GS Technology Pty Ltd and Commissioner of Patents and Anor

[2003] AATA 353

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 353

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2001/257

GENERAL ADMINISTRATIVE  DIVISION		)
Re		GS TECHNOLOGY PTY LTD

Applicant

And COMMISSIONER OF PATENTS

Respondent

AndGSA INDUSTRIES (AUST) PTY LTD

PartyJoined

DECISION

Tribunal Deputy President Don Muller

Date17 April 2003

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

..............(Signed)...............................

D.W. MULLER

DEPUTY PRESIDENT

CATCHWORDS

PATENT – extension of time to pay continuation fees – error or omission

Patents Act 1990: ss39, 142, 223 Reg.13.3

Kimberley Clark Ltd v Commissioner of Patents and Anor (No 3) (1988-1989) 13 IPR 569

REASONS FOR DECISION

17 April 2003 Deputy President Don Muller       

1. This is an application by GS Technology Pty Ltd (GST) to review a decision of a Deputy Commissioner of Patents, made on 27 February 2001, to refuse an application pursuant to section 223 of the Patents Act 1990 (the Act), for an extension of time to pay a continuation fee on Petty Patent Number 662284.  This decision resulted in the lapsing of the application.

2.      The following matters are not in dispute and the Tribunal finds:

(a)In the late 1980s, George Stack (later to become a Director of GST) and Alan Grieves claimed to have invented a water meter assembly.  In August 1990 they agreed that Mr. Stack would apply for a patent for the assembly which when obtained would be transferred to a company:  subsequently GST.

(b)On 30 August 1990 provisional application No. PK 2036 was filed with the Patent Office with George Stack as the registered applicant.

(c)On 26 March 1991 provisional application No. PK 5286 was filed with the Patent Office with George Stack as the registered applicant.

(d)On 30 August 1991, GST caused application 85236/91 for an invention entitled Water Meter Assemblies to be filed with the Patent Office by a firm of patent and trade mark attorneys, Pizzey and Company (Pizzeys).  That application derived priority from the two provisional applications.

(e)On 25 August 1993 Petty Patent application 44897/93 was filed as a divisional application based on application 85236/91.

(f)On 20 January 1994, Petty Patent Number 645740 was granted to George Stack as patentee.

(g)On 9 December 1994, an application was filed for an extension of the term of Petty Patent Number 645740.

(h)GSA Industries (Aust) Pty Ltd (GSA), the party joined, is a company which the Applicant engaged by way of sub-contract for the manufacture of a part of the water meter assembly, the subject of the application for a patent.

(i)Subsequently, the Applicant commenced proceedings against GSA and another for infringement of its patent.

(j)From December 1994 to August 1995 the legal dispute culminated in court proceedings concerning the validity of Petty Patent Number 645740 and the question as to whether the Brisbane City Council could, in effect, infringe the Petty Patent by relying on the protection by the right of exploitation by the Crown under Chapter 17 of the Act.

(k)On 21 September 1995, Patent application 32815/95 in the name of GST was filed as a divisional application of 85236/91, filed on 30 August 1991.  This became Petty Patent Number 662284, the second Petty Patent.

(l)On 23 October 1995 the transfer to GST of the first Petty Patent, Number 645740 was registered.

(m)On 27 February 1996, a Deputy Commissioner refused to extend the term of Petty Patent Number 645740.

(n)The Federal Court has found Petty Patent Number 645740 to be invalid.

(o)On 10 September 1996, the Federal Court, Keifel J., Ordered that GST be registered as patentee of Petty Patent Number 662284, the second petty patent.

3.      Prior to repeal on 24 November 2000 (and commencement of the amendment on 24 May 2001), section 39 of the Act relevantly provided, in relation to divisional applications:

“(1)     Where a complete patent application is made (but has not lapsed or been refused or withdrawn), the applicant may, in accordance with the regulations, make a further complete application for a standard patent or a petty patent for an invention:

(a)disclosed in the specification filed in respect of the first-mentioned application;  and..”

4.      There is no dispute between the parties that the the provisions of the Act and Regulations resulted in the following:

(a)The actual filing date of the second petty patent, Petty Patent Number 662284, was 21 September 1995.

(b)The effective filing date was the date of the “parent” patent, application Number 85236/91, that is, 30 August 1991.

(c)Annuities were payable to maintain a pending patent application or granted patent in force.

(d)The date from which the annuities were calculated was the effective filing date.  Therefore,  the next renewal date was 30 August 1996.

(e)However, if an annuity for a divisional application nominally fell due less than 12 months since its lodgement, the due date moved to the next anniversary.

(f)Consequently, the first renewal date for application number 32815/95 (Petty Patent Number 662284) was 30 August 1997 and annually thereafter.

5.      The sixth year continuation fees due on 30 August 1997 were not paid on or before that date.

6.      On 10 March 1998, the Applicant was advised by the Patent Office that the sixth year continuation fees due on 30 August 1997 had not been paid by that time or within the six month period of grace provided for under Regulation 13.3, and that, as a result, the application had lapsed on 30 August 1997, under the provisions of s. 142(2)(d) of the Act.

7.      On 12 March 1998, Mr. Abaza, solicitor for the Applicant, lodged $180 with the Patent Office in Brisbane.

8.      On 13 March 1998, Mr. Abaza lodged an additional payment of $745 with the Patent Office in Brisbane.  He also lodged an application for an extension of time on behalf of the Applicant, in which to pay the continuation fees.

9. Section 223 of the Act allowed for extensions of time. The relevant subsections were:

“223 Extensions of time

(1)       ..

(2)       Where, because of:

(a)  an error or omission by the person concerned or by his or her agent or attorney;  or

(b)  circumstances beyond the control of the person concerned;

a relevant act that is required to be done within a certain time is not, or cannot be, done within that time, the Commissioner may on application made by the person concerned in accordance with the regulations, extend the time for doing the act.

(3)The time allowed for doing a relevant act may be extended, whether before or after that time has expired.

(4)Where an application is made for an extension of time for more than 3 months, the Commissioner must advertise the application in the Official Journal.

..

(6)       A person may, as prescribed, oppose the granting of the application.

..

(11)     In this section:

relevant act means an action (other than a prescribed action) in relation to a patent, a patent application, or any proceedings under this Act (other than court proceedings), and includes the making of a Convention application within the time allowed for making such applications.”

10.     The request for an extension of time was advertised for opposition purposes on 30 April 1998.  A notice of opposition by GSA Industries Pty Ltd (GSA) was filed on 21 May 1998.

11.     On 27 February 2001, the application for an extension of time was refused by the Deputy Commissioner of Patents on the ground that the representatives of the Applicant had not identified the “error or omission” nor by whom any “error or omission” had been made, within the meaning of those terms in s.223 of the Act.

12.     George Stack gave evidence to the Tribunal that he put his affairs and the affairs of GST in the hands of Pizzeys until October 1995, when he transferred all affairs to Mr. Andrew Abaza, his solicitor.  He said that he assisted Mr. Abaza from time to time by accessing the data bank records of the Patent Office to ascertain the progress of the standard patent applications..  He said that he did not understand the details contained in the status reports.

13.     The Applicant’s case relies heavily on the fact that Mr. Abaza received a letter dated 4 October 1995, sent to GST, for the attention of Mr. Andrew Abaza, by Ian Tanahill, a registered patent attorney employed at the time by Pizzeys.  The letter contains erroneous advice about the due date for annual renewals.  The case for the Applicant seems to be that Mr. Abaza was misled by the erroneous advice.  The letter contains the following:

“ATTENTION:  Mr Andrew Abaza

Dear Sir,

RE:  New Australian Patent Application

We refer to our recent letter reporting the filing of the application for patent in Australia according to the below-mentioned details and advise that the application has been allocated the filing number of 32815/95.

Please note that this application will lapse five years from the filing date unless a request for examination is lodged before the expiry of this period.  In general the Commissioner will issue a direction to request examination at a date within this period determined by the backlog of the Patent Office.

Annual renewals are payable in respect of Australian Patents and applications, from the third anniversary of the filing date.

We thank you for your instructions to date in respect of the filing of this application.  We will keep you advised of the progress of the application.”

14.     Apart from Mr. Stack, the Tribunal also heard evidence from Andrew Peter Abaza, Kevin Michael Pullen (registered patent and trade marks attorney), Terrence Collins (registered patent attorney) and Daniel Patrick Fox (registered patent and trade marks attorney).  Upon consideration of the evidence of the witnesses and the statements of other persons tendered in evidence, the Tribunal finds that:

(a)It was the intention of Mr. Stack at all relevant times to use the device of divisional applications to keep the subject matter of the 1991 application alive.

(b)There have been problems with prosecuting the application to grant a patent because of the ongoing disputes relating to allegations of contrary inventorship.

(c)Mr. Stack transferred his patent matters from Pizzeys to Mr. Abaza in late 1995 because Mr. Abaza had been heavily involved in the ongoing litigation and it seemed to Mr. Stack that it would save time and expense if all documents and dealings went straight to Mr. Abaza.

(d)When Mr. Abaza received the letter from Pizzeys dated 4 October 1995, he thinks that he probably stuck a copy of the letter on the wall behind his desk.  The original letter has apparently been lost but there is in existence a photocopy of it which bears marks which indicate that the original letter probably at same stage had sticky tape on the top edge.  Mr. Abaza did not make a note of the incorrect date suggested by the letter, nor did he place it into any ”bring up” or “reminder” system.  He believes that he probably thought that by 1998 a standard patent would have been granted as a result of the litigation.  In any event he thought no more about the continuation date until he received the letter from the Patent Office in March 1998 to tell him that the application had lapsed. 

(e)The status reports gathered from time to time by Mr. Stack indicated the due date for continuation payment.

(f)Mr. Abaza never read the status reports right through.  He concentrated on other matters contained in the reports which he believed at the time were more significant.  He never read the due date on any of the status reports.

(g)Any competent patent attorney would have known that the information about due dates contained in the Pizzey letter of 4 October 1995, was erroneous.

(h)Any competent patent attorney would have in place a system whereby relevant diary reminders would be automatically generated.

15.     It is not the case that the Pizzey letter induced Mr. Abaza to place an incorrect date in a reminder system. Indeed no date was ever placed in any system.  The Pizzey letter had become irrelevant by the time the due date came around.

16.     The Tribunal has come to the conclusion that the failure to pay the continuation fees on 30 August 1997 or, within six months of that date, was due to a combination of incompetence and negligence by Mr. Stack and Mr. Abaza.  It was not because of any error made by Mr. Stack or Mr. Abaza.  It was because of an omission to at least check the due date, then enter the date in a diary or an automatic reminder system and then pay on or before the due date.

17. The circumstances were not beyond the control of the persons concerned but the question remains as to whether the conduct amounted to an error or omission by them, within the meaning of those terms in s.223 of the Act, such that a discretion should be exercised to grant an extension of time.

18.     The Tribunal was referred to the case of Kimberley Clark Ltd v Commissioner of Patents and Another (No 3)(1988-1989) 13 IPR 569 in which it was said that the errors and omissions were eventually errors of judgment. Jenkinson J considered the terms “an error or omission on the part of the person concerned or of his agent or attorney” as it applied to the then subsection 160(2) of the Patents Act 1952.   He also considered whether if the discretion had been enlivened, it should have been granted to the Applicant.  At 579 et seq:

“… the word “error” is not easily assigned a clear meaning restricted by reference to one or several particular categories of flawed mental function.  The attempt is likely to lead to the drawing of fine and often unrealistic distinctions.  And some errors of judgment by agents and attorneys may be as bizarre and as little to be anticipated as lapses of memory and accidental slips.  Although the latter kinds of error may be those which the draftsman had principally in mind, I do not think the phrase “error or omission” should be given by construction, the restricted meaning which the delegate assigned, and accordingly I conclude that this ground of the application has been established.

I do not think that the conclusion I have reached reduces s 160(2)(a) to a mere general power of extension.  By no means every judgment by “the person concerned” or by “his agent or attorney” which can be shown to have been mistaken will answer the description “error or omission” in the ordinary meaning of those words, which in their context carry, in my opinion, a connotation of obviousness in error.

Mr. Handley submitted that the failure to do the act or to take the step postulated in respect of an application for exercise of the power conferred by s 160(2)(a) cannot itself be the “error or omission” by reason whereof the failure occurred.  I accept that.

All that is required is once an error or omission has been established that there be some link between that error or omission and the failure to lodge the notice of opposition within three months.

Other grounds of review are stated in the originating application and were the subject of submission.  They relate to the exercise of the discretionary power which is enlivened when the introductory clause of s 160(2)(a) is satisfied.  It is in the circumstances of this case inappropriate, in my opinion, that I deal with those grounds.  The material placed before the Commissioner’s delegate was in my opinion quite insufficient to permit exercise of the power conferred by s 160(2)(a) in favour of the applicant.  The material does not disclose the identity or occupation or situation of the person by whom the decision whether to lodge notice of opposition was taken.  It may be inferred that Mr Sandercock was not that person.  Nothing is clearly disclosed in the statement of the grounds of the application or in the statutory declarations of the way in which any of the circumstances specified as errors or omissions affected the mind of that person to bring about that decision.

But what may just suffice to enliven the power cannot in this case justify its exercise, in my opinion.  The considerations which were identified by Bowen CJ in Vangedal-Nielsen v Commissioner of Patents (1980) 33 ALR 144 at 150 as relevant to the exercise of the power of extension conferred by s 59(1) will in my opinion be relevant also to the exercise of the power conferred by s 160(2)(a) in relation to the time prescribed by the former sub-section for lodging notice of opposition, although the relative weight of each consideration may well be different in the two different discretionary judgments. In order to make out the “proper case… justifying an extension” to which Bowen CJ referred in that case, an applicant would in my opinion have to go beyond a disclosure of the processes by which an agent’s errors came to be committed, and would have to expose frankly, inter alia, all the conduct, knowledge, beliefs and mental processes of the applicant (or, in the case of corporation aggregate, of the relevant officers and other agents) relevant to an understanding of the way the failure to do the act or take the step occurred, or relevant to an evaluation of the reasonableness of that conduct. Whether or not the error or omission of the agent which enlivened the power occurred without moral fault on his part, the applicant’s claim to the exercise of the power cannot be judged without the means of evaluating the applicant’s moral claim to an indulgence which will, to some extent at least, work a prejudice to the efficient operation of what Bowen CJ in that case called “the system”, even if no prejudice to the applicant for a patent.

Section 160(2)(a) confers a power so conditioned that in my opinion its exercise is not lightly to be granted, and a power to be invoked only upon a prompt, frank, comprehensive and clear disclosure of all the circumstances relevant to the weighing of the discretionary considerations upon which grant or refusal of an extension of time will depend.”

19.     In this case the “error or omission” is the failure to pay the continuation fee.  In which case the discretion would not be enlivened.  However, even if an omission of the type that occurred could be regarded as the type of omission which may enliven the power to grant an extension of time, it is the Tribunal’s view that the conduct of the Applicant’s representatives in failing to put in place a proper diary or reminder system was unreasonable, not without moral fault and not deserving of the granting of the indulgence.

20.     In all the circumstances the Tribunal refuses to grant the extension of time and affirms the Deputy Commissioner’s decision.

I certify that the 20 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President Don Muller

Signed:         .......................................................................................
           C. O’Donovan, Associate

Date/s of Hearing  18, 19 November 2002
Date of Decision  17 April 2003
Counsel for the Applicant          Mr. A. Vasta, QC and Mr. D. Elides              
Solicitor for the Applicant           Fox Lawyers
Counsel for the Respondent     no appearance
Counsel for Party Joined           Mr. P.D. McMurdo, QC
Solicitor for Party Joined           Blake Dawson Waldron