awarded against Trevor Julius Falkenhagen, Eric George Falkenhagen and Andrea Susan Batten and in favour of Polemate Pty Ltd.
patents act 1990
decision of a delegate of the commissioner of patents
Re: Australian Patent Application No. 84712/91 in the names of TREVOR JULIUS FALKENHAGEN, ERIC GEORGE FALKENHAGEN and ANDREA SUSAN BATTEN, and a request by POLEMATE PTY LTD, GAVIN JOHN CAHILL and RONALD WILLIAM LOUSICK under section 36(1) of the Patents Act 1990 for a declaration regarding eligible persons in respect of the invention disclosed in the specification.
background
The patent application
ERIC ALAN FALKENHAGEN (hereafter referred to as "Falkenhagen") filed Australian complete patent application 84712/91 on
25 September 1991 accompanied by a complete specification for an invention entitled "Innovative apparatus for boring around standing poles". The patent request indicates that this application is associated with Australian provisional application PK5711 filed by Falkenhagen on 19 April 1991 and as such may obtain early priority from application PK5711.
The patent request for application 84712/91 states the inventor as Eric Alan Falkenhagen and identifies the nominated persons as TREVOR JULIUS FALKENHAGEN, ERIC GEORGE FALKENHAGEN and ANDREA SUSAN BATTEN (hereafter referred to as "the Falkenhagens"). The application was directed to proceed in the names of the Falkenhagens under section 113 in February 1993 after a Deed of assignment dated 12 September 1991 was furnished to the Commissioner.
Request under section 36(1)
On 8 September 1993 POLEMATE PTY LTD, GAVIN JOHN CAHILL and RONALD WILLIAM LOUSICK (hereafter referred to as "Polemate et al") filed a request for a declaration under section 36(1) in respect of application 84712/91. The declaration sought is that "either Polemate Pty Ltd alone or Gavin John Cahill, Ronald William Lousick and Eric Alan Falkenhagen collectively are eligible persons" with respect to application 84712/91. The grounds on which the request is made are stated thus:
"1.Ronald William Lousick and Gavin John Cahill are coinventors of the application.
2.Polemate Pty Ltd is the beneficial owner of all rights in the invention by virtue of agreements with the inventors, Gavin John Cahill, Ronald William Lousick and Eric Alan Falkenhagen."
The hearing
A hearing for the s.36 request was set for 7 December 1994 following confirmation on behalf of Polemate et al, and confirmation by Mr Eric Falkenhagen on behalf of the patent applicants. Advice from Mr Falkenhagen followed attempts to seek confirmation from Pizzey & Company, the address for service of the application. When confirming the hearing date, Mr Falkenhagen advised the Opposition Clerk that he would either attend himself or with counsel. He requested the hearing notice to be faxed to him and not to Pizzey & Company, however the hearing notice was faxed to both the address for service and to Mr Falkenhagen.
After the hearing notices issued, Pizzey & Company requested the hearing on the matter be rescheduled to another date on the grounds that "the applicants have not yet instructed counsel but expects to do so within the next two weeks." On 5 December 1994, after seeking comments by telephone from Fisher & Kelly and Pizzey & Company on the request, acting Deputy Commissioner 3 advised both firms that the hearing would proceed as scheduled and that a party could make any submissions regarding an adjournment at the hearing.
Prior to the commencement of the scheduled hearing on 7 December 1994, Pizzey & Company, by facsimile transmission, requested the Deputy Commissioner in charge of hearings to consider certain matters before the scheduled hearing. Inter alia, they requested a Statement of Reasons pursuant to the provisions of the Administrative Decision (Judicial Review) Act ("AD(JR) Act") regarding the decision not to defer the hearing given on 5 December 1994. Deputy Commissioner 3, who has the responsibility for administering hearing matters, on reviewing the position, concluded that it was appropriate in the circumstances for the hearing to proceed. A Statement of Reasons as requested was furnished on 16 December 1994.
The hearing was held in Canberra on 7 December 1994. Polemate et al was represented by Peter Fisher, patent attorney of Fisher & Kelly and Thomas Stevens, solicitor for Polemate Pty Ltd. Gavin Cahill, Ronald Lousick and Peter Stock were present and gave evidence. There was no appearance at the time and place appointed for the hearing by Falkenhagen or the Falkenhagens or anyone on their behalf.
By letter dated 14 December 1994 and filed with the Commissioner on 15 December 1994, Pizzey & Company advised they were no longer the address for service for application 84712/91.
Related patent applications
A number of patent applications are related in some way to application 84712/91. These are:
(a)AU petty patent application 20750/92 filed 31 July 1992 by Falkenhagen as a divisional application of 84712/91, now granted petty patent 630857;
(b)International application PCT/AU92/00518 filed 25 September 1992 by Falkenhagen claiming priority from
AU 84712/91 and AU 20750/92; and(c)AU patent application 26856/92 is the Australian national application arising from PCT/AU92/00518.
[Following action under PCT Rule 92bis, applications (b) and (c) are proceeding with the Falkenhagens as additional applicants and Falkenhagen as applicant/inventor for US only.]
The above applications were all filed on behalf of the respective applicants by Pizzey & Company.
Also of note is that International application PCT/AU92/00169, filed on 16 April 1992, claims priority from AU Provisional application PK5711 (as does the subject application 84712/91). POLEMATE PTY LTD is given as applicant for this International application for all designated states other than for US, whilst ERIC ALAN FALKENHAGEN, GAVIN JOHN CAHILL and RONALD WILLIAM LOUSICK are given as applicant and inventor for the US only. AU patent application 16610/92 is the Australian national application arising from PCT/AU92/00169. These applications were filed on behalf of the respective applicants by Mr Peter Fisher, patent attorney, now of Fisher & Kelly.
On 6 August 1992, Polemate Pty Ltd requested a determination by the Commissioner under s.32 with respect to applications
AU PK5711 and International application PCT/AU92/00169 concerning
"the person who may proceed with the applications
the manner of proceeding with the applications."
Evidentiary material comprising a declaration by Ronald Lousick accompanied that request. Action on that request is in abeyance pending the outcome of the present s.36 request. However the applicants of the present s.36 request rely in part on the evidentiary material supplied with the s.32 request.
OVERVIEW OF THE DISPUTE
In this matter Polemate et al seek a declaration under s.36 regarding entitlement to the invention disclosed in the specification of application 84712/91.
Section 36 of the Patents Act 1990 provides:
"36. (1) Where:
(a)a patent application has been made and, in the case of a complete application, the patent request and complete specification have not been accepted; and
(b)the Commissioner is satisfied, on application made by a person in accordance with the regulations, that the nominated person is not an eligible person in relation to an invention disclosed in a specification filed in relation to the application but that some other person is an eligible person in relation to the invention as so disclosed;
the Commissioner may (whether or not the patent application lapses or is withdrawn) declare in writing that the other person is such an eligible person.
(2) The Commissioner must not make a declaration without first giving the nominated person a reasonable opportunity to be heard."
From the dictionary to the Act, a ""nominated person" means the person identified in a patent request as the person to whom the patent is to be granted", and an ""eligible person", in relation to an invention, means a person to whom a patent for the invention may be granted under section 15".
The present dispute principally involves ERIC ALAN FALKENHAGEN ("Falkenhagen"), GAVIN JOHN CAHILL ("Cahill"), RONALD WILLIAM LOUSICK ("Lousick") and POLEMATE PTY LTD ("Polemate"). The evidence of Lousick indicates that in May 1991, Falkenhagen, Lousick and GEOFFREY PETER STOCK ("Stock") purchased a shelf company and changed its name to Polemate on 15 May 1991, the mentioned persons being the only shareholders each holding one share.
Falkenhagen filed application 84712/91, and earlier associated application PK5711, and in both applications Falkenhagen is listed as applicant and sole inventor. In application PK5711 Falkenhagen is listed as the Nominated Person while for application 84712/91 the Falkenhagens are the Nominated Persons. Subsequent to filing application 84712/91, an assignment by Falkenhagen to the Falkenhagens has been directed whereby the application is to proceed in their names - I will refer to this assignment later in this decision. Falkenhagen's evidence in this matter asserts that he was the sole inventor of the invention and he refutes claims by Polemate et al that Polemate Pty Ltd or Lousick or Cahill are or were eligible persons in relation to the invention.
I believe the position of the parties in respect of the s.36 request can be simply summarised as follows:
.Falkenhagen claims that he is the sole inventor of the invention disclosed in the specification of application 84712/91, and as such was an eligible person to be granted the patent - by an assignment dated 12 September 1991 he assigned his interest to the invention to the Falkenhagens and thus they are the eligible persons.
.Lousick and Cahill claim to be coinventors of the subject invention with Falkenhagen. Polemate claims to be the beneficial owner of the invention by virtue of agreements with the coinventors Falkenhagen, Lousick and Cahill. Accordingly Polemate claims to be an eligible person in relation to application 84712/91.
The wording of s.36(1) indicates that the Commissioner must be satisfied that the nominated person is not an eligible person before declaring otherwise. In my view the onus rests with a person making a request under s.36(1) to clearly establish a case whereby the Commissioner is satisfied that the nominated person given on the patent request is not entitled to the invention either solely or in part and that some other person is entitled. If such a case is not established the Commissioner is bound not to find other than for the existing nominated person.
PRELIMINARY MATTERS
Evidence
The s.36 applicants, when filing their request on 8 September 1993, asked that cross reference be made to material filed on 6 August 1992 with an earlier s.32 request to the Commissioner for evidentiary material to support their s.36 request. That material comprises a statutory declaration by Lousick dated 30 July 1992 with annexures RL1 to RL23. Some reliance and support for the request is also placed on a declaration by Stock dated 26 November 1993 filed to support a s.223 extension application in respect of related petty patent 630857.
The Commissioner originally gave the patent applicants a period of two months and then a further two months in which to file any answering evidence to the s.36 request. On 1 February 1994 the following evidence was filed on their behalf:
.Statutory declaration by Eric Alan Falkenhagen with Exhibits F1, F3-F9, F11, F12 and F14;
. Statutory declaration by John Kingston Pizzey;
. Statement (undated) by John Cutcliffe; and
.Statement by Laurence Christopher Boyd with an attached statement by Robert Arthur Mackay made to Boyd and as recorded by Boyd.
Lousick, Cahill and Stock were in attendance at the hearing. Although the patent applicants did not attend and were not represented, I considered it appropriate to cross-examine Lousick on his evidence. In addition, Mr Fisher requested that Cahill and Stock be sworn as witnesses to provide oral evidence relating to their knowledge and involvement with the invention. I agreed to this request and both Cahill and Stock gave evidence in chief and were then cross-examined by me. Given the nature of the request under consideration, the fact that the documentary evidence before me was in various respects conflicting, and the presence of the witnesses, I considered that oral evidence from the witnesses may assist in establishing the relevant facts and circumstances involving the invention.
At the hearing Mr Stevens gave me a copy of a statutory declaration dated 7 December 1994 by David Lewis Clout of Clout and Associates, Chartered Accountants of Brisbane. Mr Clout says he was appointed trustee of the bankrupt estate of Eric Alan Falkenhagen on 30 October 1994 and his declaration raises concerns regarding the standing of the assignment dated 12 September 1991 between Falkenhagen and the Falkenhagens, and which may be voided by a court under the Bankruptcy Act 1966. As I understood Mr Stevens' submission, the standing of the assignment is somewhat immaterial since if I determine that Polemate is an eligible person with regard to the invention, then Mr Clout, as Falkenhagen's bankruptcy trustee, has an interest in the invention as a shareholder of Polemate.
Credibility of the witnesses
Nothing that transpired at the hearing has led me to seriously question the credibility of the witnesses. They impressed me with their basic candour of testimony, and whilst they clearly gave the impression of being disappointed with the breakdown of their association with Falkenhagen and the need for this action at all, I felt they gave evidence honestly, fairly and to the best of their knowledge and ability.
Documentary evidence
Of the documentary material filed in this matter the statutory declarations of Lousick and Falkenhagen are of most relevance and importance. The declaration by Pizzey merely asserts a certain sequence of events, some of which are disputed in evidence. The undated statement by Cutliffe refers to an alleged meeting with Falkenhagen and Lousick on or about 11 March 1991, and the statement of Mackay as recorded by Boyd refers to alleged meetings with Falkenhagen and Lousick from as early as January or February 1991.
Regarding the declaration of Lousick, I make the following observations.
.Annexure RL1 is a copy of the month of March 1991 from a calendar bearing dollar amounts against certain days, the amounts said to indicate the money payable to Lousick for work done with Falkenhagen digging holes. (In some cases a number is also given, apparently indicating the number of holes dug).
.In para 10, Lousick says he and Falkenhagen approached Cahill on or about 18 March 1991.
.In para 11, Lousick says he had a first meeting with Stock on 3 April 1991. In para 13 he says that an informal meeting took place on 10 April 1991 involving himself, Stock and Falkenhagen at the Australian Football Park Club rooms in Cairns.
.Annexures RL9, RL11, RL12 and RL19 are typed minutes of meetings of Polemate dated 28 May, 5 July, 29 July and 31 August 1991, respectively. All minutes are signed by Lousick and Stock but only the first two are signed by Falkenhagen even though the minutes state he was present at the latter meetings.
.The reference in para 12 that the patent will issue on application PK5711 to the Falkenhagens is factually incorrect, since the application lapsed one year from its filing.
Regarding Falkenhagen's declaration, I make the following observations.
.Exhibit F-3 is a photocopy of Falkenhagen's diary, according to Falkenhagen "covering the period 4 March to 31 July 1991", except I note no pages are included for 4-6, 9-15, 28-31 May and 4-5 June. Entries in March include references to digging work done with Lousick.
.In para 5/9 Falkenhagen says he had his first meeting with Cahill on 26 March 1991.
.In paras 5/11 and 6 Falkenhagen's evidence is that he met Stock and Lousick at the Australian Rules Football Clubhouse on 3 April 1991.
.Falkenhagen's diary entries include references to events concerning the invention and manufacture of a prototype machine including references to meetings with various people about the machine.
There are some significant differences between the evidence of Falkenhagen and that of Lousick. For instance, firstly, the respective diary or calendar entries regarding pole digging work differ. As examples, Lousick says that he first went digging holes with Falkenhagen on 5th March 1991 but Falkenhagen records first discussing the hole digging work with Lousick on 6th March and also records "no work day" for that date; Lousick records digging on 8 March but Falkenhagen records "rainey day stayed home"; for 14 March Lousick records only "RAIN" whilst Falkenhagen's entry indicates that they were digging holes; and for 22 March Lousick records 29 holes dug whereas Falkenhagen records only 12. Secondly, their accounts differ as to when they first together met Cahill. Thirdly, their accounts appear to differ as to when they first together met Stock.
To a certain extent Falkenhagen's evidence is supported by references in the copies of his diary pages exhibited as Exhibit F-3. However, most of his diary entries about digging holes with Lousick do not coincide with records of Lousick, and some date pages are missing, thus raising doubts about the accuracy of the diary records generally. The period covering 28 May to 5 June is an alleged noteworthy period for Polemate and Falkenhagen but there are no diary pages exhibited in F-3 for some of this period. Whilst the statement of Cutliffe appears to corroborate evidence of Falkenhagen as to a meeting, I do not think that the statement of Mackay is of any benefit to Falkenhagen since it refers to alleged matters involving Falkenhagen and Lousick at a time when there had not been any involvement regarding a digging machine. Overall Falkenhagen's evidence is largely uncorroborated and untested.
Lousick was cross examined on his evidence. In respect to some of his evidence, particularly the initial dealings between Falkenhagen and Lousick with Cahill, and those involving Polemate, some corroboration of these dealings was given by Cahill and Stock in their oral evidence at the hearing. However, there is much of Lousick's evidence which is uncorroborated.
In this matter the Commissioner is acting as a Tribunal. Concerning tribunals, it was said by Lord Denning M.R. in T.A. Miller Ltd. v. The Minister for Housing and Local Government and Another (1968) 1 WLR 992 that a tribunal (of this kind) is master of its own procedure provided that the rules of natural justice are applied, and that tribunals are entitled to act on any material which is logically probative, even though it would not be evidence in a court of law.
Similarly, Deane J., sitting in the Federal Court of Australia, issued a judgement including the following paragraph:
"These technical rules of evidence, however, form no part of the rules of natural justice. The requirement that a person exercising quasi‑judicial functions must base his decision on evidence means no more than it must be based upon material which tends logically to show the existence or non‑existence of facts relevant to the issue to be determined, or to show the likelihood or unlikelihood of the occurrence of some future event the occurrence of which would be relevant."
(See Minister for Immigration and Ethnic Affairs v. Pochi 31 ALR 666.)
Accordingly 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. 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.
Criteria for a declaration under s.36
I have earlier referred to the statutory provisions of s.36. What I need to determine is the eligible person(s) (ie. who is entitled to be granted a patent) in relation to an invention disclosed in the specification of application 84712/91. In considering that matter I believe the following issues need to be assessed:
1.What is/are the invention(s) disclosed in the specification of application 84712/91?
2.What is/are the invention(s), if any, of Falkenhagen, Lousick and Cahill?
3.Are any two or all of Falkenhagen, Lousick and Cahill co-inventors with respect to an invention?
4.Does Polemate Pty Ltd have any rights in any invention of any one or more of Falkenhagen, Lousick and Cahill?
The question of inventorship and particularly when persons can be considered co-inventors or joint inventors is a matter on which there is little judicial precedent. The issue has arisen in several recent UK cases namely Norris's Patent (1988) RPC 159 and Viziball Ltd's Application (1988) RPC 213. Although there is little discussion on the subject of joint inventors in textbooks on patent law, the comments in Terrell on the Law of Patents, 12th edition, 1971, at paras 91 & 92, and by Fraser Old in his text Inventions, Patents, Brands and Designs (Patent Press), 1994, at page 56 are of some note. In the latter text Mr Old says:
"... the inventor will normally be the person who conceives the original idea. If that person instructs a second person, such as an engineering foreman, to come up with a prototype then the engineering foreman will normally not be regarded as an inventor. The reason for this is that the foreman is regarded as `a machine' which carries out the instructions given to it. The engineering foreman may come up with a particularly good design of the apparatus of the invention which may be easy to fabricate, economic in the use of materials and the like, but even so the first person is the inventor. However, if the engineering foreman comes up with an arrangement which achieves some result or advantage not contemplated by the original suggestion, then the engineering foreman may be regarded as one of two joint inventors of the improved invention."
The issue of inventorship has infrequently arisen in decisions of the Commissioner. In a recent decision in Harris v. CSIRO 26 IPR 469, the delegate of the Commissioner posed the question "would the invention have occurred without Harris' involvement (albeit unknowingly at the time)?" in deciding whether Harris was a joint inventor of a particular invention. See also Costa v. Darking 29 IPR 241. In a much earlier case, Tribe v. Ranken 1 IPR 561, the delegate of the Commissioner seems to have considered whether Ranken had "made any material contribution to the invention" in deciding whether Ranken was a joint inventor.
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.
THE INVENTION DISCLOSED IN APPLICATION 84712/91
In general terms, the invention disclosed in the specification of application 84712/91 is an apparatus to excavate a trench around standing poles, such as telegraph poles. The typewritten specification commences with the following text:
"Field of the Invention
The following invention relates to a pole extraction apparatus and more particularly, though not exclusively to an auger device adapted to a surround the base of a telegraph pole to examine and or excavate therearound so as to facilitate removal of the pole from the ground.
Disclosure of the Invention
There is disclosed herein an apparatus comprising;
a frame;
a support structure rotatably mounted to the frame, the support structure being essentially hollow and adapted to rotate about a central longitudinal axis thereof;
at least one boring element supported by the support structure so as to rotate therewith;
means to rotate the support structure; and
means to advance the support structure in a desired direction of boring.
Preferably the support structure is a drum.
Preferably the frame is adapted to slide along a slide track. In this case, an hydraulic ram is provided to effect such sliding.
Preferably the means to rotate the drum is a motor supported by the frame and adapted to rotate the drum via a chain drive mechanism.
Preferably the boring element comprises a helical blade attached to the periphery of the drum.
Preferably a plurality of cutters are attached adjacent to a leading annular edge of the drum.
Preferably a wiping element is attached to the frame so as to contact the drum at an effective trailing extremity thereof.
Preferably the drum comprises two hemi-cylindrical halves pivotally attached to one another.
Preferably the slide track is adapted to pivot relative to an attachment arm, which attachment arm services to connect the frame to a backhoe or the like."
The specification includes two figures of drawings and the elements of the apparatus as broadly described in the passages quoted are identified in the detailed description of the embodiment shown in the figures. The apparatus described includes a drum-like element, bearing helical blades on the exterior, and formed in two hemi-cylindrical halves. The apparatus is constructed so that the drum element can be positioned to encircle a pole, and when so positioned the drum can be rotated and moved parallel to the pole to excavate earth or material from around and close to the pole.
Features of note in the excavating apparatus described as the embodiment are:
1.The drum-like element formed in two hemi-cylindrical halves having helical blades on their external periphery and cutting elements at their lower periphery, the halves when together forming the drum-like element.
2.A subframe which carries the drum halves and which is arranged to move the halves together or away from each other.
3.Means to rotate the drum comprise a chain, half of which is welded to each drum half on its external periphery near its top edge, and two hydraulic or electric motors with pinions to mesh with the chain and which rotate the halves of the drum in unison.
4.A main frame comprising first and second frame members pivoted together so as to form a substantially L-shaped structure, the first member being arranged for connection to a vehicle and adjustable in length by means of a hydraulic cylinder, and the angle between the frame members being adjustable by means of a hydraulic cylinder.
5.The second frame member having a slide track, and the subframe which carries the drum engaging with the slide track and being adjustable in position along the track by means of a hydraulic cylinder (whereby with the second frame member substantially vertically arranged, the drum can be adjusted vertically relative to the ground).
6.The drum halves are fitted with "a double T section bronzed capped to form a bearing" with an associated "C section" on the subframe to complete the bearing.
Also of note is that Fig 1 of the drawings shows an elevation view of the entire apparatus and on the subframe supporting the drum element the word "POLEMATE" appears in a box.
The invention disclosed in application PK5711
At this point it is appropriate to say something about the disclosure in the specification of application PK5711. Whilst the specification of application PK5711 only contains 2 sheets comprising in effect about one sheet of description and no drawings, the disclosure encompasses the apparatus as described above. There is, for instance, reference to "the boreing (sic) cylinder has cutting edges and flites (sic) fitted to the external area", the "machine is manufactured in one piece and then cut in half and hinged", actuating "the unique swing mechanism that allows the implement to open and thus can be clamped around the pole", "opening and closing of the implement", "driving the boreing cylinder by means of chain and sproket (sic)", and a double T-section associated with an outer C-section bearing arrangement for the cylinder. In my view the disclosure in application PK5711 relates to the same excavating machine as disclosed in application 84712/91.
THE INVENTION(S), IF ANY, OF FALKENHAGEN, LOUSICK AND CAHILL
In order to assess what invention Falkenhagen, Lousick, and Cahill may have made either individually or together I need to refer in some detail to the evidence before me.
Lousick
Lousick's evidence is that he has known Falkenhagen for over 10 years and that during March 1991 he assisted Falkenhagen in meeting a contract by manually digging holes for power pole inspections on the Atherton Tableland in Queensland. Lousick says that he first went digging holes with Falkenhagen on 5th to 7th March "with no intention of receiving payment" but on 7th March Falkenhagen offered a payment per hole which he accepted.
In para 8 Lousick says that during the initial period of this work, Falkenhagen and he discussed the idea of devising a machine to effect the digging work and remove the soil. His oral evidence clarified statements in para 8 to the effect that methods such as using a miniature excavator or chain digging machine were first considered and that eventually they arrived at a drum structure. In para 8 of his declaration he says:
"... We came up with the idea of a machine which could be used for digging around the power poles. Notwithstanding our lack of finance, Falkenhagen and I determined, during the period 8th March to 15th March 1991 to develop our initial idea which we had come up with for the machine, later to be called "the Polemate", ........ We determined that the [miniature] excavator was unsuitable. We went back to my son's place to reconsider using the backhoe and to experiment with it. We came up with the idea of a circle formed by a drum made of 18 inch bore casing. We then went to a scrap metal dealer, Vic Tonkin, and I purchased the 18" bore casing for $80. Falkenhagen said he would contribute one half of the purchase price as soon as he had the money available, but he did not do so."
The following sequence of exchanges in cross examination record what Lousick said of these discussions:
Q.Was it the fact that together you came up with the idea of something to encircle the existing poles? - Lousick: Yes.
Q.And was there any particular construction of that sort of device which you advanced as against Mr Falkenhagen?
Lousick: Yeah there was, the circular motion of something to go around, otherwise that's why we were talking about excavators which dug a triangular hole..... we discounted something which would actually attach to the pole ..... something, a machine or tractor or something to go around and around with a furrow to gouge the material out as it went around, that was the original concept that I put to him.
And a little later,
Lousick: The original thought or principle was that something had to go around the pole - at this stage it was early in the piece, there was no thought of the one we ended up with - the concept was there for something to go around ....... we eventuated onto circular and the conversation we had led on from there to something that couldn't touch the pole, it had to be circular, it had to be virtually open at some time or other to get it on the pole and get it away from the pole - that was the initial part of it - I did suggest this to him and going around and around the pole.
From Lousick's evidence I get the clear impression that together Falkenhagen and Lousick considered the concept of something going around and around a pole to effect digging. Initial thoughts of using an excavator or chain digger were dismissed. Whilst I note that in para 8 Lousick says "We came up with the idea of a circle formed by a drum ...", there is no evidence by Lousick as to whether he or Falkenhagen suggested the drum structure.
Regarding the involvement of Cahill, Lousick says that to progress the invention they sought to make a prototype and so around mid March 1991 they approached Cahill who had a well equipped engineering workshop in Cairns. About this Lousick says the following in para 15:
"On or about 15th March 1991 Cahill had agreed to undertake the design and engineering work relating to the invention. Falkenhagen and I developed the basis (sic) idea for the invention, but we did not have the skills to take it further. Falkenhagen and I explained to Cahill our concepts and ideas. After much discussion Cahill was able to commence work. ..... Cahill had substantial input in developing the invention and designing the prototype. He was subsequently paid by the Applicant [Polemate] for his contribution and has arranged his interest in the invention to the Applicant. Cahill has, on behalf of the Applicant, continued to play an important part in refining the design of the "Polemate" machine and a number of improvements have been made. ....."
The reference to the 15th March in this passage is at odds with para 10 of Lousick's declaration where he states that "on or about 18th March" Falkenhagen and he together approached Cahill. It is also worth noting at this point that Lousick originally agreed to fund the work Cahill was to do for himself and Falkenhagen.
From cross examination Lousick said that when he and Falkenhagen approached Cahill in mid March 1991, they had the concept of the drum to effect the digging and some idea of a driving arrangement for it, such as the use of a hydraulic pump and motor. He also said that they did not know how to manufacture it and get it to work and that they did not draw any plans or take any sketches or plans to Cahill when they first met him. Further he said:
"The actual operations of it were, we didn't know ourselves, Gavin [Cahill] was the one, the person, who thought of the actual operation, placing the bits and pieces around, manufacturing the machine."
Lousick also said that Cahill's contribution to the invention included such things as:
.the need to weld to the drum the various components, then machine it, and then cut it to form two halves;
.a better bearing arrangement than suggested by Lousick and Falkenhagen;
.the arrangement and distribution of the cutting feet on the bottom of the drum; and
.the arrangement (angle and radius) of the flights on the surface of the drum.
Falkenhagen
From Falkenhagen's declaration filed in this matter I will summarise his evidence relevant to inventorship by date sequence, the source being indicated by bracketed references.
6 March 1991: Falkenhagen and Lousick met and Falkenhagen agreed that Lousick could help him to dig holes around poles to enable inspection. Lousick to receive a payment per pole. (Exhibit F-3, Falkenhagen's diary copies.)
7 March: Falkenhagen says that Lousick commenced digging holes with him, that they "discussed ways of mechanizing the process" and that Lousick suggested using a chain digger (para 3a).
8 March: Falkenhagen and Lousick further discuss digging machines and being powered by a 4WD motorcycle. Falkenhagen says Lousick drew some designs of a chain digger (para 5/2d and Exhibit F-3).
10 March: Exhibit F-3 records: "After dreaming about a machine to dig around poles it was clear to me how to design it so I drew a design to fit onto a backhoe." Exhibit F-5 is described as "an attested copy of an original drawing in pencil by me of my first thoughts for a split boring-cylinder excavating machine for digging around posts" (para 5/2f). [Exhibit F-5 shows 3 elements drawn in pencil on one side of a used card with writing or other markings in black biro and black ink pen. It is not clear that this drawing constitutes what Falkenhagen may have drawn on 10 March as the diary records.]
11 March: In para 5/2g Falkenhagen says:
"On Monday 11 March, 1991 I called into John Cutcliffe's place at Gordonvale and showed him my drawings of a machine to excavate around poles. They thought it was quite funny, John and family had a good laugh. Ron [Lousick] was present at that meeting and had great difficulty understanding my concept."
Exhibit F-3 contains a first entry: "Saw John Cutcliff (sic) at Gordonvale showed him my drawings of my machine I dreamed about everyone had a laugh." A second entry, spaced from the first, records: "I told Ron about my dream of how to manufacture a machine for digging around poles. He could not understand how it would work. He said a chain digger would be better. He also drew a chain digger. I could not see how it would be effective."
12 March: Falkenhagen and Lousick called into Bob Mackay's and "discussed my ideas". Bob Mackay "came over and I showed both Bob & Ron how it would work after drawing on a piece of cardboard. Bob said he understood but Ron said he could not understand how the machine would go around a pole and rotate. I told him by chain and sprocket. He still doesn't understand." (Para 5/2h and Exhibit F-3).
14 March: Falkenhagen says that Lousick finally "understood my concept" for a digging machine. (Para 5/2h and Exhibit F-3).
16 March: Falkenhagen says he spoke to Bob Mackay "with a view to having him build the machine I had invented and he indicated that the cost would be approximately $5000. I could not afford this and set about finding ways of reducing this cost. Bob Mackay suggested I should patent it as it was a very good idea." (Para 5/2i). In Exhibit F-3, there are references to Mackay and suggestions to "patent it" after which is recorded "I said I probaly (sic) will."
19 & 22 March: Falkenhagen and Lousick inspected a small excavator at Les Hepworth's with a view to using it to dig around poles (Exhibit F-3).
25 March: Falkenhagen says that "Lousick suggested that we approach his acquaintance Gavin Cahill of Cashcor Engineering, regarding the manufacture of components for my machine" (para 5/9a). Exhibit F-3 records:
"Went to Atherton with Ron. He appoligised (sic) over our dispute re excavator and he said OK I am wrong.
He later said that his son has a Backhoe we can use if we want to build my machine on, and that he knows an engineer Gavin Cahill who may be interested in building the pole machine. He said if he could have a half share in selling the machines, he would sell his car to get funds to build one.
I agreed."
26 March: a) Falkenhagen says that "on or about 26 March, 1991" he and Lousick looked for and obtained "an 18 inch piece of bore casing from which I could build a prototype split drum", Lousick paying for it (para 5/8d).
b) Falkenhagen also says:
"On Tuesday 26 March 1991 I had my first meeting with Gavin Cahill of Cashcor Engineering and the purchased casing was delivered to them. Their job was to fit external flytes to the drum and the slipper bearings.
After I drew the components and sizes of the machine on the floor of Cashcor Engineering, Gavin Cahill indicated it was a good invention and he gave me a small slip of paper with a telephone number on it to make contact regarding patent protection. The telephone number was that of the Queensland Innovation Centre [QIC]." (Paras 5/9b,c.)
Exhibit F-3 records:
"Ron & myself .... saw Gavin Cahill. I explained to Gavin how my machine would work by drawing in chalk on the floor, he immediately knew how it would and also gave us some more ideas. He agreed to build part of the machine for $700 then Bob and myself would finish it off. ......... ."
c) Falkenhagen says he spoke by telephone to Mike Beecher of QIC on 26 March about patenting the invention and Beecher agreed to forward him the necessary provisional patent documents. (Para 5/12a and Exhibit F-3).
27 & 28 March: a) Falkenhagen says he received the promised patent information on 27 March from QIC and says he "filled in the forms and returned them to Mike Beecher in Townsville with a cheque enclosed for $75.00 as this was the cost to apply. The patent documents were returned 4 days later with a letter from Mike Beecher saying I would have to make out a new cheque and address it to the Patent Office in Canberra." (Para 5/12b).
b) Exhibit F-3 for 28 March records: "Sent of (sic) provisional application for a patent. Ron & me both decided on a name of polemate."
c) Exhibited as F-8 is Falkenhagen's book of cheque stubs for March/April 1991. The stub for cheque no 093275 is dated
3-4-1991 and drawn to QIC for $70. The stub for cheque no 093277 is dated 16-4-1991 and drawn to Patents Office for $70.
[I note that the documents filed on 17 April 1991 for patent application AU PK5711 bear typed dates of 3 April 1991.]
10 & 17 April: Entries for these dates in Exhibit F-3 refer to attaching "the polemate to backhoe and spun it" (10th) and "Met Michael Beecher re patents & demoed the polemate, some problems" (17th).
About Cahill's claim as coinventor, in para 5/15 of his declaration Falkenhagen says:
"... I refute the suggestion that Cahill designed the Polemate, he worked to my instructions. ....
I agree that Gavin Cahill had input into the engineering of the machine for which he was paid a considerable sum. The input was in relation to the commercial production.
While Ron Lousick refers to the "improvements made" by Gavin Cahill to the machine he does not list the so called improvements. I say that conceptually these were insignificant."
In his evidence Falkenhagen refers to various drawings. Lousick exhibited sketches marked RL2A, RL3 and RL4 to his declaration and Falkenhagen disputes who drew those apart from RL4 (Lousick's drawn in early April 1991), but as it is not clear when the others were drawn their usefulness as evidence is limited. I have already referred to the drawings of Exhibit F-5 against the reference to 10 March. Falkenhagen says that the drawings of Exhibit F-4 are drawings of Lousick made on 8 March of a chain digger proposal for digging around poles (para 5/2d). Exhibit
F-6 is said to be 7 sheets of drawings by Falkenhagen of his developed thoughts for a split boring-cylinder excavating machine (para 5/2f). It is not apparent from the evidence when these were drawn. Overall, all these sketches are of little use in determining the inventorship issue.
In para 5/12f of his declaration Falkenhagen refers to Exhibit
F-9 as "a copy of the drawings which were filed with the provisional patent application No PK5711 which correspond with my sketches." These drawings are not as stated by Falkenhagen since no drawings accompanied application PK5711 - they correspond to the drawings filed for application 84712/91, drawings which according to evidence on behalf of Polemate were allegedly first drawn in late May or early June 1991.
Cahill
Mr Cahill gave oral evidence at the hearing. In evidence he said that when Falkenhagen and Lousick came to see him (he did not indicate the date) they had the concept of a drum to run in cam follower bearings, teeth on the bottom to dig and the drum had to split. He said they brought no plans or drawings with them. He said that initially they wanted him to make up a ring in which to mount the cam follower bearings to thus hold the two halves and allow them to spin. He also said that when he understood what they wanted to use the device for he indicated to them that the bearing arrangement proposed would not work and that they proceeded to sketch other bearing arrangements on the floor, the cam follower bearing idea having been earlier drawn on the floor. Cahill said that Lousick suggested a "greasy plate" slide bearing which also was not practical, and Cahill said he suggested the use of a similar arrangement with an element running in a channel with surfaces brazed up to avoid similar metal to metal sliding surfaces, an arrangement which Cahill said could be described as a double T section on the drum with brazed surfaces running in a C section support frame.
Cahill said that he was left to fabricate the machine and proceeded to make the components for the bearing arrangement and other components for the drum and the machine. He said that there was considerable engineering difficulty in making the drum since he needed to roll up rings for the bearing and the flights, machine elements, and account for stresses when forming the two drum halves. Cahill conceded that Falkenhagen and Lousick had come to him with the general idea regarding the hinging of the drum halves and for a drive using hydraulic motors. However he said that he was left to arrange the precise constructions of the hinging arrangement for the drum halves, and the drive arrangement by hydraulic motors acting on a chain welded to the drum. He asserted that the offset/angled hinging of the drum halves of the prototype machine to allow easy positioning about a pole was his idea.
Cahill also said that when first testing the prototype mounted on a backhoe there was a problem in keeping the drum properly aligned so not to contact and damage the pole about which it was used. He said he suggested the need for a slide frame for the machine so that the drum could be advanced into the ground without continually repositioning the support arm of the backhoe and the angle of the drum relative to that arm.
Cahill said that the prototype machine was first tested on 17 April 1991.
Decision on inventorship
As I have already indicated, the evidence of Falkenhagen and Lousick is at odds as to the dates of digging holes together, and when together they first met Cahill and Stock. With regard to the dates for digging holes together, I cannot determine which of Lousick's annexure RL1 or Falkenhagen's Exhibit F-3 accurately reflects the position. As I have also already indicated, much of both Lousick's and Falkenhagen's evidence is uncorroborated, and regarding hole digging, either declarant has not provided any independent evidence to confirm their record of this work together. Were I in a position, which I am not, to clearly prefer either Lousick's or Falkenhagen's evidence as to hole digging, then this would affect the overall standing of Falkenhagen's diary exhibit as evidence. However I am left to accept the diary exhibit as providing prima facie support for relevant evidence of Falkenhagen.
Mr Fisher submitted that it is very difficult to determine the specific respective contributions of Falkenhagen and Lousick to the original concept of the invention and that perhaps it was a collective invention arising as a result of discussions over a period of time, an invention which was finally reduced to practice by Cahill. The s.36 applicants did not dispute that Falkenhagen was a coinventor.
Falkenhagen acknowledges that he and Lousick discussed some ways of mechanizing the digging process. Both he and Lousick indicate this occurred in the week prior to 10 March 1991. The evidence indicates that they first envisaged something like a chain digger or mini excavator. Lousick asserts he suggested something to go around the pole, as he said in oral evidence - "something, a machine or tractor or something to go around and around with a furrow to gouge the material out as it went around, that was the original concept that I put to him". Importantly, although in oral evidence he had ample opportunity to indicate it, Lousick did not say that he had suggested a split drum or cylinder structure as being the solution. To me, Lousick's reference to "something to go around and around", given the context, does not suggest a cylinder structure.
Falkenhagen says he dreamed of a machine to do the digging and drew a design of it to fit a backhoe on 10 March 1991. Falkenhagen provides no description in his evidence of the machine he envisaged on 10 March 1991. There is a suggestion in Falkenhagen's evidence that Exhibit F-5, "my first thoughts for a split boring-cylinder excavating machine for digging around posts", is Falkenhagen's original drawing at that time but there is no statement by Falkenhagen clearly to that effect, nor indicating that the machine he envisaged had a split cylinder. Falkenhagen says he showed Cutcliffe drawings on 11 March, but Cutcliffe, in his undated statement, merely refers to "some sketches of an auger device that was hollow with external flites (sic) to remove dirt from around a power pole." It is not evident what sketches Cutliffe may have seen nor is it clear that what was described to him had a split cylinder. Falkenhagen says that Lousick did not understand his concept for a digging machine until 14 March.
What I think is clear from the evidence of Falkenhagen and Lousick is that in the week commencing 10 March 1991 the concept of a digging machine, comprised of a split cylinder with external flights and cutting elements, running in some bearing structure and having driving means for the cylinder, had been proposed and that a prototype was under active consideration by Falkenhagen and Lousick from about late in that week. What the evidence does not conclusively establish is who between Falkenhagen and Lousick conceived this particular form of digging machine. Importantly, in my view, the evidence before me does not establish it was Lousick, but rather, on the balance of probabilities, it came from Falkenhagen.
There is no doubt that initially Falkenhagen and Lousick together discussed and put forward ideas regarding a way to mechanize the manual pole digging work they were doing. From Falkenhagen's evidence it seems these discussions may have advanced little before the date he asserts he conceived the split cylinder machine. However Lousick asserts he suggested the concept of something to go around and around a pole to gouge the material out. The final concept of the specific digging machine involving a split cylinder arose after these initial discussions, albeit as I have concluded from Falkenhagen.
From the evidence I believe it is inconclusive whether the invention would not have occurred without Lousick's involvement and suggestions prior to the conception of the split cylinder. In addition, I cannot identify from the evidence anything of material benefit from Lousick which clearly contributed to the final concept of the specific digging machine involving a split cylinder disclosed in the patent specification. In actions such as this the onus rests on a person claiming inventor status to clearly establish his or her claim. I am not satisfied that Lousick has established his claim to inventor status to the invention disclosed in the specification of 84712/91.
I therefore find that there is insufficient evidence to show that Lousick is a joint inventor of the excavating machine disclosed in the specification of application 84712/91, and for that matter disclosed in the specification of application PK5711.
Cahill was initially approached by Falkenhagen and Lousick with a view to fabricating some components of the digging machine, including the "slipper bearing" arrangement. In the end result Cahill constructed the entire prototype machine. The evidence indicates that the final prototype form of the digging machine benefited from Cahill's engineering knowledge and expertise, particularly given, and I accept Cahill's evidence on this, his suggestions about the brazed up bearing arrangement, the slide frame for moving the digging drum, and the offset/angled hinging of the drum halves. Cahill conceded in evidence that the nature of the bearing he suggested and the slide frame idea were elements that he had applied in other engineering works. Cahill did not claim to have conceived the idea of the split drum digging machine.
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.
Of the suggestions Cahill said he made I do not believe that they can be viewed as giving material advantages to the device. They may have led to a preferred workable embodiment but they did not seem to change the result contemplated by the original concept as brought to Cahill and when first discussed with him by Falkenhagen and Lousick. In my view the s.36 applicants have not established by their evidence the identity of an invention disclosed in the specification of application 84712/91 of which Cahill can rightfully claim inventorship.
I therefore find that there is insufficient evidence to show that Cahill is a joint inventor of the excavating machine disclosed in the specification of application 84712/91, and for that matter disclosed in the specification of application PK5711.
Thus to summarise the position on inventorship, from the evidence before me I am not satisfied that Lousick and Cahill are coinventors of the machine disclosed in the specification of application 84712/91, and for that matter disclosed in the specification of application PK5711. Furthermore,
I conclude from the evidence that Eric Alan Falkenhagen is the sole inventor of the excavating machine disclosed in the specification of application 84712/91, and for that matter disclosed in the specification of application PK5711.
entitlement to the invention
Whilst Polemate's claimed entitlement to the invention was primarily based on rights arising from the alleged coinventors Falkenhagen, Lousick and Cahill, their claim also covered the situation if only one or two of those mentioned were inventors. In brief, Polemate claims entitlement to the invention given agreements with Falkenhagen.
Summary of the events leading to the claim
Falkenhagen's patent application PK5711 was filed on 19 April 1991. According to Falkenhagen, he says he originally sent the application to Mike Beecher at QIC on 28 March, who returned it advising him to send it to the Patent Office. The patent documents however bear the typed date of 3 April and Falkenhagen appears to have written his original cheque on that day. From this it seems reasonable to conclude that Falkenhagen prepared the patent documents on or before 3 April 1991.
Lousick says in para 12 of his declaration that "during the second week of April, or thereabouts" Falkenhagen raised with him the issue of patenting the invention. Lousick says he paid Falkenhagen half the anticipated filing cost for an application, on Falkenhagen's request, and believed Falkenhagen would look after the application and file it in both their names. Lousick also says that he only became aware in October 1991 that Falkenhagen had filed patent application PK5711 on 19 April 1991. Falkenhagen disputes that Lousick paid half the cost of filing the provisional patent application.
Lousick's oral evidence about the patenting discussions was more detailed than his written evidence and indicated a different timing. Lousick said the initial discussion about patenting was early in the piece and prior to contacting Cahill - this places it before April 1991. He said he paid Falkenhagen half the filing cost in cash given, as he put it, "at that stage him and I were partners in it, which we had previously agreed to, partners in this invention". Further he said he understood from Falkenhagen that the application would be made in both names. He added that he did not see anything to do with the application until one day, when at Falkenhagen's house, he asked Falkenhagen and was directed to a copy. He said he remarked at the time that it was all in Falkenhagen's name but did not pursue it because it was around the time when they became involved with Stock and before forming the company and, as he put it, "... because we discussed that it would be transferred over to the company in its entirety, the whole thing, and he [Falkenhagen] said he would make arrangements ... to change everything around ... on formation of the company".
In the period before together meeting Cahill, it seems that the idea of making a prototype of the excavating machine had arisen with Falkenhagen and Lousick. Falkenhagen's evidence suggests he wanted to make a prototype whereas Lousick's evidence (paras 8-10) suggests that together they had discussed and decided to build a prototype. Before they met Cahill, a piece of bore casing was purchased which Lousick says he paid for and expected Falkenhagen to later pay him half the cost. Falkenhagen acknowledges that Lousick paid for the casing and does not dispute Lousick's claim that Falkenhagen said he would pay half (para 5/8d).
Lousick in para 9 says:
"... It became clear that to progress with the invention we would need to manufacture a prototype. It would be necessary to raise funds or obtain credit. Falkenhagen advised me that there was no way he could get credit in Cairns. He had been bankrupt in the past, ..... "
According to Falkenhagen, Lousick and he together met Cahill on 26 March. In para 5/10 Falkenhagen says the following:
"On the previous Monday, 25 March, 1991 Ron Lousick indicated to me that he would like to share in the commercialization of the machine and he would get the money required to build the machine if he was rewarded with a 50/50 deal. I agreed to this. This is why Cashcor invoiced Lousick and not myself.
d. At no time did I indicate to Ron Lousick that I would grant him a 50% interest in my invention in Australia or overseas. The deal discussed briefly and agreed upon in principle was the immediate commercialization of locally built machines made in accordance with my invention."
From the evidence, both written and oral, it seems clear that Cahill agreed to undertake work on a prototype because Lousick was involved in funding the work. Lousick had intended to sell his car for about $5000 to provide necessary funding on his part.
Lousick says that on 3 April 1991 he met and consulted Stock, whom he had known since 1959, regarding the financial side of what he was doing. On being told of the project, Stock first offered to lend Lousick $5000 but also offered to fund the prototype if he could obtain a third share in the project. Lousick's evidence implies that on 10 April Falkenhagen, Stock and he met to discuss Stock's offer and to discuss a partnership agreement. (Falkenhagen's evidence places the date as 3 April and indicates that Stock paid $1500 on 4 April for some parts for the prototype.) Falkenhagen says in para 5/13a:
"... I agreed that a partnership proposal to be (sic) drawn up for consideration, each to have a third share in the business to build machine. At no time did I indicate to either Stock or Lousick that they would be equal also in the patent. I had not assigned a 50% share in my invention to Ron Lousick and was not about to assign away 2/3 of my invention. What was discussed was the immediate commercialization of locally built machines made in accordance with my invention. Stock subsequently paid Cashcor for their work."
Falkenhagen's diary entry for 3 April 1991 includes the following entry regarding the meeting with Peter Stock:
"Meeting with Peter & Ron at Aussie Rules, Peter wants a 3RD of my invention and will initaly (sic) invest $10000
Ron had told him $5000 would be enough I said to him at least $10000, Peter said he would have a partnership agreement drawn up."
A draft partnership agreement is exhibited as RL6 to Lousick's declaration. Falkenhagen says in para 5/13b that this agreement "was no more than a standard partnership agreement and made no reference to ownership of patents or my invention." I also note that the draft agreement does not identify the intended business of the partnership. Subsequently, after further advice indicated that government funding may be available if the project involved a company, the parties did not proceed to finalise a partnership agreement and instead proposed to form a company.
In oral evidence Stock was asked about his initial involvement with Lousick and Falkenhagen. He said that Lousick first saw him and they discussed Lousick selling his car. Stock said he offered to loan Lousick $5000 and then, after hearing a bit more about the project, raised the possibility of financing the project. Stock said that a week later he first met Falkenhagen with Lousick at the Football Club in Cairns. About the meeting he said the following concerning his offer to provide finance:
"I said well look if I am going to finance it I would want a third share in it, the patent rights or whatever it is. .... We all agreed that this should happen. ..."
Following I summarise events by date sequence relating to the company Polemate Pty Ltd.
26 April 1991: Falkenhagen, Lousick and Stock held a meeting at 11am, and Stock took minutes. A copy of the typed minutes signed by all three is Exhibit RL7. The minutes read:
"Purpose of Meeting.
To discuss manufacture and marketing of a machine devised by E Falkenhagen and R Lousick for digging around piers & poles with a view to getting contracts with Electricity Boards or any other interested parties.
It was agreed that as E Falkenhagen & R Lousick had no
capital, that P Stock would provide a loan to manufacture machine, register company, apply for patent and to provide legal fees.
The amount of loan provided would approximate $30000.00. A further $40000.00 for the purchase of a Kubota Tractor would be provided.
These loans totalling approximately $70000.00 to be interest free in return for one third share of the company to be formed and is to be repaid when the company becomes viable.
That a company be formed styled [Promate] POLEMATE Pty Ltd and an application be lodged with the Commissioner of Corporate Affairs for registration.
That an application be lodged for Government grant, State or Federal."The deletion of Promate and the word POLEMATE are in handwriting.
Referring to this meeting Lousick says that:
"... It was agreed that a patent application in the name of the Applicant [Polemate] would be funded from the monies loaned by Stock to the Applicant and theat (sic) the patent would issue to the Applicant. ..." (para 14).
Falkenhagen in para 5/14 says the minutes "indicate the meeting was to `discuss manufacture and marketing of a machine' not the exploitation of a principle or invention." He also says the reference to the involvement of Lousick in devising the machine is correct only in that it relates to Lousick's efforts in assisting him in building a machine. Falkenhagen says he believes the meeting took place on the 22nd rather than 26th April since his diary indicates travelling to Atherton to test the machine with Lousick on 26 April. Falkenhagen's diary entry for 22 April refers to him contacting Stock about a shelf company which was for sale but with no mention of a meeting involving the three.
In oral evidence Stock was asked about the meeting of 26 April. He said he understood that they would form a company and that Falkenhagen would lodge a patent application in the company name, as soon as the name was decided. Asked whether at that meeting it was his understanding that a patent application had already been filed, Stock answered "Yes I think it was". However he was uncertain whether the loan mentioned in the minutes was to cover applying for a patent or paying for the patent if one had already been filed.
In evidence a little later, Stock confirmed his understanding that a condition of him loaning money was that any patent rights would be in the name of the company, adding that this had been agreed to.
29 April: Falkenhagen's diary entry indicates a meeting between Falkenhagen, Lousick, Stock and a solicitor about the formation of a company.
7 & 15 May: A shelf company Gradon Pty Ltd was acquired on
7 May, Falkenhagen, Lousick and Stock being equal and only shareholders and each a director. The company's name was changed to Polemate Pty Ltd on 15 May 1991.
20 & 22 May: Falkenhagen's diary entries refer briefly to meetings about "sale of polemate".
28 May: Lousick says the first meeting of the three shareholders of Polemate Pty Ltd took place on 28 May. A copy of the typed minutes signed by all three is Exhibit RL9. The minutes read:
"Documents tabled re Patent (Notice of Entitlement, Patent Request, Claim defining complete description). Documents lodged 27/5/91 with Spruson & Ferguson patent attorneys for patent throughout Australia at approximate cost of $1500.00.
....
....
It was agreed that as the company lacks the resources to fully exploit the potential of this machine that the patent rights be sold to a manufacturer with capacity to fully exploit, providing the price obtained is satisfactory to this company.
Due to the closeness of the end this financial year and the fact that E Falkenhagen has the contract with FNQEB TO complete that this company commence trading 1/7/91. All contracts from this date to be in the Name of Polemate Pty Ltd."
Lousick says in paras 16 & 17 that Falkenhagen advised the meeting that he had lodged all necessary documents relating to Polemate's patent application with Spruson & Ferguson, and that the cost would be approximately $1500. Exhibit RL10 is said to be a copy of the patent application documents presented by Falkenhagen at the meeting, the documents dated 27 May 1991 including a patent request (listing PK5711 as details of an associated provisional application), notice of entitlement, and some description sheets. Lousick says he noted with concern that Falkenhagen had been given as the sole inventor in the documents and when this was pointed out, Falkenhagen claimed that to be so. The documents also gave the applicant as Polemate but Falkenhagen as the Nominated Person - Lousick says that neither he nor Stock appreciated the significance of the latter reference. Lousick further says that Falkenhagen assured him and Stock that he, Falkenhagen, would take all necessary steps to ensure the patent issued in the name of the company Polemate.
In oral evidence Stock said he understood that the documents referred to at the meeting concerned a new patent application.
Falkenhagen says in para 5/16 that at no time did he indicate that he had instructed Spruson & Ferguson to file the application proposed and for which the request of 27 May 1991 was prepared. He said he had ascertained the cost from the attorneys. Further he says the company was prepared to proceed given the patent request tabled at the meeting, the company being nominated as the applicant as the company had agreed to cover the patent costs. He also says that he "initially had an obligation to provide the company with some form of licence to exploit the invention", but as no satisfactory agreement had been made, he had considered that another manufacturer would be better to exploit the invention and would have been happy to negotiate accordingly, "ensuring that Polemate was not out of pocket and unfairly treated in the process as they had shown initial strong support for my invention."
5 July: On this day a further meeting of Polemate was held. A copy of the typed minutes signed by all three directors is Exhibit RL11. The first 3 paragraphs refer to contract work, including one reference that "E Falkenhagen carry out work in his name and cover all expenses" and a possible leasing of the machine to Ian Falkenhagen. The last paragraph reads:
"Application for transfer patent from E Falkenhagen to Polemate Pty Ltd to be lodged. Eric Falkenhagen to attend and advise."
In oral evidence Stock acknowledged that he was aware, at this stage, that there was an application in Falkenhagen's name, and said he gained that knowledge from the documents Falkenhagen had previously tabled which showed Falkenhagen as inventor and beneficiary and Polemate as applicant.
In a second paragraph numbered 5/18, Falkenhagen refers to these minutes and says:
".... I deny ever agreeing to sign and (sic) document which would assign my patent rights. At that time I had cataracts on both eyes and was unable to read. Attached hereto and marked F14 is a letter from Dr N G Hamilton advising that I was unable to read without a magnifying glass before an operation on 10 October 1991.
If such a minute does exist and was signed by me I say that I must have been unaware of and unable to read the contents of the minutes at the date of signing.
If such a minute does exist and was signed by me and I was aware of the contents of the minutes at the date of signing, I say that the last paragraph was added after the date of signing."
29 July: A further meeting of Polemate was held at 9.30am on this day. Exhibit RL12 is said to be a copy of the typed minutes. These minutes are only signed by Stock and Lousick although Falkenhagen is listed as present. The last paragraph of the minutes states:
"It was decided that Eric Falkenhagen transfer patent to company name as agreed to in companys minutes 5/7/91. He refused to do this and stated that the other two directors could push him from the company. He produced a purported legal form for the other two directors to sign which would give him the right to push them from the company. Both P Stock & R Lousick refused to sign and the meeting was aborted at 11.00am."
In para 19 Lousick says Falkenhagen "produced to the meeting a document headed `Conditions Relating to Patent on Pole Extraction Device', being a form of licence agreement relating to the Patent. Falkenhagen's proposal ..... was rejected by Stock and myself. The proposal was completely inconsistent with the agreement previously reached by all parties."
Falkenhagen, in para 5/19 which allegedly refers to Lousick's para 19, says the minutes of "27/9/91" (sic) were not executed by him. He also says that "there was never an agreement by me to assign patent rights to Polemate Pty Ltd" and that "I did offer a conditional licence but they refused to negotiate ...".
Exhibit RL13 is said to be the document produced to the meeting by Falkenhagen. Given the conditions in the document, it seems it would have had the effect of leaving the patent in Falkenhagen's name but with licencing rights to Polemate.
31 August 1991: A further meeting of Polemate was held. Exhibit RL19 is said to be a copy of the typed minutes. These minutes are only signed by Stock and Lousick although Falkenhagen is listed as present. The minutes record various discussions about contracts for pole digging work, and reference to contacts with one Mal Lane. The minutes also record:
"E Falkenhagen resigned as a director of the company and tendered an already typed letter confirming this."
Falkenhagen does not refer to this meeting in his declaration nor to paragraph 25 of Lousick's declaration in which this meeting is raised.
Lousick's evidence also includes several exhibits covering communications between Falkenhagen and Spruson & Ferguson and subsequently between Spruson & Ferguson and Stock. A summary of these exhibits follow.
Exhibit RL14: Exhibited are copies of 2 letters both from Falkenhagen to Spruson & Ferguson. The first is a facsimile cover sheet sent on 27 May 1991 indicating a transmission of 6 pages. The sheet is headed Polemate Pty Ltd and that name is also written under the "FROM: ERIC FALKENHAGEN" line. The subject of the transmission is "RE: APPLICATION FOR COMPLETE PATENT". The second letter is typed, dated 30 May 1991 and headed Polemate Pty Ltd and that name also appears in the signature block of "E FALKENHAGEN (Director)". The letter reads:
"As requested I am enclosing photographs of our implement for boring around standing poles as per our provisional application PK5711.
Complete drawings will be forwarded to you as soon as complete within fourteen days.
..... "
Lousick says in para 20 that the drawings referred to by Falkenhagen were technical drawings of the invention which Stock had commissioned from a draftsman on behalf of Polemate, which Polemate paid for, and which were supplied to Falkenhagen to send to Spruson & Ferguson.
Falkenhagen's diary entry for 6 June refers to contact with a patent attorney at Spruson & Ferguson re patent.
Exhibit RL15: This is a copy of a letter from Spruson & Ferguson to Polemate, attention Eric Falkenhagen, dated 13 June 1991 and includes a draft provisional patent specification for an invention entitled "Pole Extraction Apparatus" with applicant listed as Polemate Pty Ltd. The letter seeks approval of the draft copy prior to formal filing at the Patent Office. An account also accompanied the letter and is also exhibited.
Lousick says in para 21 that only Falkenhagen had access to the private postal address for Polemate on the letter and that he and Stock "did not see or learn of the fact that Spruson & Ferguson had drawn the complete (sic) specification and required instructions to lodge it. Falkenhagen did not divulge this to us, ....".
Exhibit RL16: This is a copy of a letter from Spruson & Ferguson to Stock sent to Stock's address and dated 29 July 1991. The letter refers to enclosing copies of Spruson & Ferguson's letter of 13 June to Polemate, the debit note, and the draft specification.
Exhibit RL17: This is a copy of a letter from Spruson & Ferguson to Polemate, attention Eric Falkenhagen, dated 2 August 1991 seeking approval for the previously sent draft. This letter was sent to Polemate at the private postal address.
From paras 5/21, 5/22 and 5/23 of his declaration Falkenhagen says that as Spruson & Ferguson had prepared a provisional rather than a complete specification he lacked confidence in them and this was why he had delayed his response and not responded.
Exhibit RL18: This is a copy of a letter from Eric & Susan Falkenhagen to Spruson & Ferguson dated 26 August 1991. It comprises a facsimile cover sheet indicating a transmission of 8 pages. There is no reference to Polemate Pty Ltd on the sheet. The subject of the transmission is "RE: DRAFT SPECIFICATIONS" and the message reads:
"Changes to draft patent specifications for a complete patent to be lodged.
Complete patent to be in the names of Eric Alan & Susan Margaret Falkenhagen."
Lousick says in para 24 that he believes that Spruson & Ferguson refused to act on the instructions in the letter because their client was Polemate.
Falkenhagen in para 5/24 says that as negotiations between him and Polemate had broken down, he decided to take action to protect his interests, particularly ensuring that any patent application was not filed in the name of Polemate Pty Ltd.
Exhibit RL20: This is a copy of the complete specification of application 84712/91. Patent Application 84712/91 linking to application PK5711 was filed on 25 September 1991 by Falkenhagen. Application 84712/91 was not filed via any firm of patent attorneys nor do the filing documents bear any reference to a patent attorney. The address for service given at filing coincided with the address for Falkenhagen who was given as applicant.
Lousick says in para 27 that the specification of application 84712/91 is identical with the draft specification prepared by Spruson & Ferguson for Polemate at its cost, and that the two drawings to application 84712/91 are technical drawings commissioned by Spruson & Ferguson and derived from drawings furnished to them by Polemate, and in fact the word "Polemate" appears on Fig 1.
Falkenhagen in para 5/27 says that the specification is not identical to the provisional specification prepared by Spruson & Ferguson, and that his diary entry of 28 March indicates the selection of the name POLEMATE which was used thereafter to identify the machine.
A comparison of the specification and drawings of 84712/91 with the draft specification and drawings prepared by Spruson & Ferguson and exhibited as Exhibit RL15 reveals only the following differences, apart from layout:
a)Each page of the specification has the heading "THE CLAIMS DEFINING THE INVENTION ARE AS FOLLOWS:".
b)The title is different.
c)Three extra words appear in the first paragraph.
d)Two extra sentences appear at the end of the description.
e)A sheet having five claims is included.
Submissions
The main points of Mr Fisher's submissions on the entitlement issue I summarise following:
a)The clear understanding of Lousick and Stock was that patent rights should rest with Polemate, and steps were taken to ensure this resulted upon discovery that a patent application had allegedly been filed.
b)The evidence of Lousick referring to correspondence between Falkenhagen and Spruson & Ferguson indicates the conduct of Falkenhagen in this matter and his complete lack of credibility in terms of his statements. Despite Falkenhagen's lack of confidence in Spruson & Ferguson he used their drafted specification in compiling the specification for application 84712/91.
c)There are largely uncorroborated statements of Falkenhagen as against statements of Lousick and Stock supported by evidentiary material which are more than persuasive in terms of showing the intention of the parties that Polemate should be the party entitled to commercially exploit the invention and hold the intellectual property rights.
d)Polemate was always entitled to be applicant and nominated person. Alternatively, there was an agreement to assign between the parties.
Decision on entitlement
It is clear from s.15 of the Patents Act 1990 that an inventor is an eligible person in relation to an invention. However s.15 also specifies other persons who may be granted a patent and, insofar as the present matter is concerned, it includes a person who derives title to an invention from the inventor. It is this latter provision on which Polemate rely for being declared an eligible person in relation to the invention disclosed in the specification of application 84712/91.
The evidence before me is not without differing views on such things as certain events, what the understanding was when Stock offered finance, on what basis the company Polemate was established, and what happened at certain times between April and August 1991 involving the three directors of Polemate. As a consequence the facts surrounding the formation of Polemate and involvement of Polemate in the invention are uncertain. Thus in deciding on the entitlement question, where facts are disputed I believe it is appropriate that I reach a conclusion on an issue on the balance of probabilities.
Falkenhagen and Lousick
Before meeting Cahill or Stock, Falkenhagen and Lousick had agreed to a 50/50 deal concerning the machine. Falkenhagen says he agreed with Lousick to a 50/50 deal to commercialize the machine. Lousick's evidence about events prior to meeting Cahill give support for a conclusion that Falkenhagen and Lousick together set out to develop the machine by making a prototype with Lousick funding or agreeing to fund initial purchases of material or engineering services. What is uncertain is whether the deal included any share of any patent rights to the invention. There is conflicting evidence from Falkenhagen and Lousick about Lousick's involvement with patenting the invention. In view of my considerations following I do not need to decide whether Falkenhagen and Lousick had agreed to share patent rights to the invention.
Falkenhagen, Lousick and Stock
Lousick introduced Stock to Falkenhagen, which according to Falkenhagen's evidence was on 3 April 1991. It is clear from the evidence that an agreement was reached whereby Stock would (at least) fund the prototype in return for a third share in a partnership involving the three, all having equal shares. It seems that whatever deal Falkenhagen and Lousick may between them have arrived at before this time was subsumed within the agreement involving Stock. Falkenhagen says that the proposal involved sharing in the business of building machines, and the immediate commercialization of locally built machines. Stock's oral evidence indicated that he believed the third share included all aspects of the project including patent rights. Falkenhagen's diary entry for 3 April 1991 records "... Peter [Stock] wants a 3RD of my invention ...", which to me suggests something embracing more than an involvement in building machines as Falkenhagen has declared, including an involvement consistent with what Stock declared.
The evidence indicates that it was initially intended to formalise the agreement reached in a partnership agreement but this was not concluded as the formation of a company involving the three was later proposed and explored. A meeting was held on 26 April 1991 at which various matters concerning the proposed company formation and financial aspects were considered. The minutes of this meeting, which I have quoted earlier in full, were signed by the three present. There are some differences between those present of their understanding of matters discussed and agreed, however I believe the evidence suggests a high probability that in return for the finance, Stock would get a third share of the proposed company and that the company would benefit from any machine manufactured and any patent application made in respect of the invention. Falkenhagen, Lousick and Stock became equal and only shareholders of a company on 7 May 1991, renamed Polemate Pty Ltd on 15 May 1991.
The first meeting of the three shareholders of Polemate took place on 28 May 1991. The minutes of this meeting were signed by the three present. These minutes refer to the tabling of certain patent documents (by Falkenhagen), and also refer to selling the patent rights in these terms:
"It was agreed that as the company lacks the resources to fully exploit the potential of this machine that the patent rights be sold to a manufacturer with capacity to fully exploit, providing the price obtained is satisfactory to this company."
Again there are differences in the evidence of those present as to their understanding of matters concerning the tabled patent documents. Exactly what dealings Falkenhagen had with these documents, eg. whether he lodged them with Spruson & Ferguson as the minutes record, is not clearly evident from the evidence. Falkenhagen's diary pages for 28-31 May 1991 are not exhibited but an entry for 6 June 1991 records a contact with an attorney at Spruson & Ferguson "re patent" and that "he said it was a good one". Exhibit RL14 to Lousick's declaration includes copies of 2 letters, dated 27 and 30 May 1991, sent by Falkenhagen to Spruson & Ferguson regarding a patent, both letters bearing reference to "Polemate Pty Ltd" as a heading and under the name of Falkenhagen. Even if the particular documents tabled at the meeting were not sent by Falkenhagen to Spruson & Ferguson, the evidence shows that Falkenhagen had a number of communications with Spruson & Ferguson about patenting around that time, which communications, on the face of it, purported to be on behalf of Polemate. It is clear that Spruson & Ferguson believed that Polemate was at least the applicant of the proposed patent application as is evidenced by Exhibit RL15.
Several other points arise from the meeting of 28 May and the minutes. Lousick says that Falkenhagen assured him and Stock that he, Falkenhagen, would take all necessary steps to ensure the patent issued in the name of the company Polemate. Falkenhagen however says the company was prepared to proceed given the documents tabled, the company being the applicant. However I believe the evidence supports Lousick's claim that the patent rights were to vest with the company for these reasons. Firstly, the minutes of 28 May 1991 refer to it being agreed to sell the patent rights "providing the price obtained is satisfactory to this company". This alone suggests the company considered the patent rights as its property to exploit. Secondly, the minutes of subsequent meetings of 5 and 29 July 1991 refer to transferring the patent from Falkenhagen to Polemate, something which is consistent with the understanding of both Lousick and Stock regarding the position of patent rights at 28 May 1991, and consistent with Stock's statements as to the basis for him agreeing to get involved with the project and the company, ie. that he get a third share in the project including patent rights.
As I have mentioned, the minutes of the 28 May meeting refer to selling "the patent rights". There is no evidence elaborating on this resolve of the company shareholders. To me it strongly indicates that the company believed it had patent rights that it could sell, a belief which is consistent with understandings of Lousick and Stock at the time of the company's formation. These minutes bear Falkenhagen's signature and it is somewhat surprising that he signed the minutes which refer to selling patent rights if, as his declaration implies, he had not agreed to assign his invention and rights thereto to Polemate. Also, Falkenhagen's statements in para 5/16 about providing "some form of licence" to Polemate to exploit the invention is at odds with the resolve of the company shareholders.
A final point about the 28 May meeting concerns the tabled patent documents, Exhibit RL10 said to be a copy. Falkenhagen has not disputed that this exhibit includes a copy of the tabled documents. There are two issues of interest.
(a)The copy of the patent request included in this exhibit lists number PK5711 as details of an associated provisional application, which application at the time was solely in Falkenhagen's name. The request bears a handwritten signature of "E A Falkenhagen". Also I note that the letter of 30 May 1991 of Exhibit RL14 sent by Falkenhagen to Spruson & Ferguson, purportedly on behalf of Polemate, has a reference to "our provisional application PK5711". In view of these references to application PK5711, I believe it is reasonable to conclude that a patent application proposed and/or made on behalf of Polemate for the invention, as indicated in the minutes of the 28 May 1991 meeting, was entitled to be associated with Falkenhagen's application PK5711 and thus entitled to any priority rights arising from it.
(b)The copy of the notice of entitlement included in this exhibit and presumably relevant to the patent request of the exhibit states in part:
"I, POLEMATE PTY LTD
of PO BOX 624 EARLVILLE 4870 QLD
being the applicant in respect of application No PK5711, state the following:-
The person(s) nominated for the grant of the patent:
has, for the following reasons, gained entitlement from the actual inventor(s):
FORMATION OF PTY LTD COMPANY ".
The portions shown above in bold have been inserted by typing on a pro forma notice of entitlement form. Firstly of note is that Polemate is stated as the applicant for application PK5711, which at the time was an incorrect statement unless it reflected Polemate's right to that application. Secondly the next reference to entitlement is a curious one given that the request form in Exhibit RL10 gave the "nominated person" and "actual inventor" as "E A Falkenhagen". To me the statement only makes sense if the person completing the form at the time (Falkenhagen it seems) misunderstood the reference to "person(s) nominated for the grant" believing it referred to the applicant (Polemate Pty Ltd) and if Polemate had entitlement to the invention from the inventor (Falkenhagen) due to the formation of the company, ie. by assignment. In respect of both references discussed, the possible interpretations I have given are not inconsistent with the understanding of both Lousick and Stock concerning patent rights for the company prior to 28 May 1991.
A further meeting of the three shareholders of Polemate took place on 5 July 1991. These minutes include:
"Application for transfer patent from E Falkenhagen to Polemate Pty Ltd to be lodged. Eric Falkenhagen to attend and advise."
This paragraph is consistent with evidence of Lousick (paras 17 & 18) that Falkenhagen had assured him and Stock that the necessary steps would be taken to ensure that the patent would issue in the name of Polemate. The minutes seem to formally record for necessary action what at least Lousick and Stock had previously understood would occur concerning a patent. Although Falkenhagen's signature is on these minutes with those of Lousick and Stock, in his evidence he claims either the document does not exist, or he didn't sign it, or material was added, or he couldn't read what he signed. The original of these minutes was sighted by a handwriting expert nominated by Falkenhagen and nothing has been placed in evidence tending to doubt the authenticity of the document in any respect. Furthermore, even if Falkenhagen's sight was impaired at the relevant time, given that he signed the minutes I believe it is reasonable to conclude that he was aware of their contents, and by signing agreed with them. Thus there is no basis for me to doubt the authenticity of these minutes or Falkenhagen's knowledge of them or their content.
The evidence before me suggests that a further meeting of Polemate took place on 29 July 1991. The purported minutes of this meeting (Exhibit RL12) record a decision for Falkenhagen to "transfer patent to company name as agreed to in companys minutes 5/7/91". Although Falkenhagen is recorded in the minutes as present, his signature is not on the minutes. In his declaration Falkenhagen notes that the minutes were not signed by him, but his declaration is silent about whether he was at the meeting. In my view the evidence suggests a high probability that the meeting took place with Falkenhagen present and that the minutes accurately record what happened.
From the evidence of Lousick (see para 22 and Exhibit RL16) it seems that only at the end of July or early August 1991 did Stock and Lousick become aware that a patent application, as referred to at the 28 May 1991 meeting, was still to be filed - it seems the patent attorneys were awaiting approval of the draft specification from Falkenhagen on behalf of Polemate.
A further meeting of the company is said to have taken place on 31 August 1991. Again the minutes (Exhibit RL14) record Falkenhagen as being present and entries refer to him reporting on and saying things, but his signature is not on the minutes. These minutes do not include any mention of patent rights although the minutes record Falkenhagen as reporting, after being asked by Lousick, that the fee of the patent attorneys Spruson & Ferguson had been paid. They also indicate that Falkenhagen resigned as a director of the company.
Falkenhagen's diary pages submitted in evidence do not include any entries to confirm that the meetings of 26 April, 28 May,
7 July and 29 July 1991 took place, there being no diary page for 28 May exhibited. However I have no reason to doubt that the meetings as discussed took place on these dates as the signed minutes record and that the minutes accurately record what happened.
In October 1991 Polemate was advised by its Sydney solicitors that a patent application (No. 84712/91) had been filed on 25 September 1991 linking to application PK5711 filed on 19 April 1991 by Falkenhagen. It is clear that the specification for this application is primarily based on the draft specification prepared by Spruson & Ferguson and sent to Polemate in June 1991 (see Exhibit RL15). Consequently I believe there is a clear link between patent application 84712/91 and events involving Falkenhagen, Lousick, Stock and Polemate concerning the invention.
From the foregoing assessment of the evidence, I have drawn the following conclusions:
1.That meetings involving Falkenhagen, Lousick and Stock took place on 26 April, 28 May, 7 July and 29 July 1991 as the signed minutes record and that the minutes accurately record what happened.
2.I believe the evidence relating to the 26 April 1991 meeting and Falkenhagen's diary entry for 3 April 1991 that "... Peter wants a 3RD of my invention ..." together suggest a high probability that in return for the finance, Stock would get a third share of the proposed company and that the company would benefit from any machine manufactured and any patent application made in respect of the invention.
3.That the evidence relating to the 28 May 1991 meeting and events therearound
(a) show that Falkenhagen had a number of communications with Spruson & Ferguson about patenting around that time, which communications, on the face of it, purported to be on behalf of Polemate, and
(b) support Lousick's claim that the patent rights were to vest with the company.4.That the evidence relating to the meetings of 5 and 29 July 1991 about transferring the patent from Falkenhagen to Polemate are consistent with the understanding of both Lousick and Stock regarding the position of patent rights at 28 May 1991.
5.I believe there is a clear link between patent application 84712/91 and events involving Falkenhagen, Lousick, Stock and Polemate concerning the invention.
Given the evidence before me and in the light of the above conclusions I have further concluded that on the balance of probabilities, Falkenhagen entered into an agreement with Lousick and Stock which resulted in Polemate Pty Ltd becoming the beneficial owner of all rights to the excavating machine being the invention disclosed in the specification of patent application 84712/91.
I have reached these conclusions mindful of the main thrust of Falkenhagen's evidence which is that he never agreed, or intended, to transfer patent rights to his invention to either Lousick, initially, or later to Lousick and Stock or to Polemate, and that the arrangements with Lousick and Stock, and later with Polemate, were only in sharing in a business to build and market the machines of the invention. In my view the evidence overall provides strong evidence contrary to those claims by Falkenhagen.
The nominated persons of record for application 84712/91 are Trevor Julius Falkenhagen, Eric George Falkenhagen and Andrea Susan Batten ("the Falkenhagens"). Based on the evidence before me and my conclusions,
I find that on the balance of probabilities Polemate Pty Ltd is the beneficial owner of all rights to the excavating machine being the invention disclosed in the specification of patent application 84712/91 arising from agreements entered into between Ronald William Lousick and Geoffrey Peter Stock and the actual inventor Eric Alan Falkenhagen and on or prior to 28 May 1991.
I further find that on the balance of probabilities the Falkenhagens are not eligible persons in relation to the excavating machine being the invention disclosed in the specification of patent application 84712/91 and that Polemate Pty Ltd is the sole eligible person in relation to the invention as so disclosed.
As I have indicated earlier in this decision, the disclosure in provisional patent application PK5711 relates to the same excavating machine as in complete patent application 84712/91. Thus, given that application 84712/91 is associated with application PK5711 and that application PK5711 was filed on 19 April 1991, which was after the first agreement discussions between Falkenhagen, Lousick and Stock, I believe that it is appropriate in the circumstances for me to also make the following finding in relation to application PK5711.
I find that on the balance of probabilities Polemate Pty Ltd is the beneficial owner of all rights to the excavating machine being the invention disclosed in the specification of patent application PK5711 and is the sole eligible person in relation to the invention as so disclosed.
Declaration under s.36(1)
In view of my findings, I am in a position to make a declaration as provided by s.36(1) in respect of application 84712/91. However, s.36(2) makes it clear that the Commissioner must not make a declaration without first giving the nominated person a reasonable opportunity to be heard. As I have mentioned earlier in this decision, the hearing was set for 7 December 1994 following confirmation on behalf of Polemate et al, and confirmation by Mr Eric Falkenhagen on behalf of the patent applicants, the Falkenhagens, who are also the nominated persons of record for application 84712/91. There was no attendance at the hearing by the Falkenhagens or anyone on their behalf. In those circumstances I believe the nominated persons have had a reasonable opportunity to be heard in this matter and I propose to make an appropriate declaration under s.36(1).
I make the following declaration under s.36(1):
Pursuant to s.36(1), I declare that POLEMATE PTY LTD is the sole eligible person in relation to the excavating machine being the invention disclosed in the specification of patent application 84712/91.
S.36(4) provides that an "appeal lies to the Federal Court against a decision by the Commissioner under this section."
Given the above declaration, the provisions of s.36(3) are available to Polemate. That section provides:
"(3) If a complete application is made under section 29 by a person so declared, the priority date of the claims of a patent granted to the person for the invention must be determined under the regulations."
Reg 3.8 requires that an application of the kind described in s.36(3) be made within 3 months from the date of the declaration of the Commissioner under s.36(1). Reg 3.13 provides for the priority date of a claim of a specification of an application so made. Mr Fisher referred to the fact that Polemate had filed a patent application on 16 April 1992 (International application PCT/AU92/00169) claiming priority from AU provisional application PK5711, and that AU patent application 16610/92 was the Australian national application arising from PCT/AU92/00169. Whilst it seems that application 16610/92 may qualify as an application within the terms of s.36(3), I believe Polemate would need to request in writing that application 16610/92 be so treated by the Commissioner and provide an amended patent request which refers to the applicant as an eligible person under s.36 and identifies the actual inventor in accordance with my findings earlier in this decision. Alternatively it is open for Polemate to file a new patent application under s.29 within the time prescribed in reg 3.8.
In the absence of any appeal to this decision, the position with regard to application 84712/91 is this. The application is in force by way of continuation fees until 25 September 1995. An examiner's first examination report issued on the application on 7 April 1993 and has not received a response. Pursuant to s.142(2)(e) and reg 13.4(1)(g), application 84712/91 will lapse if not accepted within a period of 3 months from the date of this decision. However, in line with my declaration under s.36(1), application 84712/91 cannot be accepted whilst the Falkenhagens remain as nominated persons on the request for the application. Any action by the Falkenhagens to request to amend application 84712/91 to identify Polemate Pty Ltd as the nominated person should be with the knowledge and agreement of the directors of Polemate Pty Ltd.
Relevance of decision to other related patent applications
The present matter has specifically concerned application 84712/91. However, given the disclosure of provisional application PK5711 and its association with application 84712/91, I have also made a finding concerning application PK5711.
Several other patent applications and a petty patent are related, or have links, to application 84712/91. Firstly, AU petty patent 630857 (application 20750/92) arose as a divisional application of 84712/91. Secondly, application PCT/AU92/00518 claims priority from AU 84712/91 and AU 20750/92. Thirdly, AU application 26856/92 is the Australian national application arising from PCT/AU92/00518. Given the close links between application 84712/91 and these other patent filings, my findings in respect of application 84712/91 may provide a basis for any findings involving similar considerations concerning those other related patent filings by Falkenhagen or the Falkenhagens.
CONCLUSION
I have found that:
.there is insufficient evidence to show that Lousick is a joint inventor of the excavating machine disclosed in the specification of application 84712/91, and for that matter disclosed in the specification of application PK5711;
.there is insufficient evidence to show that Cahill is a joint inventor of the excavating machine disclosed in the specification of application 84712/91, and for that matter disclosed in the specification of application PK5711;
.from the evidence Eric Alan Falkenhagen is the sole inventor of the excavating machine disclosed in the specification of application 84712/91, and for that matter disclosed in the specification of application PK5711;
.on the balance of probabilities Polemate Pty Ltd is the beneficial owner of all rights to the excavating machine being the invention disclosed in the specification of patent application 84712/91 arising from agreements entered into between Ronald William Lousick and Geoffrey Peter Stock and the actual inventor Eric Alan Falkenhagen on or prior to 28 May 1991; and
.on the balance of probabilities Trevor Julius Falkenhagen, Eric George Falkenhagen and Andrea Susan Batten are not eligible persons in relation to the excavating machine being the invention disclosed in the specification of patent application 84712/91 and that Polemate Pty Ltd is the sole eligible person in relation to the invention as so disclosed.
I have also made the following declaration:
.Pursuant to s.36(1), I declare that POLEMATE PTY LTD is the sole eligible person in relation to the excavating machine being the invention disclosed in the specification of patent application 84712/91.
COSTS
Polemate asked for costs in this matter. The usual rule is that costs follow the event. I have found in favour of Polemate's claim that it is the beneficial owner of the rights to the invention of application 84712/91 and I have made a declaration in its favour under s.36(1). I see no reason why Polemate should not be entitled to its costs in this matter. Accordingly I award costs in accordance with Schedule 8 of the Patent Regulations against Trevor Julius Falkenhagen, Eric George Falkenhagen and Andrea Susan Batten and in favour of Polemate Pty Ltd.
Trevor Bruhn
Delegate of the Commissioner of Patents
Address for service for the applicants : C/- Eric Falkenhagen PO Box 624
Earlville
Cairns QLD 4870Patent attorneys for the s.36 applicants : Fisher & Kelly, Brisbane
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