G S Technology Pty Limited and Commissioner of Patents and Anor
[2004] AATA 1391
•23 December 2004
|
DECISION AND REASONS FOR DECISION [2004] AATA 1391
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2004/648
| GENERAL ADMINISTRATIVE DIVISION | ) | ||
| Re | G S TECHNOLOGY PTY LIMITED | ||
Applicant
| And | COMMISSIONER OF PATENTS |
Respondent
| And | G S A INDUSTRIES (AUST) PTY LIMITED |
Party Joined
DECISION
| Tribunal | Justice Downes, President |
Date23 December 2004
PlaceSydney
| Decision | The decision of the Commissioner of Patents under s 223 of the Patents Act 1990 (Cth) to refuse the application for an extension of time is set aside. In lieu thereof the Tribunal extends the time for the payment of the fees in respect of Application 32815/95 to 13 March 1998 by which time it is understood that the fees had been paid or to 31 January 2005 if payment of the fees has not been finalised or any further action is required with respect to payment. |
........[sgd Garry Downes]........
President
CATCHWORDS
INTELLECTUAL PROPERTY – PATENTS – failure of applicant to pay continuation fee on or before due date – consequential lapse of patent – application for extension – evidence of applicant’s ongoing intention to maintain the patent – immediate lodging of fee on realisation of error – erroneous advice as to due date given in letter from patent attorneys – failure of applicant’s agent to put in place a proper diary or reminder system – failure to be aware of problem constituted an error or omission – discretion exercised in favour of applicant – extension of time granted
Administrative Appeals Tribunal Act 1975 (Cth) s 35A
Patents Act 1990 (Cth) s 223
G S Technology Pty Ltd v Commissioner of Patents [2004] FCA 1017
Kimberly-Clark Ltd v Commissioner of Patents (No 3) (1988) 84 ALR 685
Stack v Commissioner of Patents (1999) 161 ALR 531
Stack v Commissioner of Patents [1999] FCA 1171
REASONS FOR DECISION
| 23 December 2004 | Justice Downes, President |
Introduction
For a relatively simple matter this application has had an unfortunate history. It has already been considered twice in the Federal Court, on the first occasion by both a full court and a single judge (Stack v Commissioner of Patents [1999] FCA 1171 per French, Whitlam and Lindgren JJ; Stack v Commissioner of Patents (1999) 161 ALR 531 per Drummond J; and G S Technology Pty Ltd v Commissioner of Patents [2004] FCA 1017).
The question for determination is whether, pursuant to s 223 of the Patents Act 1990 (Cth), G S Technology Pty Ltd (GST) should be granted an extension of time to pay a continuation fee with respect to a patent application. In my opinion, it should. I will give my reasons.
Background
The general facts of this matter are set out in detail in the decision of Spender J (G S Technology Pty Ltd v Commissioner of Patents [2004] FCA 1017). I will state them simply.
On 21 September 1995, patent application 32815/95 in the name of GST was filed. It was filed by Pizzey & Co, patent and trade mark attorneys. On 4 October 1995 Pizzeys wrote to GST informing it that annual renewals were payable in respect of such applications “from the third anniversary of the filing date”. In the present case this was wrong. A renewal payment was due on 30 August 1997 which was the anniversary of a related prior patent application. The regulations provided for a grace period for payment of the fee which expired on 2 March 1998.
The letter of 4 October 1995 was marked for the attention of Andrew Abaza. He was a solicitor who had been asked by the principal of GST, George Stack, to take over the handling of his patent applications (other than technical matters such as the preparing of specifications and claims) and all aspects of associated litigation.
It appears that the letter came to the notice of Mr Abaza. He may have fixed it to the wall of his office. There is, however, no particular evidence that he consciously acted in accordance with its statements.
Thirty August 1997 came and went without the continuation fees being paid. So did 2 March 1998. On 28 February 1998 Mr Abaza wrote to the Commissioner of Patents about the patent application, but made no mention of the pending requirement for payment.
On 10 March the Patent Office wrote to GST. The letter referred to the letter of 28 February which had been received on 3 March. It advised that the patent application had lapsed for non-payment of the continuation fee.
On 12 March, the day he received the Patent Office letter, Mr Abaza lodged a Schedule 7 Item 8(a) fee and an extension fee for one month totalling $180.00. The following day he paid an additional $745.00. That day he lodged an application for an extension of time. The application was accompanied by a declaration by Mr Abaza that he and GST had acted in accordance with the advice contained in the letter from Pizzeys.
Application to the Tribunal
Section 223 relevantly provides:
“(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.”
The Commissioner refused GST’s application. GST applied to the Tribunal for review of that decision. G S A Industries (Aust) Pty Ltd (GSA), a party with an interest to oppose the application, was joined. It was the status of this party which was the subject of the first Federal Court appeal.
DP Muller ultimately affirmed the Commissioner’s decision. That decision has now been set aside by Spender J in the Federal Court. The matter was remitted to the Tribunal “for consideration according to law”.
The Hearing
The Commissioner took no active part in the proceedings before me. The application was opposed by GSA.
The parties agreed that the evidence before DP Muller should also be evidence before me. This included the oral evidence. The transcript of that evidence was provided.
At the commencement of the hearing Mr S O’Bryan SC, who appeared for GSA, applied to further cross-examine two of the witnesses who had given evidence before DP Muller. They were Messrs Stack and Abaza. This was opposed by Mr A Vasta QC, senior counsel for GST. Mr Vasta submitted that the matter should proceed solely on the evidence before DP Muller and that I was bound by certain conclusions of Spender J which identified, without disapproval, critical findings that had been made by DP Muller.
I decided not to rule on these matters during the hearing and ruled that the further cross-examination should be permitted on the basis that I would finally determine the extent to which I was bound by the conclusions of Spender J after I had heard final submissions. As it turns out I do not think I need to come to any concluded view about this matter.
Mr Stack is in Thailand. He has been working there for the last two years. It was submitted that he should be required to attend personally for cross-examination. However, because he had already been cross-examined by senior counsel in person before DP Muller, because the matter had been listed for hearing and was otherwise ready to proceed and because I saw no reason why cross-examination by telephone would not be effective, I decided, pursuant to s 35A of the Administrative Appeals Tribunal Act 1975 (Cth), to permit cross-examination by telephone. It should be noted that cross-examination by telephone now occurs frequently in matters before the Tribunal. When Mr Stack began his evidence by telephone he stated that although he was returning to Australia at the end of the week he could not have returned for the day of the hearing because of teaching commitments he had in Thailand. This supported the decision that he should be allowed to give evidence by telephone. Having heard his cross-examination I am satisfied that cross-examining counsel was not disadvantaged.
In addition to having before me the evidence before DP Muller, I have the further cross-examination of the two principal witnesses. The most important witness, as will appear, was cross-examined in person.
Both sides filed extensive written submissions. They were addressed by counsel during the hearing. I have read them both since the hearing. Since the hearing I have reviewed all the evidence. This was provided to me in a convenient volume.
“Error or Omission”
The first thing I must do is to determine whether the circumstances of the present matter fall within subs 223(2) of the Act. The present case is put as one of an “error or omission” not one of circumstances beyond control. If the present case is within the section I must decide whether, as a matter of discretion, an extension of time should be granted.
For the operation of the subsection to be attracted, relevantly, it must be the case that:
1.Because
2.Of an error or omission
3.A relevant act was not done.
As Jenkinson J said in Kimberly-Clark Ltd v Commissioner of Patents (No 3) (1988) 84 ALR 685 at 698 the act or omission cannot be the failure to do the relevant act. There must be a causal connection between the error or omission and the failure to do the act. Two conclusions follow. First, the relevant act or omission must be different from the failure to act. Secondly, the relevant act or omission must be causally related to the failure to act.
In Kimberly-Clark Jenkinson J said (at 694) that “lapses of memory and accidental slips … may be those which the draftsman had principally in mind”. He warned against “the drawing of fine and … unrealistic distinctions.” The full sentence containing the first quotation is: “And some errors of judgment by agents and attorneys may be as bizarre and as little to be anticipated as lapses of memory and accidental slips.” I agree with his Honour’s observations.
It could not be said in the present case that there was any relevant moment at which GST had an intention other than to pay on time any fees due with respect to the relevant patent application. Mr Stack stated this very clearly in his cross-examination before me and he was not challenged. As Spender J noted, the objective evidence that this was the case is very powerful. The very day it first came to the attention of GST’s solicitor that the fees had not been paid, a payment was made. The following day a further payment was made. That day proceedings for extension were commenced. Two days before the last day of grace for payment the solicitor had written to the Patent Office in connection with the relevant patent application.
The question is, why was the payment not made prior to receipt of the Patent Office letter of 10 March 1998? The answer must be, because the person charged with the responsibility for payment did not know it was due. All the evidence supports that finding. The combination of the existence of an applicant which intended to pay fees when due and the failure of that applicant to pay the fees suggests the possibility of error. It suggests the possibility of “lapses of memory and accidental slips” to use the words of Jenkinson J. Where an applicant for a patent does not pay fees because the patentee does not want to persist with the application, but after the patent has lapsed seeks an extension under s 223, the application for extension will fail. That is why the failure to pay as such is not an error or omission. There must be something more. The failure of a computer reminder system will be covered. But so will merely forgetting or not thinking to look in a book containing important reminder dates. The lapse of memory or accidental slip is the error or omission which is causally associated with the failure to pay.
The party joined submits that s 223 is not enlivened in this case because the only potential error was the failure to pay itself. No procedure had been put in place which was calculated to remind GST within time of the need for payment. It is submitted that there is no error or omission in the absence of such circumstances or similar or comparable circumstances. The argument is that in the absence of such a system, one which by definition must fail, there is no relevant causation. A failed reminder system is within the section. No reminder system is not. I do not think this submission is right. It ignores Jenkinson J’s reference to “lapses of memory and accidental slips”. It is an example of a “fine and … unrealistic distinction…”
At their lowest the facts in the present case can be described as follows. A patent application was made by GST. At the time GST was represented by patent attorneys. GST subsequently decided that a solicitor should handle at least part of its patent work which would include the payment of patent fees. The patent attorneys wrote to GST for the attention of the solicitor stating when the fees were due. They were wrong. The solicitor probably received the letter. He may or may not have appreciated the advice in it about payment. He may or may not have affixed it prominently as a reminder. If he had he would have been misled. Nothing else prompted him to pay the fees on time. Contrary to his retainer he failed to pay.
This scenario seems to me squarely to enliven the section. I say nothing for the moment about whether it justifies a positive exercise of discretion. To distinguish this case from a failed system seems to me to involve fine and unrealistic distinctions.
I do not consider that I am bound by what Spender J said except on the question of law on which he found that the decision of DP Muller should be set aside. Although I have earlier referred to his Honour’s decision as a convenient statement of the facts in detail I accept that some aspects of the statement of facts are not agreed to by the joined party. I have accordingly not acted on his Honour’s observations about the facts. However, I do wish to say that I have independently arrived at an assessment of the facts in this matter and of the conclusions which should be drawn as to whether they enliven the power under s 223 which are quite consistent with his Honour’s observations.
To this point I have addressed a version of the facts which are not really in dispute. To the extent that there is any dispute I find the facts to be at least as I have stated them. I base these findings on the written and oral evidence. However, the evidence addresses the facts in greater detail. The question is, whether the evidence enables me to find the facts with more particularity.
Spender J said (at [64]):
“In my opinion, the AAT in its findings identified that the failure to pay the continuation fees arose because Mr Abaza received a letter from Pizzeys which indicated that the fees were payable by 21 September 1998 and that the agent of GST, Mr Abaza, ‘thought no more about the continuation date until he received the letter from the Patent Office in March 1998 to tell him that the application had lapsed’.”
I do not consider that I am bound to adopt that finding. I must consider the evidence afresh. However, the finding is among the range of possibilities which might be available.
With the application for an extension of time filed on 13 March 1998 Mr Abaza lodged a declaration of the same day. It contained the following:
“2.Patent Application No. 32815/95 was filed on 21 September 1995 and in accordance with written advice received from Pizzey & Co 4 October 1995 I was advised that annual renewals were payable on the third anniversary of the filing date. Annexed hereto and marked with the letter “A” is a true copy of the said letter.
3. My client company and I acted in accordance with the said advice.”
Mr Stack and Mr Abaza have been cross-examined by two senior counsel, Mr McMurdo QC and Mr O’Bryan SC. I have carefully considered both their affidavit evidence, their oral evidence in chief and in reply and their cross-examinations.
I have no doubt that Mr Stack and Mr Abaza wanted to do whatever was necessary to keep the patent application on foot, including the payment of fees. They said so. The contrary was not put to them. Indeed, in final oral submissions, Mr O’Bryan submitted that Mr Stack abrogated responsibility to Mr Abaza for the payment of fees and Mr Abaza shouldered it. I accept that. It is another reason why telephone cross-examination of Mr Stack was sufficient. The major inquiry as to whether there was a relevant error or omission within s 223 centres upon the acts of Mr Abaza.
Mr Abaza does not have a clear recollection of having received the letter from the patent agent of 4 October 1995. If he did he is not sure what he did with it. He had a practice of putting such letters on the wall behind his desk. He thinks he probably did that with this letter. Because one copy of the letter in question may have contained an indication that the letter had had adhesive tape on it at some time he became more persuaded of the possibility that he had stuck the letter on the wall when he gave evidence before me. However, all that this would have done was to reinforce any belief he already had that the date for payment was much later than it actually was. It is hard to see why such a flawed reminder process, flawed because the content of the letter was wrong, could potentially improve the prosects of an application for extension of time under s 223.
However, to the extent that it may be relevant I will make findings of fact as to what happened with respect to the letter. The findings are based on the declaration of Mr Abaza and the affidavits of Mr Stack and Mr Abaza as well as their cross-examination and other evidence about the letter which is before me.
I find that a copy of the letter did come to the attention of Mr Abaza. I find that because it suggested nothing need be done until the second half of 1998 he put it to the back of his mind although he stuck it on the wall behind his desk as a reminder for the future. Since the letter required nothing to be done for the moment the matter never was brought to the front of his mind. These more particular findings of fact than the lower level findings I made above seem to me clearly to be within s 223. As I understand the party joined’s argument they are within it. There cannot be a difference between a sophisticated system for alerting a patentee to a time limit for payment which fails because of some programming error and the failure of the more basic system of sticking a note on the wall.
In my opinion the facts as I have found them to be, at both levels of specificity, are within s 223. However they are looked at, the fact that GST by its agents was not conscious of the need to pay was an error or omission which caused the failure to pay.
Exercise of Discretion
I turn to the question of whether I should exercise my discretion in favour of extending the time for the payment.
I have considered the matters addressed by the Deputy Commissioner of Patents in giving his decision refusing an extension of time on 27 February 2001. I have carefully read the party joined’s submissions and taken what appears there into account, including the submissions relating to the Deputy Commissioner’s reasons. I have carefully considered the case that there has not been “prompt, frank, comprehensive and clear disclosure of all the circumstances” (see Kimberly-Clark at 699).
With all respect to the submissions put on behalf of the party joined it seems to me that this is a relatively simple and clear cut case. Mr Abaza failed to pay the fees for reasons discussed above. The moment he found out about the failure he paid and made application for an extension. However the error or omission is described, it was just the sort of lapse of memory or accidental slip with which the section is concerned. It is not suggested that any third party had acted on a belief that the patent application had lapsed which action would be to its detriment if an extension was granted. No harm was done. Except that third parties might lose a windfall benefit if the time was extended. The error or omission was culpable but human.
The evidence seems to me to be overflowing with frankness and candour. The problem is that systems were not in place; records were not kept. It is not surprising that the witnesses, and particularly Mr Abaza, were not able to give precise and convincing accounts of exactly what happened. “Lapses of memory and accidental slips” are apt to be associated with unclear recollections given subsequently. However, I have no doubt that the failure to make payment was not associated with any deliberate decision which subsequently changed. Were that an element then things would be quite different.
Conclusion
Everything in the present case points to the granting of an extension of time. I accordingly propose to extend the time for the payment of the fees in respect of Application 32815/95 to 13 March 1998 by which time I understand the fees to have been paid or to 31 January 2005 if payment of the fees has not been finalised or any further action is required with respect to payment.
I certify that the 43 preceding paragraphs are a true copy of the reasons for the decision herein of Justice Downes, President
Signed: ........[sgd Shamus Toomey]........
Associate
Date of Hearing 13 December 2004
Date of Decision 23 December 2004Counsel for the Applicant Mr A Vasta QC with Mr D G Eliades
Solicitor for the Applicant Fox Lawyers
No appearance for the RespondentCounsel for the Party Joined Mr S O’Bryan SC
Solicitor for the Party Joined Blake Dawson Waldron
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