Glass Block Constructions (Aust) Pty Ltd v Armourglass Australia Pty Ltd
[2005] ADO 1
•6 January 2005
OFFICIAL NOTICE
DECISION OF A DELEGATE OF THE REGISTRAR OF DESIGNS
Applications : No. 1031/03 and 1054/03 in the name of GLASS BLOCK CONSTRUCTIONS (AUST) PTY LTD
Title: Security Glass Block
Action: Request by ARMOURGLASS AUSTRALIA PTY LTD under section 20B of the Designs Act 1906 for a direction of the Registrar that the applications are to proceed in its name
Decision: Issued 06 January 2005
Abstract
The applicant for the designs was a manufacturer of glass bricks, and the section 20B requestor manufactured toughened glass products. The two parties had cooperated in the design and manufacture of toughened glass bricks. The arrangement (which was a verbal one styled a Joint Venture Agreement) involved tendering for projects requiring toughened glass bricks, and the applicant would provide standard glass bricks to the requestor who would manufacture them into the finished product at market prices for use by the applicant in projects for which it had successfully tendered.
An earlier design had been registered in the joint names, but the requestor had appeared to the present applicant to be unenthusiastic about seeking design protection. An application for a later design had been first filed in Singapore by a company related to the present applicant, and the applicant for that application was later changed to that of the present applicant. The final date for filing a Convention application in Australia based on the Singapore application was imminent, and the present applicant filed the Convention application for this design in Australia in its name only.
The later design had arisen out of the efforts of a person who was a director of the applicant company and a person employed by the requestor company. The latter person had subsequently ceased employment with the requestor company and had provided evidence for the applicant. Each of these persons was cross-examined at the hearing. Each was held to be a joint author of the later design, and thus the requestor was entitled to be a joint applicant of the design as a consequence of being the employer of a person who had made the design (subsection 19(3) of the Designs Act 1906.
It was also held that the circumstances of the case did not bring into play sub-section 19(2) of the Designs Act 1906, since the requestor, on the facts, had not made the design under an agreement for valuable consideration. Also the terms of the joint venture agreement between the parties did not alter the entitlement of the parties as the agreement did not appear to extend the entitlement of each party beyond what they were already entitled to by operation of subsections 19(1) and 19(3) of the Designs Act 1906.
Costs were awarded against the applicant.
DESIGNS ACT 1906
DECISION OF A DELEGATE OF THE REGISTRAR OF DESIGNS
Re:Design Application No.s 1031/03 and 1054/03 by Glass Block Constructions (Aust) Pty Ltd and a request by Armourglass Australia Pty Ltd under section 20B of the Designs Act 1906 for a direction of the Registrar that the applications are to proceed in its name.
BACKGROUND
Design applications 1031/03 and 1054/03 were filed on 24 March 2003. The applicant in each case is Glass Block Constructions (Aust) Pty Ltd (GBC). Application 1054/03 is a Convention application which obtains its priority from Singapore design application D2002/001117/1 filed on 24 September 2002 which has since proceeded to registration. Application 1031/03 is not a Convention application. Neither application has yet been subjected to examination.
On 26 May 2003 Armourglass Australia Pty Ltd (AA) filed a request for a direction of the Registrar of Designs under section 20B of the Designs Act 1906 that they be joined with GBC as co-applicants of applications 1031/03 and 1054/03. In the case of application 1054/03, GBC have resisted AA being added as co-applicants.
After a drawnout and somewhat disordered evidence filing process, the matter came to a hearing in Perth on 11 and 12th of November 2004. GBC were represented by Mr R.J.L. McCormack of Counsel assisted by Mr S. Krouzecky, patent attorney of Wray & Associates, Perth. AA was represented by Mr A.D. Lucev of counsel, assisted by Jason DeSilva of Murfett & Co., Perth, Solicitors for AA. Several other people connected with each of the parties were also present, including Mr Anthony John Sharp, who had provided two statutory declarations for GBC in relation to this matter and who had been summonsed by AA to appear at the hearing to be cross-examined, and Mr William Hugh Burke, who had also provided two statutory declarations for GBC and who was also cross-examined at the hearing.
THE DESIGN
The design of each application in suit relates to a glass brick which is commonly used in building construction to form walls and other structural elements made up of an array of such bricks. The particular brick of the design is designed to be used in situations where greater structural strength is required, such as in gaols and banks. It obtains its strength by having laminated to it layers of toughened material. The present applications, as applications proceeding under the Designs Act 1906 which have not been registered, are not yet open to public inspection. GBC has declined to reveal to AA the specifics of the designs which are the subject of applications 1031/03 and 1054/03.
DETAILED HISTORY
As already stated, AA filed its section 20B request on 26 May 2003. It was accompanied by copies of three items of correspondence dated 19 March 2003, 28 March 2003 and 3 April 2003, respectively. The first of these is a letter from Wray & Associates seeking AA’s signing of a deed of assignment which would have assigned all of AA’s overseas interest in their joint intellectual property rights (present and future, and clearly including design application 1054/03) with GBC to GBC. The second is a letter from Mr Burke (who is a director of GBC) to Mr Franco (also referred to as “Frank”) Tenaglia, a director of AA. This letter, whose tone comes across as a mixture of plea and threat, asks Mr Tenaglia to state whether “you would like me to withdraw these design applications”, which appear to be 1054/03 and the corresponding Singapore application. The third item of correspondence is a letter from Murfett & Co. requesting GBC to take all necessary steps to have AA made joint applicant of any design registration already made by GBC upon threat of legal action.
On 16 June 2003 the Deputy Registrar of Designs wrote to Wray & Associates stating that AA (although he incorrectly referred to GBC) appeared to have a claim to be joint applicants, and requesting GBC “to make suitable amendments to the applications, or alternatively to provide information or submissions in relation to this matter”, and giving GBC until 4 July 2003 in which to do so.
Wray & Associates in the guise of Mr Krouzecky duly responded. He stated that the correspondence provided by AA is selective and only represents a small proportion of the relevant correspondence, and that the letter from Wray & Associates had been based on a misunderstanding of the facts. He went on to concede joint ownership of AA in application 1031/03, but maintained that the sole ownership of application 1054/03 resided in GBC. However he provided no evidence in support of this position, possibly hoping that AA would be content with the concession made in relation to application 1031/03. If this did not turn out to be the case he offered to provide such evidence “upon being provided with a further opportunity to do so.”
A delegate of the Registrar of Designs informed both parties on 16 July 2003 that she intended to make a direction under section 20B that application 1031/03 is to proceed in the name of both AA and GBC, stating however that she considered she had insufficient evidence before her to make a similar direction under section 20B in regard to application 1054/03. She asked AA to advise her within 21 days whether it intended to pursue its claim of ownership. Upon having ascertained that AA did intend to pursue ownership of application 1054/03, on 14 August 2003, the Registrar invited both parties to provide evidence to that end within 28 days.
On 12 September 2003 Mr Krouzecky wrote to the Registrar of Designs with the revelation that application 1031/03 had been filed in error, and the design that was the subject of that application was an old one which had been in the public domain well before the priority dates of applications 1031/03 and 1054/03. According to Mr Krouzecky’s account, the error had been realised “literally minutes after the application left our office”, and the correct filing (1054/03) was then made. Accordingly, Mr Krouzecky requested that application 1031/03 be withdrawn, and more importantly submitted that the onus had now shifted to AA to establish its entitlement to the design. The response of the Registrar to this was to allow GBC 14 days to provide evidence establishing that 1031/03 had been publicly available at the time alleged by GBC.
Some further correspondence ensued in which AA requested that withdrawal of application 1031/03 not be done, and GBC expressed reluctance to provide evidence of the publication of 1031/03 because that publication had been by AA and GBC were concerned about “commercial confidences”.
On 30 October 2003 the Registrar decided that in relation to this matter “there are serious issues in relation to ownership that need to be decided” and set in train a formal hearing process. That involved both parties being allowed one month in which to provide evidence and submissions in support of their position, whereupon the Registrar would exchange that evidence between the parties and allow the parties one month to file a response and then set the matter for hearing.
AA filed evidence on 29 November 2003 and 4 December 2003, consisting principally of a statutory declaration by Kim Ashe, a director of AA. On 8 December 2003 GBC requested an extension of time of 3 months in which to file its evidence. The Registrar thought this excessive, and in an official letter dated 11 December 2003 allowed 2 months instead. In allowing this period of extension the Registrar commented “the essential issue in this dispute appears to be the publication of the first design”, an assessment which was not to be borne out by subsequent events.
In a letter dated 12 February 2004 GBC foreshadowed the filing of a statutory declaration by William Burke the following day, and asked for an extension of time of one month to complete the filing of evidence. The Registrar’s response to this (given the same day) was generally unsympathetic to the request, and advised GBC that it would need to apply for leave to serve further evidence under section 37. GBC’s response (also given the same day) was to advise that the further evidence was a statutory declaration from an individual “known to both parties”, and that it would prefer to keep the identity of the individual secret until the execution of the statutory declaration. (It later emerged that this individual was Anthony (Tony) Sharp.) GBC expressed the view that the further evidence was “central to determining the Section 20B Request” and that “the issues concerning resolution of the matter are more extensive than those identified in the official letter of 11 December 200[3]”.
However, following receipt of a letter from the Registrar noting that the evidence from GBC which had already been filed (the Burke declaration) appeared to establish that prior publication of the 1031/03 design application had occurred and that as a consequence the onus now appeared to be on AA to establish entitlement to the 1054/03 design, GBC notified the Registrar on 26 February 2004 stating that it had reconsidered its position. In light of what the Registrar had said it no longer believed its case would be advanced any further by filing the further evidence, that it would await further developments and “if [AA] raises new evidence in support of their Section 20B request, then obviously we would like to be provided with the opportunity to file evidence in response to same.”
On 1 March 2004 both parties were notified by the Registrar that they had 2 months to file evidence in response to the evidence which the other party had now filed.
On 13 May 2004 AA requested an extension of time to 30 June 2004 to file its evidence in response (although they referred to it as “further evidence”). It appears that AA had now realised that GBC had at its disposal other evidence (the Tony Sharp declaration) which it was holding in reserve, and AA was seeking to have that evidence filed before filing its own evidence in response. GBC, on the other hand, did not appear at this stage to intend to avail itself of the opportunity afforded to it by the Registrar on 1 March 2004 to file evidence in response.
On 30 June 2004 AA filed its evidence in response plus its written submissions in respect of the hearing, and the matter was set for hearing on 26 August 2004. This evidence comprises statutory declarations by Gerhard Trichardt (a director of AA who seems to have had overall responsibility for the dealings with GBC, at least up to late 2002), Franco Tenaglia (who appears to have taken over responsibility for the dealings with GBC in late 2002) and Jason DeSilva. On 21 July 2004, however, GBC advised the Registrar that on having seen AA’s evidence in response it wished to exercise its “reserved” right, referred to in its correspondence of 26 February 2004, to file further evidence. That evidence was to comprise statutory declarations by Tony Sharp, William Burke and Stephen Krouzecky. In the event, all three filed statutory declarations, Mr Sharp filing two statutory declarations. Mr Sharp was also issued a summons by the Registrar upon the request of AA to appear at the hearing to be cross-examined.
AA also filed some further evidence, in the form of a statutory declaration by Lee Teck Wah, a company director of a Malaysian subsidiary of Armourglass Limited (Armourglass Limited, I gather, also being the parent company of AA).
Ultimately, none of this further evidence was the subject of an objection by the other side, but in any case I would be disposed to grant special leave to allow such evidence to be adduced under regulation 37(1)(b), on the basis of its relevance to the present matter.
The filing of further evidence resulted in the postponement of the hearing until 11 November 2004.
THE HEARING
At the outset of the hearing two procedural issues arose in relation to cross-examination. The first of these concerned the indication by Mr Lucev that he wished to conduct examination (that is, examination in chief) of three witnesses who had attended the hearing for that purpose. Mr McCormack objected strenuously to this being allowed to take place, as he had been given no warning that this was to happen and was not prepared for, and had no interest in, cross-examining the witnesses. I, also, was taken by surprise by what Mr Lucev was proposing to do (there was no real indication on the files of the applications of this eventuality). I stated to Mr Lucev that it seemed that what he was wanting to do was to introduce further evidence, and I would have to treat it as such. That would involve it being provided in declaratory form, with AA being given the opportunity to object to its admission as further evidence and, if that was not upheld, to file evidence in response. Mr Lucev then gave a brief outline of what the evidence involved, indicating it was not substantial. However, Mr McCormack still objected to the examination proceeding, so I directed it could not go ahead. At the end of the hearing Mr Lucev indicated he would not be pursuing this further evidence.
The other procedural issue which arose at the commencement of the hearing concerned the cross-examination of Mr Burke, who had not been summonsed but was at the hearing. When Mr Lucev indicated that he wished to do this, Mr McCormack once again objected strenuously to this being allowed to happen as there had been no forewarning (and therefore no opportunity to prepare Mr Burke to give evidence) and Mr Burke was only at the hearing as an observer. Upon consideration of this issue, I concluded that I did not have any power to direct Mr Burke to submit to cross-examination, and would not do so. However, I stated that, even accepting Mr McCormack’s point that there had been no opportunity to prepare Mr Burke to give evidence (which I would take into account in assessing that evidence), I could see no legal or practical impediment to Mr Burke giving evidence, and I would take into account his refusal to do so, where it was appropriate to do so, in my findings in relation to this matter. Upon conveying this to the hearing, Mr McCormack reconsidered his position and agreed to Mr Burke being cross-examined.
A further procedural issue which came up in the course of the hearing concerned the status of the evidence of Kim Ashe. This issue arose as a result of AA (according to AA) being requested by the Designs Office to resubmit the evidence upon which it wished to rely “once the nature of the case had changed” upon the filing of the first Burke declaration. (I say “according to AA” because there is no indication of this on the file.) In doing so, the evidence of Kim Ashe was omitted (apparently intentionally). When Mr McCormack, in the course of his submissions, wished to raise evidentiary issues in relation to the evidence of Mr Ashe, Mr Lucev objected on the basis that it was no longer part of GBC’s case. Mr McCormack then brought to my attention the decision in Jones v Dunkel (1958) 101 CLR 298, which established that where there was a witness who may be able to shed light on matters before the tribunal, if that witness was not called to give evidence without an explanation being given, then the hearing officer is entitled to draw an adverse inference against the party which did not call the witness. In response to this submission, Mr Lucev stated that AA does not resile from anything that Ashe said, and in order to avoid the Jones v Dunkel inference then I should have regard to the Ashe evidence.
THE LAW
This request was made under section 20B of the Designs Act 1906, which reads:
20B. (1) Where, before a design is registered on an application for registration, a person would, if the design were then registered, be entitled under an assignment or agreement, or by operation of law, to:
(a) the registered design or an interest in it; or
(b) an undivided share in the registered design or in such an interest;
the Registrar may, on a request made by the person in accordance with the regulations, direct that the application proceed in the name of the person, or in the name of the person and the applicant or the other joint applicant or applicants, as the case requires.
(2) Where the Registrar gives a direction:
(a) the person is to be taken to be the applicant or a joint applicant, as the case requires; and
(b) the application for registration is to be taken to have been amended so that the person becomes the applicant, or a joint applicant, as the case requires.
On 17 June 2004, the Designs Act 1906 was repealed by section 150 of the Designs Act 2003. Under section 153(1) of the Designs Act 2003, the 1906 Act continues to apply to an application made under the old Act before the commencement day as if the old Act had not been repealed, unless a conversion request is made under section 159 (which is not the case here).
Essentially, this action requires a determination of where entitlement to the design in accordance with section 19 of the Designs Act 1906 lies. Section 19 reads:
19. (1) Subject to this section, the author of a design is the owner of the design.
(2) Where, in accordance with an agreement for valuable consideration entered into by a person with another person, the other person or an employee of the other person acting in the course of his employment makes a design for the first-mentioned person, the first-mentioned person is the owner of the design.
(3) Subject to subsection (2), where a design is made by a person in the course of his employment with an employer, the employer is the owner of the design.
(4) The owner of a design or the assignee of any interest in a design may, by instrument in writing signed by him or on his behalf, assign to another person the whole or any part of his interest in the design.
(5) In this section, "design" does not include a registered design.
DECISION
Onus of Proof
In deciding a matter such as this a tribunal – in this case the Registrar of Designs – is entitled to act on any material which is "logically probative" of the issues under consideration. In reaching a conclusion on any issue, the standard of proof required is the civil standard of proof on the balance of probabilities (see, for example, Dunlop Holdings Ltd's Application, (1979) RPC 523). Furthermore it is clear from the authorities (see, for example, Stamp v W J Powell Pty Ltd, (1918) 24 CLR 339) that it is incumbent upon the requestor to prove its case.
Mr Lucev submitted that there were three issues for determination in this case:
1. Was there a joint venture agreement (JVA) between AA and GBC giving joint ownership of the design
2. Independent of the JVA, was AA (through any of its officers or employees) a co-author of the design
3. Was there an agreement for valuable consideration for the making of the design under section 19(2) of the Designs Act 1906 such that GBC was the owner of the design (and this point includes whether Tony Sharp had authority to enter into the agreement on behalf of AA).
I think that this is basically correct, provided the first issue is understood as going to the terms of the JVA. The existence of a JVA would not of its own deliver entitlement under the provisions of section 19 of the Designs Act 1906.
Mr Lucev accepted that the onus of proof in respect of the first two of these issues lay with the requestor, AA. In respect of the third issue, however, he submitted:
“The onus of establishing that there was an agreement for valuable consideration for the making of the design under section 19(2) of the Act is on GBC, as it is an exception to section 19(1) of the Act and a matter that they assert (essentially as a defence to the application) and is therefore for them to prove. That onus includes proving that Sharp had authority to enter into the alleged agreement on behalf of Armourglass.”
In support of his contention as regards this evidentiary onus he cited Purkess v Crittenden (1965) 114 CLR 164, which was likewise cited by Mr McCormack in the same context. This case deals with the distinction between the burden of proof in the sense of establishing a case and the burden of proof in the sense of introducing evidence. In my view, Mr Lucev would appear to have correctly applied the principal of law pertaining to the evidentiary onus which is stated in Purkess v Crittenden to the circumstances of the present matter, and I do not understand GBC to take a different view, except insofar as an original reference to “evidentiary onus” as applying to the first and second of the above-referred to issues for determination by Mr Lucev was corrected by Mr McCormack to “onus of proof”, which Mr Lucev accepted.
In the present matter I must consider the evidence and decide the issues mindful of these general parameters.
Design application 1031/03
The present applicant of application 1031/03 (GBC) concedes that design 1031/03 is not new and original by virtue of a number of instances of prior use of the design having occurred, and that appears to be supported by the evidence. However, there are circumstances to this case (namely, the fact that another party AA is pursuing entitlement to that application) which could mean that that concession is a strategic retreat rather than a true indication of the actual situation. The present applicant has also conceded that the requestor (AA) does have joint entitlement in application 1031/03, which also appears to be clearly so from the evidence. A similar situation to this arose in Mining Supplies Australia Pty Ltd v Mining Equipment (Minquip) Pty Ltd [1999] APO 55, a patents case. In that case it was decided that the requestor had no entitlement to the patent application as there was nothing for it to be entitled to – its contribution had been prior-published by prior use. However, as the requestor has not made any concession on prior use, and, unlike the Mining Supplies v Minquip case, has not been able to put forward a case on that as it is not even aware of the detail of the design which is the subject of design application 1031/03, I think it would be inappropriate at this point not to accede to its request to be made co-applicant of 1031/03, and I find accordingly.
The present applicant (GBC) of application 1031/03 has also requested that the application be withdrawn. As there are now joint applicants of the application, in order to go forward the withdrawal will require the assent of the other applicant (AA).
Design application 1054/03
A logical and convenient approach to determining the entitlement to application 1054/03 is, as a first step, to decide who was (were) the author(s) of the design. If it is determined that Mr Burke is the sole author, then it will be necessary to determine if AA obtains entitlement through operation of sub-sections 19(2) or 19(4). If it is determined that the design was authored jointly by Mr Burke and another person or persons employed by AA, then it will need to be determined if AA has joint entitlement to the design by operation of subsection 19(3), or if they would have had entitlement but for the fact that the design had been made in accordance with an agreement for valuable consideration entered into by AA (subsection 19(2)).
A determination of the authorship of the design which is the subject of design application 1054/03 necessitates tracing back the history leading to the design. The design has its origins in an attempt by AA to be the successful tenderer for projects relating to a detention centre and two correctional centres in Queensland. The projects called for strengthened glass blocks. This led Mr Sharp, who was sales manager of AA, to GBC, who were manufacturers of glass blocks. However GBC did not have any standard products which were suitable. It appears that AA then dabbled with taking an available single glass block (commonly referred to in the evidence as a “standard glass block”) and adhering a toughened glass front face to the glass block (that is, to the major, or, in situ, exposed, face of the glass block). I understand this is essentially the subject matter of design application 1031/03. However, the project architects decided that they needed a double glass block with a toughened glass front face, which AA and GBC were subsequently able to come up with and be awarded the tender. A registered design was taken out on this block (Australian Registered Design 143404), registered to both AA and GBC. The authors were given as Mr Burke and Mr Trichardt. The filing of the design application which led to this registered design and the sharing of costs in relation to that was part of a verbal agreement (styled a “Joint Venture Agreement”(JVA)) reached between Trichardt on behalf of AA and Burke on behalf of GBC in mid 2000. Subsequently, however, Mr Burke perceived Mr Trichardt as having misgivings about the value of taking out more designs protection in the future, and there is even an allegation in the evidence from Mr Burke that in the case of Registered Design 143404 AA did not meet its full share of costs. In particular, while Mr Burke at this time wanted to register the design of the single glass block with a toughened glass front face, according to Mr Burke Mr Trichardt was not interested in doing so.
The other elements to the JVA between AA and GBC appear to have been that AA would tender for projects in Australia and GBC or its associated companies would tender for overseas projects which required strengthened glass blocks. AA would manufacture the strengthened glass blocks using GBC exclusively as its supplier of the basic glass block from which the strengthened glass block was made. Each would charge the other “market prices” for its contribution to the final product. This agreement was never formalised, although in August 2000 Mr Burke did discuss with his solicitor the drawing up of a formal agreement.
In April 2000, Mr Burke had become aware of a construction project in Singapore known as the Changi Prison Project (CPP), and in July 2000 Mr Burke requested from Mr Sharp that strength tests be carried out on the single block and double block strengthened glass blocks and that costings be provided. In August 2000 it was agreed that a company associated with GBC, Glass Brick Technologies International (GBTI), would seek a subcontract for supplying and installing strengthened glass blocks for the CPP, with AA being engaged to help GBTI make (as in “develop”) glass blocks to a standard and price to help GBTI win the sub-contract. In this case, however, it appears that, in the event of the sub-contract being awarded, AA’s value-adding to the strengthened glass blocks was to be at a “pre-arranged” price.
The first blocks submitted to the Changi Prison Authority were considered by the Authority to be inadequate (in the case of the single block) or too expensive (in the case of the double block). The evidence from both Mr Sharp and Mr Burke is that Mr Burke raised with Mr Sharp the possibility of strengthening the single block strengthened glass block. According to Mr Burke’s declaratory evidence, it was Mr Sharp’s suggestion to laminate the glass block with a polycarbonate layer. However, their declaratory evidence then diverges somewhat, in that Mr Burke’s recollection is that Mr Sharp suggested use of a polycarbonate layer as an outer layer, whereas it was Mr Sharp’s evidence that he suggested the use of polycarbonate as an interlayer, that is, sandwiched between the glass block and another layer.
I should interpose here to note that we are now at a point where the evolution of the single standard block-type toughened glass block has almost reached the stage where it is the form of block which is represented by the design which is the subject of design application 1054/03. In particular, the standard glass blocks and the laminated layer (which in the actual block is the toughened layer) and their juxtaposition illustrated in Registered Design 143404 (supra) appears identical to those of the design of the glass block shown in design application 1054/03 (disregarding the fact that the former comprises two standard glass blocks and the latter just one), except that in 1054/03 an additional layer (which in the actual block is a polycarbonate layer) is inserted between the basic glass block and the laminated layer.
While it seems that Mr Burke was aware of the use of polycarbonate laminations on glass dating back to something he saw at a Trade Fair in Dubai in September/October 1996, he seems to be in the hands of Mr Sharp in terms of the technical know-how to actually achieve this. In his second declaration Mr Burke states:
“Sharp advised me that it was common to use polycarbonate as an interlayer in the glazing industry, with an outer glass laminate and that it would be easy to produce a sandwich arrangement with the toughened face and the polycarbonate as an interlayer between the glass block and the toughened face.”
The evidence from Mr Sharp is not greatly inconsistent with that of Mr Burke on this point
“As Burke told me that GBTI still wanted to try and win the tender, he and I discussed how the SB/SF block could be improved. I advised Burke that in the glazing industry, it was common to laminate glass and Armourglass had developed a process to apply an interlayer of polycarbonate to glass to help make the block physically stronger to resist attack, but nothing like that had been done before with glass blocks”
but he clearly lays claim to having thought of the interlayer aspect first, although on several occasions in his declaratory evidence and cross-examination evidence he does make comments of a general nature apparently attributing the creation of the design to Mr Burke.
Mr Sharp goes on to say:
“Burke subsequently advised me of the design specifications he required for the [polycarbonate laminate block] and I agreed on behalf of Armourglass to accept a commission from GBC, on the basis of the previous arrangement to make such a new style of block for GBC……..”
While this appears to give Mr Burke all the credit for coming up with the final shape and configuration of the glass block insofar as the design is concerned, all that this would appear to have involved would be arriving at the thickness of the polycarbonate layer in absolute terms, and possibly the thickness of the toughened glass layer. In arriving at those values it would be very surprising indeed had Mr Burke not lent heavily upon the technical expertise of Mr Sharp. In any case, it emerged in the cross-examination evidence of both Mr Sharp and Mr Burke that there were no design specifications right up until the last of the prototypes (which, according to Mr Sharp, numbered about 50), so it is difficult to see Mr Burke as having provided Mr Sharp with anything in the nature of detailed specifications.
But putting aside the question of authorship for the moment and continuing on with the narrative history of design 1054/03, as is apparent from the previous quote from Mr Sharp, GBC and AA agreed to produce the polycarbonate glass block on much the same basis as they had previously agreed to do business, the principal variation appearing to be that AA would now bill GBTI for its costs.
Six prototype blocks were then made, and AA and GBC each successfully tested one of these. The remaining four were sent to Singapore to be tested by the Changi Prison Authority. That testing was successful, but things started to go awry when the main contractor for the CPP baulked at using the GBTI blocks and advises the architect that they will use their own blocks. This apparently spurred GBTI to file the previously mentioned design application in Singapore which is the basic application of Australian design application 1054/03. This application was in the name of GBTI alone. The documentation on file does not indicate the author of that design.
The Changi Prison Authority invited GBTI to attend a demonstration on 3 December 2002 involving a comparison testing of the AA/GBC block and the main contractor’s block before officials and authorities in order for the CPP to decide which to use. Two sample polycarbonate blocks were produced by AA and given to Mr Burke to take to Singapore for the demonstration. However both blocks turned out to have manufacturing faults and failed the tests, much to the anger of Mr Burke. Mr Burke sought restitution from AA for his expenses in attending the test, and this was paid.
Another 24 polycarbonate blocks were produced by AA and were successfully tested in February 2003 by the Changi Prison Authority, but the Authority advised Mr Burke that the contract had been let to another sub-contractor.
Shortly thereafter an opportunity arose to supply polycarbonate glass blocks in connection with construction work being carried out on a Singapore bank. GBTI ordered 210 polycarbonate glass blocks from AA, for which AA were paid. Once again the blocks were defective, but were used anyway, and the bank refused to pay GBTI for the work.
Meanwhile, the 6 month Convention period for filing a Convention application in Australia based on the design application in Singapore was fast approaching. Ostensibly because of the negative attitude of AA to the securing of intellectual property rights, GBC unsuccessfully attempted to get a deed of assignment executed between AA and GBC. This required AA to transfer ownership of overseas rights to the polycarbonate glass block and Registered Design 143404 to GBC. It is stated in Mr Burke’s second declaration that this would be in return for GBC recognising AA as joint owner of the polycarbonate glass block. Mr Burke’s evidence was that GBC’s offer was conditional upon AA being prepared to pay 50% of the costs of registering the polycarbonate glass block in Australia, but this does not appear to be reflected in the draft deed of assignment. The design was subsequently applied for in the name of GBC alone.
Turning now to the question of who authored the design, there are few legal precedents in this area. In fact, so far as Australian decisions subsequent to the amendments to the Designs Amendment Act 1981 are concerned, there appears to be but one: Chris Ford Enterprises Pty Ltd v B H & J R Badenhop Pty Ltd (1985) 4 IPR 485. Both parties referred to this decision, and each quoted a portion of the following passage from the decision:
“As to the nature of authorship of a design for the purpose of s.19 of the Act it would appear from definition of design in s.4(1) of the Act and the terms of s.19, that except in the case of an employee or of a design made by a person for valuable consideration, authorship is in the person whose mind, conceives the relevant shape configuration pattern or ornamentation applicable to the article in question and reduces it to visible form. See Ricketson, The Law of Intellectual Property First Edition p.480.
Thus, the question arises, perhaps in the short form, whose idea was it that the features, shape and configuration of the article being the twelve tube round mat as produced by MWS for CFE should be what they were. Of course that shape and configuration was the result rather of functional or practical production considerations rather than considerations of what might appeal to the eye. But this is, no doubt, not important for this case. The incentive to produce a design to supersede that of the twelve tube, flat, mat was the difficulty encountered by MWS in manufacturing the mat satisfactorily. It is clear that Snowden contributed to the ultimate design adopted. Even accepting that Ford produced the first drawing showing the rounded, rather than flat sided tube it is apparent that that would only be the design of the upper portion of the mat. And it is clear that Snowden "refined" that upper portion and changed the lower portion from what it had been in the twelve tube flat design. Accordingly, Snowden would seem to be at least a co-author of the ultimate shape and configuration of the article. But if it was Ford who conceived the idea of the rounded tube mat and communicated it to Snowden and not the other way round then Ford was also a joint author of the ultimate shape and configuration, the design, applicable to the article.”
Mr McCormack also quoted Butterworths Copyright and Designs, which states:
“Decisions under comparable United Kingdom law suggest a need, when determining authorship, to take into account acts relating to “conceiving” of the design and acts relating to reducing it to some form in the sense of finally drawing it up or making a model, for example. These decisions are principally concerned with resolving competing claims to authorship, typically involving situations where if a first person arrives at a concept for a design, possibly reducing it to some rough material form, and then obtains the services of another to draw up the design in its final form or to make a model of it. If one person gives such instructions that only minor details are left to the choice of a second person who actual draws up or makes the design, then the first person will be the author. If, however, the instructions are vague, leaving practically all to the second person, the latter will be the author.”
This passage does not, however, address the possibility of joint authorship.
Mr Sharp’s technical background would seem to more favourably place him to be the person who conceived the polycarbonate interlayer, and his technical astuteness was, I think, reinforced by his confident and apparently knowledgeable responses to questions put to him in cross-examination by Mr Lucev. It would be surprising given the relative level of expertise of Mr Sharp (with AA’s resources behind him) and Mr Burke that Mr Sharp did not have very significant input into the final form of the design. As already mentioned, it emerged in the cross-examination of Mr Sharp that there were something like 50 different versions of the polycarbonate block that were tested before the final design was arrived at. It also came out in cross-examination of Mr Burke and Mr Sharp that there were never any written specifications for the block set down, at least until the production version was arrived at – the development of the design was progressed with actual prototypes rather than by means of drawings or models. Mr Burke stated in cross-examination:
“There weren’t any itemized specifications as to the size of the block and its many components, and that was developed through the manufacturing process”.
Moreover, this was a case where, as in Chris Ford Enterprises Pty Ltd v B H & J R Badenhop Pty Ltd that the shape and configuration of the final design was the result of functional or practical production considerations rather than considerations of what might appeal to the eye. All this is also suggestive of a heightened role for Mr Sharp. It is also relevant that there was conflict between the testimony of Mr Sharp and Mr Burke as to the thickness of the polycarbonate layer: the former stating 4mm and the latter 3mm. While there is no evidence establishing definitely which of these is correct, given Mr Sharp’s hands-on role in the production of these blocks it is more likely that he is better placed to be in possession of this information. That in turn would suggest that Mr Burke is wrong on this, and that raises questions of how closely involved he was with designing the polycarbonate block. Mr Burke’s evidence under re-examination in particular indicated that he did have a significant role in practical aspects of the final form of the block, such as in means (said to be “silicon” by Mr Burke, but he may have meant silicone) at the edges of the glass block to compensate for the different expansion rates of polycarbonate and glass, but these do not appear to be represented in the design which is the subject of design application 1054/03.
As to who actually conceived the idea of using polycarbonate as an interlayer, as I have already stated there is conflict between the declaratory evidence of Mr Sharp and Mr Burke on this point. Mr Burke concedes that Mr Sharp was the first to suggest the use of a polycarbonate layer, but as an outer layer. Under cross-examination Mr Burke was not asked directly whether the concept of the use of polycarbonate as an interlayer had come from him, although questions were put to him about that would have allowed him to make that claim. The closest he came was to say “yes” to a question from Mr Lucev as to whether he taken a “major” role in designing the polycarbonate block. Under re-examination Mr Burke was asked by Mr McCormack to explain his position on his contribution with regard to the design of the polycarbonate block. Mr Burke responded:
“Changi didn’t work……I had a meeting with Tony Sharp and we explored all the different options for increasing the security of the glass block, and the conclusion of that was that we put on a polycarbonate face. On the conclusion of that we designed the glass brick face that would fit with that and the PC sizing and Armourglass put it together…….
How the glass blocks were manufactured, I didn’t have anything to do with. The size of the polycarbonate I had a lot to do with.”
This appears to accept that Mr Sharp had a role in designing the block, albeit, perhaps, a minor one.
In his cross-examination evidence, Mr Sharp was initially not prepared to allow any more than that he and Mr Burke had discussed the issues of coming up with a design and using a polycarbonate layer, despite numerous attempts by Mr Lucev to draw him on this, beyond conceding that “viability and testing” had been done at AA. Then Mr Lucev asked Mr Sharp whether
“The suggestion for the polycarbonate interlayer came from you as a consequence of what you knew of Armourglass’s processes?”
to which Mr Sharp answered “Sure”.
Under re-examination, Mr Sharp initially used similar phraseology that he had initially employed under cross-examination – that he and Mr Burke “had had many discussions” on the use of a polycarbonate interlayer. He eventually offered the following:
“It came to us what we do with Armour attack glass is to use a polycarbonate interlayer then [Mr Burke] went out and he was looking at some polycarbonate blocks. Went back to Armourglass and sat down with Gerhard Trichardt to figure the way we could use it.”
In response to further questioning from Mr McCormack, Mr Sharp stated in relation to the use of the polycarbonate layer:
“Bill made the statement ‘could you do it that way’”
Upon being pressed further, Mr Sharp said:
“[Mr Burke] came up with the idea of, could we, put the polycarbonate in the block itself, and that is where it started from.”
Mr Sharp is clearly the more impartial witness: indeed, given the fact that he had apparently taken out a wrongful dismissal action against AA when his employment with AA was terminated in March 2004, he might, if anything, be expected to incline towards GBC. Although he appeared quite defensive at times when giving evidence at the hearing, he nevertheless came across as endeavouring to be truthful and having a sound recollection of the events upon which he was giving evidence. I nevertheless gained the distinct impression that his eventual concession that putting the polycarbonate layer in the block had been Mr Burke’s idea was made somewhat begrudgingly. Mr Burke also appeared as someone endeavouring to give an honest account of the facts, although his evidence was at times hesitant and gave the impression that he was intent on avoiding presenting the evidence in a manner that was prejudicial to his case. This may to some degree have been attributable to the unanticipated manner of his appearance as cross-examination witness. And in all of this sight should not be lost of the factor that Mr Sharp’s technical expertise would seem to better position him to appreciate the advantages which would accrue from using the polycarbonate as an interlayer.
In my view the evidence as a whole suggests a sufficient contribution on the part of Mr Sharp to the final form of the design to be considered a joint author of the design, even without him having conceived the use of a polycarbonate as an interlayer. This would appear to be most borne out by this passage from Mr Burke’s first statutory declaration:
“I then discussed the design of a superior strength block with the principal salesman for Armourglass that I dealt with at the time, Tony Sharp (“Sharp”), on the basis that Armourglass would make the design for the applicant in consideration of GBTI tendering further for the Chiangi Prison Project, whereby GBTI would source the manufacture and supply of these blocks exclusively from Armourglass if GBTI were successful in being awarded the contract for the tender. Sharp advised that Armourglass could come up with a design on that basis, and between us we authored the concept of a design of a single block with a single hardened face and with an intermediate polycarbonate layer.”
Taking all these considerations into account, the balance of probabilities appear to lean towards Mr Sharp as having conceived the idea of using polycarbonate as an interlayer and to have played a significant role in determining its ultimate configuration. I therefore find that Mr Sharp is a joint author of design application 1054/03.
There is some evidence of Mr Trichardt and Mr Tenaglia also having a hand in the development of design application 1054/03. The evidence for this is fairly scant, and I do not consider the evidence is sufficient to establish Mr Trichardt or Mr Tenaglia as co-authors of the design. In any event, I note that they are effectively in the same position with respect to AA as is Mr Sharp (an employee of AA) in terms of AA’s entitlement to any registerable designs authored by them in the course of carrying out their duties as directors of AA, and so, having found Mr Sharp to be co-author of the design of design application 1054/03, it is immaterial to the outcome whether or not Mr Trichardt and Mr Tenaglia are also entitled to the standing of co-authors.
Having determined that Mr Sharp and Mr Burke are the co-authors of design application 1054/03, I now turn to sub-sections 19(2), 19(3) and 19(4) to see where entitlement to the invention lies by virtue of the operation of those sub-sections.
GBC have entitlement to the design by virtue of Mr Burke’s joint authorship of the design. The fact of GBC’s entitlement through Mr Burke’s authorship is not at issue in this matter, and so I do not need to consider precisely how that arises.
AA was, during the period in which the design of design application 1054/03 was created, the employer of Mr Sharp. Setting aside the possible intrusion of sub-section 19(2), AA therefore has joint entitlement to the design through the operation of sub-section 19(3). I do not understand there to have been any suggestion from any of the participants in this matter that, once Mr Sharp’s authorship was established, this would not be the case.
However, sub-section 19(2) could operate to upset this. If AA have entered into an agreement for valuable consideration to make the design for GBC, then GBC will have entitlement to AA’s share of the design as well as its own.
GBC’s case that AA agreed to make (that is, create) a design for GBC for valuable consideration is founded upon the agreement reached between AA and GBC that GBC/GBTI would use AA to supply the finished polycarbonate bricks. That there would be any supply of finished bricks sourced from AA was dependent on GBTI winning the CPP tender. The CPP tender was unsuccessful, which resulted in no return to AA by that mechanism. However, GBC attempted to fall back on the fact that the Singapore Bank Project did result in polycarbonate bricks being sourced from AA and being paid for, even though GBC/GBTI did not themselves get paid by the bank.
The situation was, I believe, correctly expressed, by Mr Lucev in his written submissions, as follows:
“The agreement alleged by GBC was at all times conditional on one thing: GBC being successful in the tender for the Changi Project. It is common ground that GBC were not successful, and Burke confirmed both the conditional nature of the agreement and the unsuccessful tender in cross-examination. This was confirmed by Sharp: there was only ever one agreement from “go to whoa”, not a separate agreement with respect to the Design. The failure to fulfil the condition precedent means that there is no binding contract to perform: Meehan v Jones (1982) 149CLR 571.”
Mr Lucev also drew attention to the acknowledgement by Mr Sharp in his evidence that
“before the parties mutually dealt with the design for Changi, there was already an agreement as to what would happen if GBC was successful in its tender for the Changi Prison Project”
being that GBC would require AA to laminate the glass blocks the subject of the design. Mr Lucev went on to observe that
“past consideration (if there was any which is not clear) is no consideration: Roscorla v Thomas (1842) 114 ER 496.”
Even accepting the permissibility of the sleight of hand involved in relying on the Singapore Bank Project as providing the valuable consideration, the fundamental difficulty I have with GBC’s assertion that it had an agreement with AA for AA to create the design for valuable consideration is that there does not appear to be a direct connection between the creation of the design and the receipt of the valuable consideration. The obtaining of the valuable consideration was conditional upon other requirements being met, namely the grant of successful tenders. In my view there is thus no valuable consideration for making the design as such.
I find that AA did not enter into an agreement with GBC to make the design of design application 1054/03 for valuable consideration, and did not receive any such valuable consideration.
AA also sought to rely on the existence of a JVA as entitling it to be joint applicants for design application 1054/03. However, since AA have been held to be entitled to be joint applicants by the joint authorship of Mr Sharp and his relationship to AA as an employee of AA, the question of whether they have entitlement as a result of a JVA is of no consequence to the outcome of this matter. Nevertheless for the sake of completeness I will briefly consider the validity of that approach.
AA seek to rely on the evidence of Mr Trichardt as to the nature of the agreement entered into on or about 11 July 2000 by him, on behalf of AA, and Mr Burke, on behalf of GBC. Mr Trichardt states the agreement to be:
“1.There was a ‘50/50’ joint venture which gave Armourglass and GBC joint ownership of the design for the Second Glass Block;
2.Each party could tender for jobs using the Second Glass Block;
3.Each party’s tenders would factor into the price the other party’s price for its product (ie Armourglass’ cost of lamination or GBC’s costs of supplying the standard glass block);
4.The other party’s costs for its product would be the then prevailing market price; and
5.The same agreement would apply to any other designs developed together by Armourglass and GBC.”
There was fairly extensive argument at the hearing as to whether this agreement was intended to be an “umbrella” agreement or whether there were intended to be step by step agreements as each design was created. GBC contended the agreement referred to by Mr Trichardt was confined to just the Second Glass Block (which was Registered Design 143404), and that any future designs would be subject to a separate agreement. This was said to be evidenced by the moves by GBC to set up a formal agreement in relation to the polycarbonate glass block, but, on the other hand, the draft assignment which GBC had created would suggest to the contrary.
However, assuming for the sake of argument that the agreement was an umbrella agreement, I fail to see that as delivering to AA what they are seeking. The operation of clauses 1 and 5 requires that all designs “developed together” by AA and GBC be jointly owned by AA and GBC. The question thus arises as to what is encompassed by these words “developed together”, as applied to a design. The word “developed” may simply be being used in the sense of “authored”, as that word is understood in the Designs Act 1906. That may seem a somewhat innocuous requirement to have in an agreement, but then again so is the requirement that each party charge the prevailing market price (clause 4). Of course, the words could also refer to the contributing of materials and non-creative skills to the making of a design, but to my mind so much uncertainty surrounds the intended effect of these words that a meaning should not be imputed to them wider than the narrow one of “authored together”. That is, the JVA would thus only entitle each party to what they are already entitled to by operation of subsections 19(1) and 19(3) of the Designs Act 1906.
CONCLUSION
I have found that Armourglass Australia Pty Ltd has established its right under section 19 of the Designs Act 1906 to be a joint applicant of design applications 1031/03 and 1054/03.
I therefore direct that design applications 1031/03 and 1054/03 proceed in the joint names of Glass Block Constructions (Aust) Pty Ltd and Armourglass Australia Pty Ltd.
COSTS
In proceedings before the Registrar, costs normally follow the event. In this matter the road from the filing of the section 20B request to the hearing has been a somewhat tortuous one, and unnecessarily so. However the responsibility for that seems to me to be about equally shared between the parties. I therefore see no reason to deviate from the usual practice, and award costs in accordance with Schedule 3 of the Designs Regulations 2004 against Glass Block Constructions (Aust) Pty Ltd.
E J Knock
Delegate of the Registrar of Designs
06 January 2005
Patent attorneys for the applicant : Wray & Associates, Perth
Solicitors for the requestor : Murfett & Co., Perth
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