Garden City Planters Pty Ltd v Vivre Veritas Pty Ltd - [2012] APO 133

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Garden City Planters Pty Ltd v Vivre Veritas Pty Ltd [2012] APO 133

Patent:769039

Title:Label retention improvement

Patentee:  Garden City Planters Pty Ltd
Applicant for Licence:              Vivre Veritas Pty Ltd
Opponent to Licence:            Garden City Planters Pty Ltd
Delegate:  O L Haggar
Decision Date:  18 December 2012
Hearing Date:  16 April 2012, in Canberra
Catchwords:  PATENTS – patent ceased because of non-payment of renewal fee in time – application for licence to exploit the patent pursuant to s 223(9) and reg 22.21 – onus of proof – weight of hearsay evidence – credibility of witnesses – whether licence applicant aware of the status of the patent at all material times - whether licence applicant exploited or took definite steps to exploit the patent because of its ceased status – evidence does not establish that the licence applicant is a person to whom s 223(9) and reg 22.21 apply – application for licence to exploit the patent refused
Representation:  Patentee/Opponent: Thomas Duggan of counsel instructed by Madeleine Crawford of Donaldson Walsh Lawyers, Adelaide
Applicant for Licence: William Poedjokerto

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent:769039

Title:Label retention improvement

Patentee:  Garden City Planters Pty Ltd
Date of Decision:  18 December 2012
DECISION
The evidence does not establish that Vivre Veritas Pty Ltd exploited or took definite steps to exploit the subject matter of the patent because of its ceased status and, consequently, that it is a person to whom subsection 223(9) and regulation 22.21 apply. Accordingly, I refuse to grant Vivre Veritas Pty Ltd a licence to exploit the subject matter of the patent. Costs under schedule 8 are awarded against Vivre Veritas Pty Ltd.
REASONS FOR DECISION
BACKGROUND

Patent number 769039 (the patent) in the name of Garden City Planters Pty Ltd ceased because of non-payment of the renewal fee due in 2008 within the time allowed. On 1 September 2009, the patentee applied for an extension of time under section 223 from 23 February 2008 to 23 September 2009 in which to pay the overdue renewal fee. The extension application was advertised on 26 November 2009, and granted unopposed on 12 January 2010. The patent was consequently restored.
On 25 June 2010, Vivre Veritas Pty Ltd applied for a licence under regulation 22.21 to exploit the subject matter of the patent. The patentee filed a notice of opposition to the licence application on 26 July 2010 followed by a statement of grounds and particulars on 5 November 2010 after the grant of a one month extension of time. The statement was amended under regulation 5.9 on 30 August 2011 and again on 11 October 2011 to provide further and better particulars.
Given the nature of the present proceedings, for the purposes of this decision Vivre Veritas Pty Ltd will hereafter be referred to as “the applicant”, while the patentee will (unlike conventional opposition proceedings) be referred to as “the opponent”.
The opponent filed its evidence in support on 7 February 2011. The applicant had by then been served with a notice to produce at the request of the opponent. After a lengthy exchange of correspondence concerning the existence or otherwise of a lawful excuse for not complying with the notice, on 28 April 2011 a delegate of the Commissioner advised the parties that a declaration made by William Poedjokerto and filed by the applicant on 23 February 2011, which exhibited documents provided in response to the notice, was considered to represent evidence in answer. The parties were also advised that as the applicant had confirmed it did not intend filing any further evidence in answer, this evidentiary stage was complete.
On 20 May 2011, the opponent filed a notice of intention to serve evidence in reply. In the event, no evidence in reply was served. However, the opponent subsequently applied on two occasions to serve further evidence which was allied to the amendments made to the statement of grounds and particulars. Both applications were granted and further evidence was filed on 27 July and 23 September 2011.
The applicant filed a response to the further evidence on 15 October 2011.
The matter was set for hearing on 14 April 2012. On 21 March 2012, the opponent requested that Mr Poedjokerto be summoned to appear as a witness at the hearing. A summons to witness was served on Mr Poedjokerto on 2 April 2012.
THE PATENT
The subject matter of the patent relates to label retention improvements, and more particularly to a label retaining arrangement for attaching a label to a container such as a plastic plant pot made by pressure or vacuum forming techniques. These pots, or so-called “punnets”, are typically rectangular and comprise a number of separate plant holding compartments or cells.
The claims of the patent are of four broad types, however, for present purposes it is only necessary to set out claim 1 which is in the following terms:
“A label retaining arrangement for a container which includes a wall defining a trough along a part of an upper perimeter of the container, the trough having an uppermost mouth and a straight, linear slot or slit through the wall defining the trough, the slit or slot extending along at least some of the length of the trough.”
Broadly speaking, the container is intended for use with a label having a resiliently deformable part. Upon insertion through the slit or slot, the label undergoes partial resilient deformation and thereafter assumes an interlocking position relative to the container.
THE LICENCE APPLICATION
The grounds on which the applicant seeks a licence to exploit the subject matter of the patent are set out in a statutory declaration made on 24 June 2010 by William Poedjokerto, the director of the applicant.
Mr Poedjokerto states that he first became aware of the patent as a result of an enquiry by “Client A” in early 2008 as to whether the applicant could supply it with multi-compartment plastic plant trays. He says he “made a conscious effort to ensure that the multi-compartment plastic plant trays which my company would supply for Client A would not encroach on the scope of the patent”.
Subsequent events prompted Mr Poedjokerto to check the status of the patent via the publicly available AusPat database provided by IP Australia which revealed that the patent had ceased. This was allegedly confirmed by “Patent Attorney A” in January 2009 and “an officer from IP Australia” in March/April 2009. On each occasion Mr Poedjokerto was advised that as the patent had ceased, the public was free to exploit it.
In February 2009, Mr Poedjokerto discussed the supply of multi-compartment plastic plant trays “falling within the scope of the patent” (the plant trays) to “Client B”. These discussions resulted in a purchase order from client B. Further purchase orders for the plant trays were subsequently placed by client A and others.
According to Mr Poedjokerto:
“On the basis of the ceased state of the patent, as well as the purchase orders, including those from Client A and Client B, my company committed to supplying the plant trays and making the necessary investments to enable my company to source/manufacture the plant trays on a commercial scale.”
Mr Poedjokerto claims that by the end of November 2009 the applicant tested samples of the plant trays with client A and client B, and essentially completed the tooling for production of the plant trays after making an initial payment for tooling expenses in July 2009.
On 9 March 2010, Mr Poedjokerto was contacted by client B. For reasons which are unexplained, this led Mr Poedjokerto to recheck the status of the patent and he was “shocked” to learn that it had been restored. On seeking clarification from IP Australia, Mr Poedjokerto says he was advised by letter that the patent had been revived pursuant to the grant of an extension of time. As the period for opposing the extension had expired, Mr Poedjokerto was referred to the provisions of subsection 223(9) and regulation 22.21.
On 8 April 2010, Mr Poedjokerto sought advice from “Attorney B” in relation to the letter he had received from IP Australia.
It is convenient to mention here that it has emerged from the evidence that “Client A” referred to by Mr Poedjokerto is Benara Nurseries, a wholesale nursery located at Wanneroo in Western Australia (Benara), while “Client B” is Oasis Horticulture, a plant seedling producer located at Winmallee in New South Wales (Oasis). It has also transpired that “Patent Attorney A” was from the patent attorney firm Wrays.
THE EVIDENCE
Evidence in support
The evidence in support consists of a statutory declaration made by Graham Maxwell Brown on 4 January 2011 with exhibits GMB1 to GMB8.
Mr Brown is the Business Development Manager of the opponent, and the inventor named by the patent. He states that since 1999 the opponent (and its predecessors in business) have and continue to produce and market substantial quantities of various forms of containers embodying the subject matter of the patent to most of the major nurseries and suppliers of plants and seedlings in Australia. Annual sales of these containers are said by Mr Brown to have remained well above ten million units during this period. Mr Brown explains that these products are widely known as “cell punnets” in the industry.
Evidence in answer
The evidence in answer consists of a statutory declaration made by William Poedjokerto on 18 February 2011 with exhibits VV1 to VV9.
Mr Poedjokerto contends that some nurseries in Australia have purchased “large numbers” of plant containers falling within the scope of the claims of the patent from the applicant as demonstrated by the following exhibits:
- VV2 which is an invoice dated 8 July 2009 from a company based in Indonesia known as Pt. Aneka Roto Plastic (Roto Plastic) for a modest quantity of articles described as “6 holes mould”, “8 holes mould” and “8 holes test mould”. According to Mr Poedjokerto, Roto Plastic is a tooling manufacturer.
- VV3 which is a receipt from Roto Plastic dated 23 July 2009 acknowledging payment by the applicant of a deposit on the invoiced moulds.
- VV4 which is a receipt from Roto Plastic dated 13 August 2009 acknowledging payment by the applicant of another deposit on the invoiced moulds.
- VV5 which is a purchase order from Benara dated 7 May 2009 for the supply of 350,000 8 cell punnets designated by the product code CM8, and 280,800 8 cell punnets designated by the product code CI8.
- VV6 which is a sales order of the applicant to Oasis dated 3 February 2009 for multi-cell punnets purchased from the applicant and designated by the product code PNB6-8. The quantity of products sold has been redacted from this exhibit.
- VV7 which is a certified copy of a substantially redacted NAB bank statement for an account held by the applicant allegedly showing a deposit made by Oasis on 5 February 2009 in compliance with the terms and conditions of the sales order of VV6.
Mr Poedjokerto also notes the receipt from Roto Plastic dated 27 April 2010 and exhibited as VV9 which he says was for the final payment by the applicant on the invoiced moulds.
Further evidence
The opponent’s further evidence consists of:
- A second statutory declaration made by Graham Maxwell Brown on 27 July 2011 with exhibits GMB9 to GMB13;
- A statutory declaration made by Howard Kenneth Schultze on 14 September 2011 with exhibits HKS1 to HKS-4;
- A statutory declaration made by Robert Ian Grey on 21 September 2011 with exhibits RIG1 to RIG5; and
- A third statutory declaration made by Graham Maxwell Brown on 23 September 2011.
The second declaration made by Mr Brown foreshadows the opponent’s intention to resist the licence application for the reason that it had recently become aware of the applicant having allegedly sold, or offered for sale or dealt with, infringing products before the patent had ceased.
That allegation was soon followed by the declaration of Mr Grey who is the branch manager for the opponent in Western Australia. Mr Grey deposes that on 5 May 2011 he visited Landsdale Plants (Landsdale), a nursery located at Landsdale in Western Australia, where he met John Tillbrook who he knew to be a director and the manger of Landsdale. Mr Grey says that while speaking with Mr Tillbrook, he noticed a number of weathered cardboard cartons bearing the name “Veritas” on their sides. When asked, Mr Tillbrook said the cartons contained “8 cell metric punnets, approximately 3 years old”.
On or about 14 June 2011, Mr Grey again visited Landsdale and spoke to Mr Tillbrook about the 8 cell punnets in the weathered cartons. Mr Tillbrook allegedly said that the punnets had been offered to him by the applicant “at a cheap price” which he declined because the punnets were found to be faulty. On inspecting some of the punnets, they appeared to Mr Grey to be a direct copy of the opponent’s patented product. With the consent of Mr Tillbrook, Mr Grey took one of the cartons of punnets from Landsdale and on 1 July 2011 posted this carton and its contents to Mr Brown. The carton is stated by Mr Grey to have contained a commercial quantity of punnets. This is confirmed by the third declaration made by Mr Brown. RIG1 is allegedly a photograph of one side of the carton and RIG2 to RIG5 are allegedly photographs of various views of one of the punnets contained in it.
Mr Grey states that he was told by Mr Tillbrook during a phone conversation in mid August 2011 that “representatives” of the applicant had collected and removed all of the remaining cartons containing 8 cell punnets.
Mr Brown subsequently contacted Mr Tillbrook, who was known to him, by phone on 8 and 12 September 2011. Mr Tillbrook is said to have told him that Landsdale had at various times purchased moulded plastic garden products, such as flower pots, from the applicant. Mr Tillbrook is further alleged to have said that in mid 2008 Mr Poedjokerto offered to sell seedling punnets to Landsdale which had been previously rejected by Benara. Mr Tillbrook said that despite refusing the offer for sale, the applicant delivered some 6-8 pallets of cartons containing punnets shortly thereafter.
Mr Brown states that he provided Mr Tillbrook with copies of photographs which I note are identical in every respect to those exhibited by Mr Grey. Mr Tillbrook allegedly confirmed that:
“the [carton depicted in the photographs] was one of the cartons contained on the pallets delivered to Landsdale Plants and that the [punnet depicted in the photographs] appeared to be one of the punnets that were provided by the applicant to Landsdale Plants.”
Mr Brown says he was told by Mr Tillbrook that the punnets were found to be “totally unsatisfactory and unacceptable” to Landsdale as a consequence of which the applicant through the agency of Mr Poedjokerto was requested to collect the cartons of punnets. This did not occur until July 2011 or later.
Mr Brown, and likewise Mr Grey, deposes that, as recounted by Mr Tillbrook, the applicant had collected the cartons following the receipt of a notice from the opponent’s legal representatives alleging infringement of the patent.
Response to the further evidence
The applicant’s response to the further evidence is not in declaratory form, and instead merely consists of a letter dated 14 October 2011 from Mr Poedjokerto in which he raises a number of issues totally unrelated to the substance of the further evidence. Relevantly, however, the letter exhibits as an attachment marked as E1 a statement made by Mr Tillbrook on 11 October 2011 which reads as follows:
“To Whom It May Concern:
Re: Australian Patent No 796093 (Label Retention Improvements) Application for Licence by Vivre Veritas Pty Ltd and Opposition by Garden City Planters
I, John Bevan Tillbrook, director of Grey Willow Ltd under the business name of Landsdale Plants at 42 Landsdale Road, Landsdale WA 6065 hereby state that:
1. I have never given any consent or permission to the Opponent (Garden City Planters and all it’s [sic] staff members) to use my name or staffs [sic] or company in all circumstances and situations for the matter mentioned above.
2. My conversation or my staff’s conversation to the Opponent is merely hearsay and the accuracy and legitimacy of it cannot be verified or determined and not intended or supposed to be used in any part of the matter stated above.
3. I refuse to participate in any part of the matter mentioned above.”
Evidence tendered at the hearing
During the course of the hearing, Mr Duggan sought to admit three items of evidence marked as exhibits O1 to O3. The first exhibit is a copy of a letter dated 21 July 2011 from the opponent’s legal representatives to Mr Poedjokerto, and is already part of the official records held by IP Australia. Specifically, the letter raises allegations of infringement of the patent prior to its cessation by or with the authorisation of Mr Poedjokerto. This letter evidently constitutes the “notice of infringement” referred to in the evidence of Mr Grey and Mr Brown. The remaining exhibits were generally described by Mr Duggan as physical examples of cell punnets respectively produced by the applicant and the opponent.
Mr Poedjokerto did not object to the admission of this evidence into the proceedings.
PRELIMINARY MATTERS
Statutory framework
A ceased patent may be restored under section 223. However, subsection 223(9) provides for protection or compensation of persons who exploited the patent during the time that the patent was ceased:
Where the Commissioner grants:
(a) an extension of more than 3 months for doing a relevant act; or
(b) an extension of time for doing a prescribed relevant act in prescribed circumstances;
the prescribed provisions have effect for the protection or compensation of persons who, before the day on which the application for extension of time is advertised under subsection (4), exploited (or took definite steps by way or contract or otherwise to exploit) the invention concerned because of the failure to do the relevant act within the time allowed, the lapsing of the patent application or the ceasing of the patent, as the case may be.
The “relevant act” in this case was the opponent’s failure to pay the renewal fee due on 23 February 2008.
The key feature of these protection or compensation provisions is that under subregulation 22.21(2), the Commissioner can grant a licence to a person who exploited the invention:
Persons who availed themselves of or exploited, or took definite steps by contract or otherwise to avail themselves of or exploit, inventions:
……
(c)in the case of inventions to which subsection 223(9) of the Act applies – within the period of time extended under that subsection;
may apply, in the approved form, to the Commissioner for the grant of licences to exploit the inventions.”
The grant of a licence under regulation 22.21 was considered in Law v Razer IndustriesPty Limited [2010] FCA 1058. Bennett J noted that, as prescribed by regulation 22.21, the persons who may apply for a licence are not any persons who took steps to exploit the invention concerned, but only those persons encompassed within subsection 223(9). Her Honour proceeded as follows at [27]:
“Section 223(9) of the Act is not designed to protect a person who by happenstance takes steps to exploit a patent during a period in which it is ceased. It cannot be that a person who manufactures and sells products within the scope of the claims of a patent can be protected simply because that person is lucky enough to have commenced those steps while that patent was not in force through an error or omission of the patentee. There must be a link between the fact that the particular patent has ceased and reliance upon that fact by the person seeking to obtain the protection. Regulation 22.21 of the Regulations does not refer to that necessary link but the regulation can rise no higher than the subsection to which it refers and for which it is prescribed.”
Onus of proof

It is generally incumbent upon an opponent to establish their case. As stated by Buckley LJ in Dunlop Holding Ltd’s Application [1979] RPC at 542-543:
“It seems to me that in principle [the legal burden of proof] should lie on the opponents to prove all the necessary elements of a valid ground of opposition … Knowledge of the relevant facts may lie mainly, or exclusively, with either the opponents or the applicants, or be to a greater or lesser degree available to either of them. Notwithstanding that the legal burden may lie upon the opponents, the evidential burden may shift according to the state of the evidence from time to time. The ease with which it may do so may depend upon the circumstances of the case and the likelihood of the facts being within the knowledge of, or more readily available to, one side or the other. Thus, if the relevant facts are likely to be within the exclusive knowledge of the applicants … very little evidence on the opponent’s side might be sufficient to shift the evidential burden … to the applicant. Failure to produce convincing evidence … at any stage at which the evidential burden rests on the party who fails to do so, may prove fatal to that party’s case; but when all the evidence has been adduced the question must be whether [the particular ground of opposition relied on] has been established.”
In Grove Hill Pty Ltd v Great Western Corporation [2002] FCAFC 183 at [221], Dowsett J deemed this approach to be consistent with that taken in previous decisions of the High Court.
The opponent has argued that “these proceedings are not traditional opposition proceedings against the grant of a standard patent pursuant to Section 59 of the Patents Act. There are no elements that it is incumbent on the Opponent to prove, and therefore the onus of proof that would ordinarily lie with the Opponent in traditional opposition proceedings must, in this case, shift to the Applicant.” However, the opponent agreed that regardless of where the legal burden may presently rest, the evidential burden may shift from time to time particularly where knowledge of the relevant facts lies peculiarly with one party or the other.
Standard of proof
It is well established that the standard of proof in opposition proceedings is the normal standard of proof required in civil litigation, that is to say, on the balance of probabilities (Dunlop Holding at 543-544).
Weight of hearsay evidence
The evidence of the opponent is in part hearsay to the extent that it relies on evidence from Mr Brown and Mr Grey of what was allegedly said to them by Mr Tillbrook. However, as an administrative decision-maker, the Commissioner is not bound by the rules of evidence applicable in a court proceeding. As stated by Deane J in The Minister for Immigration and EthnicAffairs v Pochi (1980) 4 ALD 139 at 155:
“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. It means that he must not spin a coin or consult an astrologer, but he may take into account any material, which as a matter of reason, has some probative value in the sense mentioned above. If it is capable of having any probative value, the weight to be attached to it is a matter for the person to whom Parliament has entrusted the responsibility of the deciding the issue.”
Further, and as acknowledge by Brennan J at first instance ((1979) 2 ALD 33 at 42), “there is no reason why logically probative hearsay should not be given credence”.
Thus the Commissioner is not precluded from acting on hearsay evidence. However, it seems to me that evidence of a hearsay quality would inevitably lack the cogency inherent in evidence given by someone having first-hand knowledge of the facts alleged.
Credibility of witnesses
The respective cases for both parties chiefly depend on the evidence of Mr Poedjokerto for the applicant, and Mr Brown and Mr Grey for the opponent. None are independent declarants given their close association with the respective parties. It is also the case that the parties are actual or potential competitors in the marketplace and there is evidence to suggest that the outcome of these proceedings will as a result likely prove detrimental to the private commercial interests of one of other of them. It is hardly surprising then that as sole director of the applicant, Mr Poedjokerto in particular has become emotionally involved in this matter and the objectivity of his written evidence often suffers because of this.
In addition, Mr Poedjokerto was at times less than forthright when giving oral evidence which left the distinct impression that his evidence was at least to some extent coloured by perceptions of self-interest. The following exchange is illustrative of his defensive approach:
Mr Duggan:Do you agree with me that when you attended [Landsdale] in July–August 2011 there was a carton such as is depicted in GMB13?
Mr Poedjokerto:        Yes.
Mr Duggan:               And you saw that carton at Landsdale didn’t you?
Mr Poedjokerto:        Yes I did.
Mr Duggan:               And I suggest to you that in that carton were 8 cell punnets.
Mr Poedjokerto:        You can suggest anything you like.
Mr Duggan:               And were there 8 cell punnets inside that carton?
Mr Poedjokerto:        Maybe or maybe not.
Mr Duggan:               Did you look?
Mr Poedjokerto:        I looked at the carton, yes.
Mr Duggan:And did you look at the contents of any of those cartons when you were there with Mr Tillbrook?
Mr Poedjokerto:        Yes.
Mr Duggan:               And were there 8 cell punnets inside any of the cartons?
Mr Poedjokerto:        In one of the particular cartons, yes.
Mr Duggan:So why did it take you so long to answer that question Mr Poedjokerto? The answer to my question was that there were 8 cell punnets inside the carton, correct?
Mr Poedjokerto:        Yes.
I am mindful of the fact that the applicant was not legally represented in these proceedings. However, even allowing for Mr Poedjokerto’s noticeably limited knowledge of the procedural requirements which govern the conduct of an opposition, I must say it is regrettable that the only justification provided by him as to why the applicant had not seriously attempted to counter many aspects of the evidence presented on behalf of the opponent was because “they [the opponent] cannot prove it”. While not bearing directly on the issue of credibility, the consequential inadequacies in the evidence put forward by the applicant has needlessly hindered my determination of whether or not to grant the licence it seeks. I would also comment that on several occasions Mr Poejokerto stated that he would be able if necessary to adduce further evidence to prove certain points, and even went so far as suggesting that it was open to Mr Duggan to obtain this evidence himself from Roto Plastic in Indonesia. I made it absolutely clear to Mr Poedjokerto in this connection that my decision in these proceedings could only take account of the evidence already before me. I also afforded him every opportunity to reflect on whether there was anything more he wished to add to his evidence given under cross-examination.
On the other hand, the evidence of Mr Brown and Mr Grey for the opponent to my mind reflects a conscious effort on their part to remain impartial and truthful. I do not detect any suggestion of a deliberate attempt by them either individually or collectively to reconstruct events in the light most favourable to the opponent.
ISSUES FOR DETERMINATION
The opponent’s primary submission is that the applicant is not a person to whom subsection 223(9) and regulation 22.21 apply. The opponent submits this is due to the absence of any evidence which confirms that the applicant exploited, or took definite steps by way of contract or otherwise to exploit, the subject matter of the patent “because of” the failure by the opponent to renew the patent on 23 February 2008 and the ceasing of the patent that resulted.
In particular, the opponent contends that:
- The applicant has not led any evidence to establish that they became aware of the patent or its status at the times alleged;
- The applicant has not led any evidence to establish that the moulds identified in the invoice exhibited as VV2 were either manufactured or used during the ceased period and, if used, would produce an article embodying the invention claimed by the patent;
- The applicant has not led any evidence to establish that Benara or Oasis had tested articles embodying the invention claimed by the patent during the ceased period;
- The applicant has not led any evidence to establish that the punnets described in the purchase order from Benara exhibited as VV5 embodied the invention claimed by the patent; and
- The applicant has not led any evidence of commercial transactions or other dealings with Oasis, other than the sales order exhibited as VV6 for articles which the applicant has failed to establish embodied the invention claimed by the patent, and the bank statement exhibited as VV7 which the applicant has failed to establish is related to the sales order.
Did the applicant have knowledge of the status of the patent at all material times?
The opponent has argued that, as in Law v Razer, the applicant has not established that it took actions to exploit the patent consequent upon it becoming aware that the patent had ceased. Mr Poedjokerto has declared that he was first alerted to the existence of the patent by Benara in early 2008. He explained during cross-examination that this information was provided by a “sales rep” of Benara in the context of the proposed business venture between it and the applicant regarding the supply of multi-compartment plastic plant trays. Mr Poedjokerto stated that on receiving this advice (which included the patent number), he downloaded and read a copy of the patent. He expressed the belief that this occurred in January 2008. The opponent did not question this evidence.
There is no suggestion by Mr Poedjokerto that the status of the patent was investigated by him at this time. However, although the matter was not pressed by the opponent, a search in early 2008 of publicly available information provided by IP Australia would not have revealed that the patent had ceased. At most it would have shown that the renewal fee due on 23 February 2008 had not been paid, and even if this were the case the “grace period” in which to pay the renewal fee was not due to expire until after mid-2008. It certainly would not have revealed that an application for an extension of time in which to pay the overdue renewal fee had been filed. In any event, the “conscious effort” purportedly made by Mr Poedjokerto to ensure that the multi-compartment plastic plant trays which the applicant intended to supply to Benara did not infringe the patent clearly suggests an assumption on his part that the patent was in force at the time he became aware of its existence.
Mr Poedjokerto additionally declares that he was prompted by subsequent events to check the status of the patent only to find that it had ceased. He asserts the ceased status of the patent was confirmed by Wrays in January 2009 and “an officer from IP Australia” a few months later by phone. The opponent has rightly pointed out that this account of events has not been corroborated by direct evidence.
It is further asserted by Mr Poedjokerto that after being contacted by Oasis in March 2010, he again checked the status of the patent to discover that it had been reinstated. Unfortunately, the copy of the fax transmission sent by Oasis on 9 March 2010 which Mr Poedjokerto has exhibited as VV8 in support of this assertion is almost completely illegible and is consequently of no assistance to him. Nevertheless, he claims this “shocking” discovery motivated him to seek an explanation from IP Australia regarding the circumstances under which reinstatement of the patent had occurred. The opponent has argued that Mr Poedjokerto’s further recollection of events is also unsubstantiated. They also submit that Mr Poedjokerto should have been alerted to the ceased status of the patent and the potential for its reinstatement when in March 2009 he expressed an interest in purchasing the business and assets of the immediate predecessor of the opponent after it had fallen under external administration.
Mr Poedjokerto refuted this submission during cross-examination, but the weight of his evidence on this matter is greatly diminished by the unsatisfactory nature of VV1 which simply exhibits the cover sheet of the Information Memorandum sent to him by the external administrators. Nevertheless, official records confirm that Mr Poedjokerto wrote to IP Australia on 9 and 11 March 2010 for the purpose he has stated. Relevantly, in the first of these communications Mr Poedjokerto refers to a call to IP Australia “around March to April 2009” (which generally coincides with the time he approached the external administrators as a prospective buyer) when he was advised that the patent had ceased, and pleads his ignorance of the possibility of restoring the patent under the extension of time provisions of the Act which he attributes to information purportedly given to him “by your officer last year”. A delegate of the Commissioner replied in writing to Mr Poedjokerto on 24 March 2010. As Mr Poedjokerto has deposed, that letter drew his attention to the provisions of subsection 223(9) and regulation 22.21.
While not expressing any opinion on whether or not Mr Poedjokerto simply misinterpreted information initially provided to him on whether the patent could be revived, based on the substance of the official records discussed above I am satisfied that Mr Poedjokerto did obtain confirmation from IP Australia in March/April 2009 that the patent had ceased.
However, there is no evidence to substantiate Mr Poedjokerto’s claim that he was initially advised of the ceased status of the patent by Wrays in January 2009. Most relevantly, the fact that Mr Poedjokerto became aware that the patent had ceased is not of itself sufficient to establish that the applicant took actions to exploit the invention based upon that status of the patent.
Did the applicant exploit the invention because of the ceasing of the patent?
These proceedings have been triggered by the applicant’s claim that it exploited or took definite steps to exploit the invention the subject of the patent only on becoming aware that it had ceased such as to enliven the right to a licence. Somewhat predictably, the opponent has submitted that in view of the unconventional nature of the present proceedings, the applicant carries the legal burden of proving that it exploited the patent because of its ceased status. I agree since it seems to me that similarly to the onus which rests with a requestor to prove joint entitlement in an action brought under section 32, it is for the applicant to establish that is has satisfied the prerequisite conditions for the grant of a licence.
The following exchange provides some insight into the applicant’s alleged course of conduct:
Mr Duggan:In early 2008 after Benara told you about the patent number and after you printed it out from the internet that it was at that time that you began to exploit the patent?
Mr Poedjokerto:        Yes.
Mr Duggan:But just to be clear on that, it’s at that time that you contacted someone to produce the mould for the patent, that is, in early 2008?
Mr Poedjokerto:        Yes.
Mr Duggan:And our case is that in early to mid 2008 that you had started exploiting the patent and selling the punnets that were in breach of the patent.
Mr Poedjokerto:        I strongly deny that because it’s much easier to make the product as it is rather than new design. I haven’t been able successfully to make an invention that will not include the patent so obviously when the patent lapsed I’m happy because it’s much easier to copy that.
The applicant has relied in the main on exhibits VV2 to VV7 to sustain its case. All but one of these exhibits is clearly dated after the time at which the evidence has confirmed Mr Poedjokerto became aware that the patent had ceased. However, the exhibits themselves tend to be imprecise and there is no evidence which directly links the exhibits to one another or, most notably, to the invention.
The applicant’s case begins with the Roto Plastic invoice exhibited as VV2 for the supply of a small number of moulds “as per drawings” to the applicant. However, copies of those drawings have not been put forward in evidence which leaves the technical details or the intended purpose of the moulds unexplained. Mr Poedjokerto’s assertion that “the invoice provides all the necessary information” without the need for the drawings does not detract from the fact that there is simply no evidence that the moulds were ever supplied to the applicant and, if supplied, were used by it during the ceased period of the patent to manufacture products corresponding to the invention.
The applicant next turns to exhibits VV5 and VV6 which it says substantiates that it had sold products embodying the invention to Benara and Oasis. The first of these exhibits is a purchase order from Benara for the supply of a large quantity of punnets, while the second exhibit is the applicant’s sales order to Oasis for an unknown quantity of punnets (since this information has been unexplainably redacted from exhibit VV6). There is no evidence of a subsequent purchase order from Oasis, although this can possibly be inferred from the applicant’s bank statement exhibited as VV7. The punnets are designated in each of exhibits VV5 and VV6 by respective product codes and Mr Poedjokerto acknowledged that the coding of exhibit VV5 was used by the opponent. He explained though that he was given the codes by Benara and Oasis during their dealings with the applicant, but did not know what the codes meant. However, nothing presently turns on this. Relevantly, the applicant has not proffered any evidence to establish that its supply of punnets to either Benara or Oasis constituted relevant exploitation of the invention. Exhibits VV5 and VV6 essentially go no further than providing a product reference and in the absence of confirmatory evidence cannot be said to relate to punnets within the scope of the claims of the patent. It even appears unlikely that the punnets supplied by the applicant were manufactured using the Roto Plastic moulds since exhibits VV5 and VV6 precede the invoice of exhibit VV2 by a number of months.
Mr Poedjokerto deposes that some nurseries in Australia have purchased “large numbers” of plant containers which embody the invention from the applicant. However, the applicant has not produced any evidence of dealings or commercial transactions with customers other than Benara and Oasis. Further, during cross-examination Mr Poedjokerto departed significantly from his written evidence regarding the alleged purchases:
Mr Duggan:I’m right in saying am I not that no multi-compartment punnets have ever been provided to either Benara or Oasis. Is that correct?
Mr Poedjokerto:        During 2009, yes.
Mr Duggan:               When do you say that the first multi-compartment punnets were produced?
Mr Poedjokerto:        Some prototypes were produced between early 2009 to June 2009.
Mr Duggan:               What about commercial quantities?
Mr Poedjokerto:        Not yet.
Mr Duggan:I want to suggest you didn’t provide them with samples until after July 2009.
Mr Poedjokerto:        I deny that.
Mr Duggan:And how many samples did you provide Benara with?
Mr Poedjokerto:        At least 5 or 6 times.
Mr Duggan:Yes, but how many of the punnets did you provide to Benara?
Mr Poedjokerto:        Something like 50 or 100.
Mr Duggan:And did you provide do you say punnets to Oasis?
Mr Poedjokerto:        Yes.
Mr Duggan:And was that of a similar quantity – 50 to 100 punnets as a prototype?
Mr Poedjokerto:        Yes.

This evidence seems to have little if anything to do with the sale of punnets by the applicant to Benara and Oasis. Instead, the prototype samples were presumably provided to them for the purposes of testing only which Mr Poedjokerto declares in support of the licence application had been undertaken by the end of November 2009. Even if I am wrong in this, I fail to see any connection between the provision of the samples and the sales allegedly demonstrated by exhibits VV5 and VV6. The purchase order of exhibit VV5 is for the supply of over 600,000 punnets to Benara which is far in excess of the relatively meagre number of samples provided to it by the applicant. The same might also be said of exhibit VV6 which in addition seemingly pre-dates the time at which Mr Poedjokerto was first informed that the patent had ceased, and thus can be discarded as positively verifying that the actions taken by the applicant in its dealings with Oasis were based upon that status of the patent. Leaving these significant evidentiary gaps aside, the applicant has still erred in not adducing any evidence to show that the provision of the samples to Benara and Oasis amounted to exploitation of the invention. Put simply, there is nothing in the applicant’s evidence to even remotely suggest that the samples it provided to Benara and Oasis fell within the scope of the claims of the patent.
Conclusion as to whether the applicant exploited the invention because of its ceased status
The evidence on which the applicant relies even when viewed in its most favourable light merely indicates that the applicant placed an order for some moulds from Roto Plastic. The physical nature or intended purpose of these moulds remains unknown. The applicant’s evidence also shows that it had entered into discussions with Benara and Oasis with the intention of supplying punnets on a commercial scale to them. However, there is no firm evidence of any commercial dealings between the applicant and either Benara or Oasis, and the most that can be said is that they were in due course provided with prototype samples of punnets produced by the applicant. This viewpoint is entirely consistent with Mr Poedjokerto’s evidence that the applicant did not produce any of its own punnets in 2008, and by the following year had progressed no further than producing prototype samples in relatively small quantities. Most relevantly, the applicant has failed to establish that any products designed and manufactured by it utilising the Roto Plastic moulds or other means and supplied to Benara and Oasis embodied the invention. In fact, the applicant has not even shown that the Roto Plastic moulds possessed this capability.
It follows from the foregoing that the evidence tendered by the applicant goes nowhere near substantiating that it is a person to whom subsection 229(3) and regulation 22.21 apply and, accordingly, I am unable to find on the basis of that evidence that the applicant is entitled to the grant of a licence to exploit the invention.
This brings me to perhaps the most unusual aspect of these proceedings. The opponent has contended that the applicant’s true intention was to exploit the invention without regard to the status of the patent at all, and had in fact engaged in infringing conduct before Mr Poedjokerto became aware that the patent had ceased. This, so the argument runs, further attests to the non-existence of the causal link between the ceasing of the patent and reliance on that status by the applicant necessary to enliven the right to a licence.
The evidence adduced by the opponent to support the assertion of infringement has revealed further anomalies in the applicant’s evidence regarding its conduct which suggests that there may be some force to this assertion. I note in particular Mr Poedjokerto’s unconvincing evidence given under cross-examination as to the source of either the carton of exhibit GMB13 or the punnet of exhibit GMB9, and the applicant’s failure to put on formal evidence from Mr Tillbrook or otherwise attempt to disprove the evidence of Mr Grey and Mr Brown.
Nevertheless, I have already found that the applicant has not shown that it exploited or took definite steps to exploit the invention subsequent to becoming aware that the patent had ceased. It is therefore unnecessary for me to ultimately decide whether the applicant had exploited the invention prior to the cessation of the patent.
CONCLUSION
The evidence on which the applicant relies is insufficient to demonstrate that it exploited or took definite steps to exploit the invention because of the ceased status of the patent. The evidence consequently does not establish that the applicant is a person to whom subsection 223(9) and regulation 22.21 apply. It follows that the applicant is not entitled to a licence to exploit the subject matter of the patent.
COSTS
I see no reason to depart from the usual practice that costs follow the event. The applicant has been unsuccessful in confirming itself to be a person entitled to the grant of a licence to exploit the subject matter of the patent. I therefore award costs under schedule 8 against the applicant.
O L Haggar
Delegate of the Commissioner of Patents