Glueck v Stang

Case [2008] FCA 148

FEDERAL COURT OF AUSTRALIA

Glueck v Stang [2008] FCA 148

TRADE PRACTICES – application for summary dismissal – substantive application based on alleged contravention of s 52 of the Trade Practices Act 1974 (Cth) – alleged contravention consisting of misrepresentations made to Australian Patent Office and United States Patent and Trademark Office, leading to grant of Australian patent and US patents respectively – applicant alleging that it had been misrepresented that third respondent was entitled to the grants of the patents and that applicant had consented to such grants – whether making of alleged misrepresentations was conduct “in trade or commerce” within s 52 –whether attack on title to foreign patent – if so, whether such attack justiciable within the Court.
Held:  (1) Alleged misrepresentations not conduct “in trade or commerce”;  (2) Question whether proceeding amounted to an impugning of title to foreign property discussed.

Trade Practices Act 1974 (Cth) s 52

Barto v GPR Management Services Pty Ltd (1991) 33 FCR 389 cited
The British South Africa Company v The Companhia de Moçambique [1893] AC 602 cited
Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212 cited
Concrete Constructions (NSW) Pty Limited v Nelson (1990) 169 CLR 594 applied
Petrotimor Companhia de Petroleos SARL v Commonwealth of Australia (2003) 128 FCR 507 cited
Post Office Agents Association Ltd v Australian Postal Commission (1988) 84 ALR 563 cited
Potter v The Broken Hill Pty Co Ltd (1906) 3 CLR 479 cited
RGC Mineral Sands Ltd v Wimmera Industrial Minerals Pty Ltd (No 2) [2000] FCA 22 cited
Tritech Technology Pty Ltd v Gordon (2000) 48 IPR 52 cited

Tyburn Productions Limited v Conan Doyle (1990) 19 IPR 455 cited
Village Building Co Ltd v Canberra International Airport Pty Ltd (No 2) (2004) 134 FCR 422 cited
Village Building Co Ltd v Canberra International Airport Pty Ltd (2004) 139 FCR 330 cited

BRUNO ANTHONY GLUECK v MAURICE STANG, STEVEN KRITZLER, NOVAPHARM RESEARCH (AUSTRALIA) PTY LIMITED (ACN 003 086 637),
HYO SANG KWON, CAROL DITTERICK AND AERIS TECHNOLOGIES LTD
(ACN 093 977 336)

NSD 1021 OF 2007

LINDGREN J
27 FEBRUARY 2008
SYDNEY


IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NSD 1021 OF 2007

BETWEEN:

BRUNO ANTHONY GLUECK
Applicant

AND:

MAURICE STANG
First Respondent

STEVEN KRITZLER
Second Respondent

NOVAPHARM RESEARCH (AUSTRALIA) PTY LIMITED (ACN 003 086 637)
Third Respondent

HYO SANG KWON
Fourth Respondent

CAROL DITTERICK
Fifth Respondent

AERIS TECHNOLOGIES LTD
(ACN 093 977 336)
Sixth Respondent

JUDGE:

LINDGREN J

DATE OF ORDER:

27 FEBRUARY 2008

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The applicant’s motion for leave to amend brought by notice of motion filed on 25 October 2007 be dismissed.

2.The statement of claim be struck out.

3.The proceeding be dismissed except in so far as it seeks the relief claimed in para 4 of the application.

4.The following subpoenas issued at the request of the applicant be set aside:

(i)subpoena to The Proper Officer of the Australian Stock Exchange;

(ii)subpoena…

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AGLC
Glueck v Stang [2008] FCA 148
Case
[2008] FCA 148
Decision Date

CaseChat Overview and Summary

The case of Glueck v Stang involved Mr. Glueck, who filed an application against several respondents, including Novapharm and individuals, alleging misrepresentations and breaches of the Trade Practices Act (TP Act). The Federal Court of Australia was tasked with determining the validity of Mr. Glueck's claims, particularly whether the representations made to the Australian Patent Office (APO) and the United States Patent and Trademark Office (USPTO) were made "in trade or commerce" as required by Section 52 of the TP Act. The respondents argued that the representations were not made in trade or commerce and, as such, any claims based on these representations should fail.

The court examined the respondents' arguments and considered whether the representations to government authorities were outside the scope of conduct in trade or commerce. It referred to previous High Court decisions, such as Concrete Constructions (NSW) Pty Ltd v Nelson, which clarified the interpretation of "in trade or commerce" and emphasised the need for a trading or commercial character in the relationship between the parties. The court also considered lower court decisions like Village Building Co Ltd v Canberra International Airport Pty Ltd and RGC Mineral Sands Ltd v Wimmera Industrial Minerals Pty Ltd to support the respondents' position.

In its decision, the court dismissed Mr. Glueck's motion for leave to amend his application and struck out the statement of claim. The proceeding was dismissed except for the part seeking revocation of the patent. The subpoenas issued in relation to the proceeding were also set aside. The court allowed Mr. Glueck to file an amended application and statement of claim by a specified date but made it clear that any new claims based on Section 52 of the TP Act would not be permitted. Additionally, the court ordered that Mr. Glueck pay the costs of the first, second, third, and fifth respondents and listed the case for further directions.

The final orders included dismissing the motion for leave to amend, striking out the statement of claim, dismissing the proceeding except for the patent revocation claim, setting aside the subpoenas, granting leave to file an amended application and statement of claim by a specified date, ordering costs, and setting a date for further directions.

Orders

Orders of the court

1. The applicant’s motion for leave to amend brought by notice of motion filed on 25 October 2007 be dismissed.

2. The statement of claim be struck out.

3. The proceeding be dismissed except in so far as it seeks the relief claimed in para 4 of the application.

4. The following subpoenas issued at the request of the applicant be set aside:

(i) subpoena to The Proper Officer of the Australian Stock Exchange;

(ii) subpoena to The Proper Officer, Shelston IP;

(iii) subpoena to the first respondent;

(iv) subpoenas to the second respondent;

(v) subpoena to The Proper Officer of the third respondent; and

(vi) subpoena to The Proper Officer of the sixth respondent.

5. The applicant have leave to file and serve an amended application and an amended statement of claim by Friday 14 March 2008.

6. The applicant pay the costs of the first, second, third and fifth respondents of the three motions heard on 18 February 2008.

The proceeding be listed at 9:30am on Wednesday 19 March 2008 for directions.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

LINDGREN J
I note, in passing, that the existing application is more vulnerable to the respondents’ second ground of attack than the proposed amended application. It seeks, for example, a declaration that Novapharm was not entitled as patentee to the US Patents and an order that Novapharm assign its interest in the US Patents to Mr Glueck.CONCLUSION I explained to Mr Glueck on the hearing that if the respondents’ argument were to find favour, as it now has done, this would not mean that he lacked any remedy. In the first place, it would be possible for him simply to pursue his application in this Court to have the Patent revoked under s 138 of the Patents Act. This remedy, however, may not satisfy him. Such a reduced proceeding would not, for example, touch the US Patents. Moreover, it would not give Mr Glueck damages for Novapharm’s alleged contravention of s 52 of the TP Act, and it would not give him any remedy based on the alleged accessorial liability of the individuals. It may be that Mr Glueck would be entitled to pursue the remaining general law causes of action in this Court, notwithstanding the non-pursuit of those based on alleged contravention of s 52 of the TP Act. Whether he would be entitled to do so would depend upon a consideration of principles of the kind discussed in Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation (1987) 18 FCR 212, Post Office Agents Association Ltd v Australian Postal Commission (1988) 84 ALR 563 and Petrotimor Companhia de Petroleos SARL v Commonwealth of Australia (2003) 128 FCR 507. Whether Mr Glueck’s general law claims can survive in this Court is better determined after he has filed any amended application and amended statement of claim. Mr Glueck would, in any event, be entitled to pursue relief in a State Supreme Court based on general law causes of action, such as fraudulent misrepresentation, against Novapharm and the individual respondents. I note that I advised Mr Glueck to seek legal advice and representation. The proceeding promises to raise complex legal and factual issues, as it has already done. The existing statement of claim should be struck out with leave to re-plead. The position in relation to the existing application is less straightforward. It is not practicable at this stage to distinguish between those parts that should survive and those that should not. In addition, many of the declarations sought are inappropriate. The best course is to let the existing application survive only in so far as it seeks revocation of the Patent. I make it clear, however, that in ordering that the proceeding be otherwise dismissed, I am deciding at this stage no more than that Mr Glueck will not be entitled to seek relief based on a contravention of s 52 of the TP Act in any amended application which he files. The subpoenas were issued by reference to the existing application and statement of claim. In view of my conclusion in relation to those documents, the subpoenas should be set aside.

Ratio Decidendi

Legal Principle Established

Established by: LINDGREN J

Associated with the four groups of misrepresentations are allegations of fraud and forgery, and allegations of accessorial liability, in various combinations, on the part of Mr Stang, Mr Kritzler and Ms Ditterick. CONSIDERATION The respondents rely on two grounds for their attack on the proposed amended statement of claim and, through that document, on the proposed amended application. First, they say that the pleaded representations made to the APO and to the USPTO were not made “in trade or commerce” for the purposes of s 52 of the TP Act. Accordingly, they submit that all claims founded on each alleged contravention by Novapharm of s 52 of the TP Act, including the claims of accessorial liability founded upon those alleged contraventions, cannot succeed. The respondents refer to the authoritative construction of the expression “in trade or commerce” in s 52 of the TP Act given by the High Court in Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 (Concrete Constructions). In support of their submission that representations to government authorities pursuant to the requirements of legislation lie outside the notion of conduct in trade or commerce, the respondents cite Village Building Co Ltd v Canberra International Airport Pty Ltd (No 2) (2004) 134 FCR 422 (Village Building) at [57]-[58], affirmed on appeal at Village Building Co Ltd v Canberra International Airport Pty Ltd (2004) 139 FCR 330 at [50]-[55]; and my own decision in RGC Mineral Sands Ltd v Wimmera Industrial Minerals Pty Ltd (No 2) [2000] FCA 22 (RGC v Wimmera). In Concrete Constructions, the High Court held that an internal communication from one employee to another in their ordinary activities in building work was not conduct engaged in by their employer company in trade or commerce (at 605). The High Court held that what is required is that the relationship between the corporation and the representee be of a trading or commercial character, and that the conduct of the corporation have taken place in the course of that relationship. In their join judgment in Concrete Constructions, Mason CJ, Deane, Dawson and Gaudron JJ said (at 603): … the words ‘in trade or commerce’ refer to ‘the central conception’ of trade or commerce and not to the ‘immense field of activities’ in which corporations may engage in the course of, or for the purposes of, carrying on some overall trading or commercial business. Their Honours also said (at 604):What the section [s 52 of the TP Act] is concerned with is the conduct of a corporation towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character…In some areas, the dividing line between what is or what is not conduct “in trade or commerce” may be less clear and may require the identification of what imports a trading or commercial character to an activity which is not, without more, of that character.