Firebelt Pty Ltd v (N/A)

[1998] APO 12

official notice

decision of a deputy commissioner of patents

Patent Application               :          17769/95, and Patent 652523

Action:          Requests under s.223 to pay a continuation and a renewal fee in respect of each

Decision:          Issued            .

Abstract

Extensions refused

The application and patent were assigned during the grace period. It was argued that the restrictions of r.22.11(3)(b) regarding the application of s.223 only applied to the applicant of record or to the patentee appearing in the Register – but not to an equitable owner.

This was rejected on the basis that where an equitable owner is able to take action under the Act, they are subject to the same statutory obligations and restrictions as a legal owner taking those actions. Accordingly the exclusion of r22.11(3)(b) applied to the s.223 requests.

Additionally, if r.22.11(3)(b) was construed so as not to apply to an equitable owner, then regulations 13.3 and 13.6 must also be interpreted as not applying to an equitable owner – in which case there was no period prescribed for the equitable owner to pay the fees, and therefore no period to extend under s.223.

patents act 1990

decision of a deputy commissioner of patents

Re:Patent Application 17769/95, patent 652523, and requests under s.223 by Firebelt Pty Limited to pay a continuation and a renewal fee in respect of each.

background

Patent application 17769/95, and patent 652523, are currently recorded as being in the name of Formark Pty Ltd (Formark), and have been for all relevant periods. Both the application and the patent are divisionals from a common parent. As a result the annual fees fall due on the same date – 7 July each year. The annual fee due 7 July 1996 were not paid by that date (nor in the subsequent grace period). Consequently the application lapsed, and the patent ceased, as of that date. On 30 January 1997 Firebelt Pty Ltd (Firebelt) applied under s.223 for an extension of time to pay the renewal fees.

From the material filed by Firebelt, it appears:

• at all relevant times, Formark was in the hands of a “Receiver and Manager”;

• there had been a dispute over intellectual property rights, including a request under s.36, between Formark and Rico Recovery Systems Aust Pty Ltd (Rico). Settlement negotiations resulted in an assignment of several patents and patent applications from Formark to Rico ‘or its nominee’. Firebelt is apparently Rico’s nominee;

• on 22 October 1996 (after the anniversary date) the patent attorney for Rico obtained a status report. The attorney declares:

  “Although I obtained status reports prior to the Assignment I only checked the numbers in the Schedule prior to the final assignment being executed.”

• the assignment documents were executed on 14 November 1996. Initially incorrect copies were sent to the attorney. The attorney received the correct copies of the assignment on 7 January 1997 (coincidentally, the last day of the so-called ‘grace period’ for paying the annual fees.)

• the attorney initiated action to obtain a status report on the applications and patents on 15 Jan., and on 27 Jan recognised that the fees on these applications had not been paid.

Subsequently Firebelt filed requests under s.223 to pay the ‘maintenance fees’. Following correspondence between the Commissioner and Firebelt, the matter was set for hearing on 16 February 1998. Firebelt appeared by phone, and was represented by Mr T Dredge, patent attorney of Intellpro, Brisbane.

Errors before the anniversary date

It is noteworthy that the hearing proceeded on the basis of there not being any relevant error or omission before the anniversary. If there was such an error or omission, s.223 might be enlivened with respect to the anniversary date, and the application of r22.11(3) would not be relevant. Accordingly, for completeness I need to consider whether there is any evidence of a relevant error or omission before the anniversary.

The material filed in support of the request includes a declaration by Peter Walker, who was appointed the Receiver and Manager of Formark on 24 May 1996 – ie before the relevant anniversary date. He declares that “Formark’s directors and patent lawyer retained by Formark had not brought to my attention any outstanding fees in respect of the patents”; and “If I had been made aware of that requirement (to pay the fee) before 6 June 1996, I would have taken steps to ensure that the fees were paid before that date.” However this does not establish the existence of any causative error or omission beyond the mere fact that the fee was not paid.

Further, Walker declares “Additionally, I was of the view that upon assignment of the patents, entitlement to pay any fees, including the fees now known as due 6 June, 1996, would automatically pass on to the purchaser who could assume responsibility for payment.” In my view this is consistent with there being no intention on the part of Formark or its receiver to pay the fee before 6 June 1996.

Accordingly, and consistent with the manner in which the case was argued at the hearing, I am satisfied that there was no relevant error or omission prior to the anniversary date of the application and the patent.

Statutory provisions

This matter concerns several provisions of the Patents Act 1990, and the regulations thereto. Given the nature of the submissions by Firebelt, it is appropriate to reproduce those provisions.

142. (2) A complete application for a standard patent lapses if:

(d)the applicant does not pay a continuation fee for the application within the period prescribed for the purposes of this paragraph;

143. A standard patent ceases if the patentee:

(a)does not pay a renewal fee for the patent within the prescribed period;

13.3 (1)  Subject to this regulation, for the purposes of paragraph 142 (2) (d) of the Act (“lapsing of applications”), the period of 12 months ending at the end of an anniversary of the date (being an anniversary specified in column 2 of item 7 of Part 2 in Schedule 7) that would be the date of the patent if a patent were granted on the application is prescribed for the payment of a continuation fee.

(3) If a continuation fee is not paid in the period referred to in subregulation (1), but is paid within 6 months after the anniversary concerned, the prescribed period is extended to the day on which the fee is paid.

13.6 (1)  For the purposes of paragraph 143 (a) of the Act (“ceasing of patents”), subject to subregulation (2), the period of 12 months ending at the end of an anniversary of the date of the patent (being an anniversary specified in column 2 of item 7 or 8 of Part 2 in Schedule 7) is prescribed for the payment of renewal fee.

(3) If a renewal fee is not paid in the period referred to in subregulation (1), but is paid within 6 months after the anniversary concerned, the prescribed period is extended to the day on which the fee is paid.

223. (2) Where, because of:

(a)an error or omission by the person concerned or by his or her agent or attorney; or

(b)circumstances beyond the control of the person concerned;

a relevant act that is required to be done within a certain time is not, or cannot be, done within that time, the Commissioner may, on application made by the person concerned in accordance with the regulations, extend the time for doing the act.

(11) In this section:

"relevant act" means an action (other than a prescribed action) in relation to a patent, a patent application, or any proceedings under this Act (other than court proceedings), and includes the making of a Convention application within the time allowed for making such applications.

22.11(3)For the purposes of the definition of "relevant act" in subsection 223 (11) of the Act, each of the following actions is prescribed:

(b)paying a fee in a period that is extended because of subregulation 13.3 (3) ("prescribed period: continuation fees") or subregulation 13.6 (3) ("time for payment of renewal fee for standard patent").

Submissions

The matter of whether an extension of time under s.223 is available to pay a renewal fee or continuation period, where the relevant error occurs after the anniversary date, has been the subject of two recent decisions of the Commissioner - re Foldi et al 38 IPR 131, and re Beckswift [unreported decision on patent 614373, issued 12 Nov 1997.]

Mr Dredge argued that the circumstances of this case are distinguished from these decisions, through the facts surrounding the assignment. He notes that r13.3(3) and 13.3(1) are prescribed for the purposes of s142(2)(d) [and similarly re R13.6 and s.143(a)] which refers to the applicant [patentee] being required to pay the relevant fee. He then argues:

• The implementing regulations ... are limited in their action by the definition in Sections 142 and 143 specifying that the entitlement or power of control over the patent in terms of payment of the continuation and renewal fees is vested in the Register and therefore “the applicant” and “the patentee” only.

• Thus the “prescribed action” and benefit of the grace period is vested in the patentee and the applicant only.

• Firebelt became a person concerned when it became the owner. Formark ceased to be a person concerned at this time

• Since Firebelt Pty Limited is not “the applicant” in respect of application number 17769/95 nor the “patentee” in respect of patent number 652523 but qualifies as a person concerned under s.223, its required act of paying the fees by 7 January 1997 to avoid a disadvantage must be a “relevant act” thus enlivening section 223(2)(a)

As I understand this submission, Firebelt is entitled [following AB Scaniainventor v Commissioner of Patents (1981) 36 ALR 101] to the beneficial application of s.223 to allow them to pay the annual fee. However, the regulations relating to the payment of the annual fee are dependant upon s 142 & 143, which refer to the applicant and patentee. Consequently, because Firebelt was not recorded as the applicant or patentee, their request for an extension of time was not subject to the exclusion effected by r 22.11(3)(b).

Discussion

It is not unusual for a equitable owner of a patent to make a request under s.223. In such circumstances, the Commissioner recognises the equitable interests of the person. However processing of the request is made conditional upon the filing of a request to record the transfer of interest from the person appearing in the Register as the patentee to the equitable owner – so that at the time of restoration the equitable owner is recorded as the legal owner. That is the situation in the present case.

Firebelt contend that, as the equitable owner of the application and the patent, they are entitled to the beneficial application of s.223. Subject to the above, I do not disagree.

Firebelt acquired their interest in the application and patent during the grace period. At the time they acquired the interest, the annual fees had not been paid. There is no evidence of any error or omission before the anniversary date, by any person then having any legal or equitable interest in the application or patent. Consequently there is no basis to apply s.223 to extend the date for paying the annual fee from the anniversary date to the date the fees were paid.

If in the circumstances s.223 cannot be used to extend the anniversary date, the only other date that can be extended is the date that arises through the application of r13.3(3) and 13.6(3). The difficulty Firebelt is then faced with, is the application of r22.11(3)(b). Both Foldi and Beckswift (supra) discuss the application of s.223 to this situation, and both conclude that s.223 is not available.

The argument of Firebelt is that regs 13.3 and 13.6 implement s.142(2)(d) and 143(a) of the Act; that these specifically refer to the applicant and patentee respectively; therefore the restrictions of r.22.11(3)(b) are likewise limited to the applicant and patentee; and since Firebelt was not the applicant or patentee, r 22.11(3)(b) does not apply to them.

I do not agree with this submission. I think (and as might be inferred from Stack v Brisbane City Council 35 IPR 296) that where an equitable owner is able to take action under the Act, they must be subject to the same statutory obligations and restrictions as a legal owner taking those same actions (unless the Act makes the contrary intention clear). Thus a person applying under s.223 as the equitable owner is subject to the same statutory obligations and restrictions as the legal owner is subject to. That is, I consider r.22.11(3)(b) applies to the request by Firebelt as if Firebelt was in fact the applicant and patentee. But in any event, I think the argument of Mr Dredge is fundamentally flawed. Mr Dredge argues that r.22.11(3)(b) does not apply to Firebelt because the enabling power derives from sections 142 & 143 – which refer to the applicant and patentee. Following this logic, regulations 13.3(1) and (3), and 13.6(1) & (3) similarly do not apply to Firebelt. Consequently, on the interpretation argued by Mr Dredge, there is no period prescribed for the purposes of sections 142 & 143 (at least insofar as Firebelt is concerned) – and therefore nothing to extend.

Decision

In his initial considerations the Commissioner has treated Firebelt (having prima facie demonstrated an equitable interest in the patent) as being equivalent to the applicant and patentee. I consider this to be appropriate. Consequently, for the reasons expressed in Foldi and Beckswift (supra) [which were not contradicted by Mr Dredge ], I consider that r.22.11(3)(b) applies to the s.223 requests by Firebelt. That is, r22.11(3)(b) excludes the operation of s.223 to the present circumstances – an error or omission of Firebelt during the grace period.

Firebelt argues that r22.11(3)(b) does not apply to them. This is on the basis that the regulations made under s.142(2)(d) and 143(a) must be circumscribed as being applicable to the applicant or patentee there mentioned – and that therefore the exclusion of r22.11(3)(b) does not apply to an equitable owner such as themselves. However, the inevitable corollary of this interpretation is that regulations 13.3(1) & (3), and 13.6(1) & (3) likewise cannot apply to the equitable owner. That is, on this interpretation there are no periods prescribed for the purposes of s142(2)(d) and 143(a) – insofar as the Firebelt is concerned – and therefore nothing to extend.

Consequently I am satisfied that the requested extensions of time cannot be granted, and accordingly I refuse them.

D Herald
Deputy Commissioner of Patents

Patent attorney for the requestor     : Intellpro, Brisbane