George Stack v Davies Shephard Pty Ltd and GSA Industries (Aust) Pty Ltd
[1996] APO 14
•27 February 1996
official notice
decision of a deputy commissioner of patents
Petty Patent : 645740 in the name of George Stack
Title: Water Meter Assemblies
Action: Further evidence following a previous decision. Objection by the s.28 informants (Davies Shephard Pty Ltd, and GSA Industries (Aust.) Pty Ltd) to its admissibility.
Decision: Issued .
Abstract: Evidence should only be admitted if there is a reasonable basis to believe that the evidence would determine the issue between the parties;
Issues of delay of the proceedings, and whether the evidence could have been obtained earlier, effectively exhausted by the earlier decision affording the patentee an opportunity to submit further evidence;
The further evidence is submitted in a context where there have been a number of findings in respect of the patentee’s previous evidence. Simple assertions in the new evidence would not be sufficient;
The declarations submitted as further evidence, both individually and jointly, do not establish a prima facie case for a finding that Mr Stack was entitled to the grant of the petty patent.
Evidence not admitted. Petty patent was not granted to an entitled person. This finding not capable of rectification by amendment. Application to extend the term of the petty patent refused.
Costs awarded against the petty patentee. Observed that an award of costs was not the exercise of a judicial power.
patents act 1990
decision of a deputy commissioner of patents
Re:Petty Patent No. 645740 in the name of GEORGE STACK, and section 28 notices by DAVIES SHEPHARD PTY LTD, and GSA INDUSTRIES (AUST.) PTY LTD.
background
In my decision dated 5 January 1996 I made certain preliminary findings in relation to whether petty patent 645740 was granted to an entitled person. I concluded that decision by providing the patentee three weeks to file and serve a request for further evidence in support of his entitlement to the patent, with the informants having thereafter an opportunity to inter alia request to be heard on the admissibility of that evidence.
On the last day of the period allowed the patentee filed three statutory declarations. It appears that the patentee did not serve the evidence on the informants within that time, but the informants subsequently received copies of the evidence. Whilst the actions of the patentee were not in strict compliance with my directions (and may therefore be subject to some criticism), I do not consider it appropriate to exclude the evidence merely because of that procedural technicality.
Peripherally, I note drafts of those declarations were filed several days previous with respect to related petty patent 662254, with a request that the Commissioner advise “if the aforesaid satisfies your requirements for evidence which establishes that George Stack was entitled to the grant of Petty Patent 662284. If further or other alteration is required to the documentation please advise me at once.” At the hearing the informants sought to refer to this, and Mr Abaza objected. I merely refer to this here for completeness, in the knowledge that all parties and the Commissioner are aware of the correspondence.
Thereafter the informants sought to be heard on the issue of admissibility of that evidence. The hearing took place on 21 February with all parties appearing by phone. The patentee was represented (as before) by Mr Abaza; both informants were represented by Mr B Caine of counsel instructed (as before) by Mr T Collins (patent attorney of Phillips Ormonde & Fitzpatrick).
Submissions
The patentee’s submissions may briefly be summarised as:
the informants have no standing to make any objection. Any standing is dependant upon them establishing their rights to be granted the patent;
Davies Shephard is, or should be, estopped because of an earlier undertaking;
it is beyond the Commissioner’s powers to entertain further any submissions that Cornish was an inventor – as Cornish was not a party to the action. Further, it is not the proper function of the Commissioner to act judicially in resolving conflicts; and
the Commissioner’s function is to be reasonably satisfied of matters. On the evidence and according to law, he should be so satisfied.
The informants submissions may briefly be summarised as:
To determine whether the evidence ought to be admitted, I should apply the same criteria that have been developed for applications for further evidence in substantive opposition matters [ie reg 5.9 (1990 Act) or reg 59 (1952 Act)]
there is no apparent reason why the evidence now presented could not have been put earlier;
there are no ‘special characteristics’ about the evidence;
introducing the evidence would only serve to protract the proceedings unnecessarily; and
the evidence would not determine the issue between the parties.
Mr Caine elaborated these issues in some detail, especially with respect to the final point.
In respect of the majority of these submissions, I make the following observations:
The matter has arisen as a result of an inter parte hearing involving all three parties. It is in effect a continuation of the earlier proceedings, and I have no doubt that the informants have a right to appear and be heard in the matters arising;
I do not consider the undertaking said to have been made by Davies Shephard to be sufficient basis for establishing estoppel in the matters before me;
In reaching my decision in this matter I am conscious of the distinction between administrative powers (which I am required to exercise), and judicial powers (which I have no authority to exercise); and
Much of Mr Cain’s submissions, referring as they did to a long line of precedent with respect to the admission of further evidence in proceedings before the Commissioner, was based on criteria that are appropriate when there has been no prior consideration of the matters in dispute. In particular, Mr Caine raised the issues of protraction of the proceedings, and whether the evidence could have been collected earlier. In the present circumstances I consider these issues to have been largely exhausted, as I have already provided the patentee with an opportunity to provide further evidence. To exclude the evidence on these bases would in my view be tantamount to a reconsideration of my earlier decision to provide an opportunity to file and serve further evidence – which is not permissible (see R. v. Commissioner; ex parte Mole Engineering Pty. Ltd 147 CLR 340)
However I agree with Mr Caine that the evidence should only be admitted if there is a reasonable basis to believe that the evidence would determine the issue between the parties – in particular, whether there is a reasonable basis for me to conclude that the evidence may be sufficient to establish the entitlement of Mr Stack. If such is not the case, there is nothing to be gained by admitting the evidence for further consideration Accordingly, I shall review the evidence submitted to establish whether it is prima facie sufficient to establish the entitlement of Mr Stack.
The Evidence
In my earlier decision I stated:
“Given the specific concession that there are no other documents presently in existence to support Stack’s entitlement, it would seem that any further evidence is likely to be unsupported by documentation contemporary with the events discussed above, and potentially be of limited probative value.”
The evidence now sought to be admitted has been submitted in a context where I have made a number of preliminary findings based on the patentee’s previous evidence. The new evidence is intended to avoid those preliminary findings. But to achieve this, I do not consider that simple assertions regarding the issues at hand (albeit by way of a statutory declaration) would be sufficient. Rather I think a heavy onus lies with the patentee’s declarants to provide reasonable support for any assertions made.
The evidence sought to be included are declarations by:
Alan Grieves, a joint inventor;
G Miles, a director of G S Technologies;
Messrs Norton, Miles, Stack, Tweedale and Grieves (jointly), all directors of G S Technologies; and
G Stack,
and I shall consider each declaration in turn.
Declaration by Grieves
In his declaration, Grieves asserts that he and Stack are the true and first inventors of the petty patent - but he provides no evidence whatsoever to support that assertion. He then states that, in August 1990:
“it was agreed between myself and George Stack that I should transfer to him all my right title and interest in and to the intellectual property associated with the work which had been performed and was to be performed in respect of water meter assemblies and products associated therewith and that an application would be made by George Stack for patents in respect of the intellectual property of myself and George Stack”
“On about 5 September 1990 I executed a document ... by which I intended to record the agreement ..... but which did not specifically refer to any Patent because none had been granted at that time.”
That agreement is exhibited. However there are a number of significant problems associated with it. Firstly, it states:
The assignor (Grieves) is the author of the original artistic work, as illustrated in the schedule attached hereto and marked “APPENDIX A”.
However, no “APPENDIX A” has been provided, so I am unable to gain any constructive knowledge of the subject of that agreement, and am therefore unable to determine the relevance of the document to the present proceedings.
However, assuming that the subject of the agreement is relevant, it is noteworthy that the whole agreement is framed in the context of artistic works. There are numerous references to copyright –including a reference to the ‘right to apply or reproduce the Work as a Trade Mark Industrial Design or otherwise to any article or articles’, and to ‘register the Work in its own name under the Trade Mark Copyright or Industrial Design laws of any country of the world’. Given the extensive list of industrial property rights enumerated, and their consistency with copyright, the document is consistent with the work in question being an artistic work. In this context, the omission of any reference to patents is not surprising.
Grieves asserts that the reason the document did not refer to any patent was because none had been granted. Interestingly the first provisional application (PK2036) was filed a week before the document was executed. Prima facie the parties must have been aware of the issue of patent rights well before this agreement was executed. If patent rights were intended to be covered at the time that document was executed, it seems extraordinary that it makes no reference to those rights – given the extensive recitation of other intellectual property rights.
In my view, whatever was the subject of the agreement between Grieves and Stack dated 5th September 1990, that agreement clearly does not contemplate any assignment of patent rights. To the extent that Grieves now declares that patent rights were covered by that assignment, an objective construction of that document does not support that contention. I strongly prefer the plain meaning of the contemporary document recording the agreement, to Grieves’ current interpretation of what that document was intended to cover.
For these reasons, I do not consider that the declaration by Grieves establishes a prima facie case for a finding that he assigned his interests in the invention (as a joint inventor), to Mr Stack prior to the grant of the Petty Patent.
Declaration by Miles
Miles declares that:
‘On 7 September 1990 George Stack agreed in a Minute of G S Technology Pty Ltd prepared by me that all future intellectual property held by him from himself and Alan Joseph Grieves in the intellectual property for water meter assemblies which had been developed should become the property of G S Technology Pty Ltd.’
Miles does not exhibit the minute, so it is not possible to confirm this assertion. It is however noteworthy that the extract from the company minutes dated 7 Sept. 1990 (quoted in full in my earlier decision) appears to refer to the same matter – and makes no mention whatsoever to Grieves.
Significantly, with regard to the rights of Grieves the assertion only relates to those rights ‘held by him’ (ie Stack). As discussed above, the evidence from Grieves is insufficient to establish that there was an assignment of patent rights from him to Stack on 5 September (or any other date). Consequently, whatever else might have been assigned on 7 September, there is no basis for concluding that Grieves’ rights were assigned to G S Technology Pty Ltd by Stack on that date.
Accordingly I do not consider that the declaration by Miles prima facie establishes Mr Stack’s entitlement to the grant of the Petty Patent.
Declaration by Norton, Miles, Stack, Tweedale and Grieves
This declaration is a joint declaration by 5 directors of G S Technology. They declare that George Stack as inventor was entitled to the grant of petty patent 645740 (and 662284) – without providing any information substantiating the basis of their belief, let alone establishing that they understand the requirements for a person being entitled to the grant of a patent. The declaration does no more than assert a conclusion, without providing any material evidence sufficient to substantiate that conclusion.
Accordingly I do not consider that the declaration by Norton et al prima facie establishes Mr Stack’s entitlement to the grant of the Petty Patent.
Declaration by Stack
This declaration refers (like Grieves) to the document dated 5 September as the basis for the rights of Grieves being assigned to him. So far as that document is concerned, my comments above regarding that document apply equally here. Similarly, to the extent that Stack now declares that patent rights were covered by that assignment, an objective construction of that document does not support that contention. I strongly prefer the plain meaning of the contemporary document recording the agreement, to Stack’s current interpretation of what that document was intended to cover.
Accordingly I do not consider that the declaration by Stack prima facie establishes his entitlement to the grant of the Petty Patent.
The four declarations together
I have individually considered the four declarations sought to be admitted into evidence. It seems to me possible for a mere assertion of fact to gain some weight if declared to by a number of declarants – particularly if there is clear independence of the declarants from each other, and if the declarants have nothing of substance to gain from the assertion of fact. However these declarations are all executed by directors of G S Technology Pty Ltd, the company to which the petty patent has purportedly been assigned. The relationship of the declarants as co-directors of the company minimises their level of independence (as is clearly illustrated by their joint declaration). Further, as directors of the company to which the invention has purportedly been assigned, they clearly have something to gain from the facts asserted.
Accordingly, whilst it is appropriate to accord some greater weight to the assertions made by reason of the corroborative nature of the four declarations, I do not think the weight is increased significantly. On the other hand the evidence is fully consistent with there having been no assignment of patent rights from Grieves to Stack in the document of 5 September 1990, and I strongly prefer this evidence to the assertions of entitlement made by the declarants.
Accordingly I do not consider that the declarations, either individually or jointly, establish a prima facie case for a finding that Mr Stack was entitled to the grant of the petty patent.
Entitlement of Cornish
In the above discussion I have only considered the issue of the entitlement flowing from Grieves. There is an additional issue of entitlement from Cornish in so far as claim 3 is concerned. Without considering the evidence in any depth, it is not readily apparent to me that the further evidence establishes any entitlement by Stack to the contribution by Cornish.
Decision
In my view, the further evidence of the patentee ought only be admitted if there is good reason to believe that it may establish the entitlement of Mr Stack. On review of the evidence sought to be admitted, I am satisfied that there are a number of deficiencies in that evidence such that it does not establish a prima facie case that Mr Stack was entitled to the grant of the petty patent. Accordingly I refuse to admit the further evidence, on the basis that nothing will be gained in the proceedings by the admission of that evidence.
As a result of my refusing to admit that further evidence, it now remains for me to conclude the issue of entitlement that was left outstanding in my earlier decision. For the reasons expressed in my earlier decision, I now find that petty patent 645740 was granted to a person who was not entitled to be granted the petty patent.
As I indicated in my earlier decision, I believe that this finding is not capable of being rectified by way of amendment. Accordingly I refuse to extend the term of petty patent 645740.
Costs
In an award of costs by the Commissioner, costs usually follow the event – in this case, against the petty patentee. The only special factor of note is that this application for further evidence arose essentially through the petty patentee’s recognition at the earlier hearing of difficulties which they sought to have addressed through further evidence. This factor does not mitigate against an award of costs against the petty patentee.
In correspondence with regard to my earlier decision, Mr Abaza for the petty patentee raised the question whether the power of the Commissioner to award of costs [s.210(d)] and s.211, was a judicial power rather than an administrative power, citing Brandy v Human Rights and Equal Opportunity & Ors, a decision of the High Court dated 23 February 1995. In my view the award of costs by the Commissioner is not the exercise of a judicial power for a number of reasons. One particular reason is that an award of costs by the Commissioner does not bring with it any power of enforcement. Section 211 provides the mechanism for enforcement, and this entails a separate court action in which inter alia the debt would have to be proved – see also re Registrar, Social Security Appeals Tribunal & Ors v ex parte Townsend, a decision of the High Court dated 7 July 1995.
Finally, under s.210(d) the Commissioner is empowered to award costs against a party to proceedings before him. In the present case, there is a question whether the relevant party in respect of the petty patent is George Stack or G S Technology Pty Ltd – and my earlier decision was ‘predicated on the name of the person to whom the petty patent was granted’. The petty patent was granted to George Stack; he was the patentee of record when the section 28 notices were filed; and it was he who filed evidence in response to the s.28 notices. Thereafter, and shortly before the earlier hearing, the Commissioner recorded on the Register an assignment to G S Technology Pty Ltd. However I have found that Mr Stack was not a person entitled to be granted the patent. Consequently I do not believe that Mr Stack had any assignable rights in the petty patent – and therefore the assignment recorded in the Register is of no effect. (I observe here that s.195(1) provides that the Register is prima facie evidence of any particulars registered in it; my findings override this prima facie status.) Accordingly Mr Stack remains the patentee of this petty patent (despite the purported assignment) and is consequently a party to these proceedings. As to whether G S Technology Pty Ltd is also a party to these proceedings – as the purported assignee I think the preferable view is that it also is a party.
Accordingly I award costs against Mr G Stack and G S Technology jointly and severally. As both informants were represented by the same counsel and same patent attorney, the amount awardable to each of the informants is limited to 50% of that allowable under Schedule 8 of the Patents Regulations.
D Herald
Deputy Commissioner of Patents
Solicitor for the patentee : A. Abaza
Patent attorneys for the informants : Phillips Ormonde & Fitzpatrick
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