Ivo Kreca v Grid Powr (Australia) Pty Ltd
[2024] APO 32
•31 July 2024
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Ivo Kreca v Grid Powr (Australia) Pty Ltd [2024] APO 32
Patent Application: 2018437560
Title:Process and device for improving of synthesis and/or flue gas velocity field for refuse derived fuel applications
Patent Applicant: Grid Powr (Australia) Pty Ltd (now deregistered)
Requestor: Ivo Kreca
Delegate: Leslie F. McCaffery
Decision Date: 31 July 2024
Hearing Date: Written submissions filed on 26 June 2024.
Catchwords: PATENTS – section 36 – request by inventor for declaration on entitlement – applicant voluntarily deregistered – application vested with ASIC – deregistration alleged to have been wrongly done – assignment from inventor to applicant properly made – deregistration does not result in the assignment having no effect – no fiduciary or contractual relationships that would give rise to the requestor having entitlement – ASIC has sole entitlement – request refused – no award of costs required.
Representation: The application is vested with the Australian Securities & Investments Commission (ASIC). ASIC did not appear or make any submissions.
Patent attorney for the requestor: Jim Piper of Pipers Intellectual Property.
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2018437560
Title:Process and device for improving of synthesis and/or flue gas velocity field for refuse derived fuel applications
Patent Applicant: Grid Powr (Australia) Pty Ltd (now deregistered)
Date of Decision: 31 July 2024
DECISION
The requestor has not established that they have entitlement to the application. Based on the evidence before me, the entitlement vests with ASIC.
The request pursuant to section 36 for the Commissioner to make a declaration that the requestor has sole entitlement and that the application proceed in their name is refused.
REASONS FOR DECISION
Australian application 2018437560 was filed under the provisions of the PCT on 23 August 2018 by Ivo Kreca (the requestor). The application entered the national phase in Australia on 27 January 2021.
On 25 June 2021, a request was made under section 113 for the application to proceed in the name of Grid Power (Australia) Pty Ltd (the applicant, also referred to as the Australian company in this decision).[1] The assignment was published in the Official Journal on 8 July 2021. The reason for the change was simply given as “assignment”, and a copy of an assignment document was provided as evidence of the assignment. The document was executed by Mr Kreca, as the proprietor and assignor, and Mr Matthew Champion as the sole director of the applicant and assignee. The assignment identifies the present application as “the patent” and goes on to state that:
“AND the assignor has agreed to assign the patent and any benefits relating thereto to the assignee.
NOW IT IS HEREBY DECLARED:
That in consideration of the foregoing and in consideration of the sum of One Dollar ($1:00) now paid to the assignor, the receipt and sufficiency of which is hereby acknowledged, the assignor hereby assigns to the assignee and the assignee hereby acknowledges any and all rights, title and interest in the patent and in any patent issued thereon (whether issued before or after the date of this assignment), and any benefits relating thereto, including (a) the right to claim priority therefrom, (b) the right to sue for and claim damages or an account of profits for any infringing activities occurring before the date of this assignment and the authority to commence such proceedings in the name of the assignor alone or jointly with the assignee but at the cost of the assignee with all damages, profits, benefits and or award of costs accruing solely to the assignee, and (c) any or all powers benefits, rights and obligations previously vested in the assignor as proprietor of the application or patent the subject of this assignment, TO HOLD UNTO THE ASSIGNEE ABSOLUTELY.
That the assignor will execute at the request and expense of the assignee any and all documents necessary for the recordal of the assignee as the proprietor of the patent”
[1] An earlier request on 20 May 2021 was unsuccessful as the request was not in the approved form.
A direction to request examination issued on 31 May 2023. On 16 June 2023, the applicant filed a request for examination, together with a request for postponement of acceptance, and a notice of entitlement. The notice of entitlement stated that:
That the applicant (or each joint applicant):
- is an actual inventor; or
- derives title to the invention from an actual inventor(s); or
- would, on the grant of the patent, be entitled to have the patent assigned to them.
The applicant (or each joint applicant):
- is an applicant of the application(s) (if any) listed in the patent request, or in an applicable declaration under Article 8 of the PCT; or
- has entitlement from an applicant of the listed application(s), including entitlement to make a request under Section 113 in relation to any original or associated provisional application.
On 11 December 2023, a request was made by the requestor for a correction of an error in the recorded ownership of the application. The request sought to cancel the recordal of the assignment from the requestor to the applicant. A declaration dated 8 December 2023 by Mr Gregg Cook (Cook 1), together with attachments GC-1 to GC-5, and a copy of a letter from Mr Gaetano Astone to the ASIC Property Law Group, were provided in support. This material is dealt with in greater detail below. The reasons for making the request were given by Mr Kreca as:
“I am the inventor and original owner of this invention and the patent application including my PCT application which gave rise to the Australian National Phase application. The Grid Power [sic] Group (of which I am a shareholder) decided that they wanted to hold the Australian patent application in the name of an Australian company. An assignment from myself to the Australian company was prepared and dated 27 January 2021 but for various reasons it was not recorded by IP Australia until 29 June 2021. However an application to de-register the company was made 7 days later by the then resident direction [sic] of the company. This application to de-register the company was made without the approval or knowledge of the shareholder.
It was the invention [sic] of the Grid Powr Groujp [sic] of companies to hold the patent in the name of an Australian company but this plan was derailed by the unexpected de-registration of the company.
This is fully explained in the accompanying Declaration of Gregg Cook, Director of the Grid Powr Group who supports this request for the correction of error to show my name as both the applicant and the inventor. ASIC also supports this application to allow the patent application to continue in my name as the Applicant and Inventor.”
In a letter of 9 January 2024, the delegate noted that, despite the requestor’s submissions to the contrary, there was no evidence of an assignment from ASIC to the requestor and that on de-registration of the applicant the patent application was vested in ASIC, who therefore became the nominated person of record.
The delegate considered that the requested assignment was not an assignment, but rather an assertion that the earlier assignment from the requestor to the applicant was in error and should be cancelled. The delegate was of the view that there was no evidence to support such a conclusion. The only basis for the assignment being considered erroneous was the post-assignment de-registration of the applicant. However, in the delegate’s view, this de-registration in no way rendered the original assignment erroneous or of no effect.
The requestor subsequently made a request under section 36 that they be declared the sole eligible person in respect of the application. The request of 31 January 2024 was accompanied by a declaration by Mr Kreca, as well as a second declaration by Mr Cook dated 25 January 2024 (Cook 2), together with exhibits GC-1 to GC-6. My understanding is that GC-1 to GC-5 are the same exhibits provided with Cook 1. GC-6 is a copy of the letter from Mr Gaetano Astone which was separately provided with the request under section 113.
As ASIC is the nominated person on record (as provided by section 601AD of the Corporations Act 2001), they were approached to indicate whether or not they intended to defend their entitlement. In an email dated 13 May 2024, they advised that:
“ASIC has no direct knowledge of the specific circumstances or background of this matter. ASIC does not intend taking any steps on behalf of the company to assert, exercise, enforce or waive any rights the company may have. If the company itself wishes to do so, then the former officeholders must firstly reinstate the company.
I confirm that, to the extent the entitlement vests in ASIC, ASIC does not intend defending its entitlement and we do not require any further correspondence filed in relation to this request.
ASIC has no objection to the Registrar of IP Australia making an assignment/declaration/decision regarding this matter.”
The matter was set to be heard by written submissions. The requestor filed their written submissions on 26 June 2024.
Relevant events leading up to the present request
10. Around the time that the PCT application was filed, the Grid Powr group of companies was formed between Mr Kreca and a number of investors to promote the technology. Mr Cook administered the group from his office in England. The parent company, Grid Powr AG of Switzerland then incorporated a number of subsidiary companies in various countries. This included the applicant, Grid Powr (Australia) Pty Ltd, ACN 646 809 823.[2] Mr Cook stated that the shareholder of this company was Grid Powr AG of Liechtenstein.[3]
[2] Kreca at [3] to [6].
[3] Cook 2 at [8].
11. At the time of entering the national phase in Australia, it was decided to transfer ownership of the application from Mr Kreca to the applicant. Mr Cook described this as a friendly transfer as Mr Kreca as inventor and a shareholder in the Grid Powr group had an interest on both sides of the transaction.[4]
[4] Cook 2 at [4] to [5].
12. The assignment (the text of which is given above) was prepared but it took some time for the execution to be completed. The effective date of the assignment is 27 January 2021 (the date of national phase entry in Australia), but the assignment was not recorded with IP Australia until 29 June 2021.
13. On 6 July 2021, an application to deregister the Australian company was lodged with ASIC. The company was recorded as being deregistered on 9 September 2021.[5]
[5] Cook 2 at [11], referencing Exhibit GC-4.
14. Mr Cook stated that “[I]t was not until recently that it was discovered that the patent application was in the name of a company which no longer existed in Australia.” Various ways of fixing the problem were apparently investigated, but they were advised to make an application to ASIC, which Mr Cook stated was because “we did not wish to approach the previous director of the company as he was the cause of our problems and was unlikely to assist us in remedying this situation”.[6]
[6] Cook 2 at [12] to [13].
15. An application[7] was made to ASIC on 1 November 2023. The material provided in support of the application to ASIC was not provided, but was said to essentially repeat the material provided in support of the present request.[8]
[7] The evidence doesn’t state what type of application was made to ASIC. The correspondence from ASIC refers to an enquiry made by Pipers, but subsequently refers to the documents not meeting the requirements for a Sale of Property application. The specific nature of this application does not appear to have any significance in the present determination.
[8] Cook 2 at [13], first paragraph.
16. Around the same time, Mr Cook also contacted Mr Astone, the managing partner of Lafaro Accountants to write to ASIC.[9] This firm had originally been appointed to incorporate the Australian company, as well as having been instructed to apply for the de-registration of the company. Mr Astone wrote to ASIC on 31 October 2023,[10] stating that “[W]e consent to the transfer from ASIC to the inventor Ivo Kreca of the Australian patent application number 2018437560 for the consideration of $990”.
[9] Ibid, third paragraph.
[10] Exhibit GC-6.
17. ASIC replied to Pipers on 28 November 2023.[11] ASIC confirmed deregistration of the Australian company and advised that, ordinarily:
a)All property the company held on trust at deregistration belongs to the Commonwealth
b)All non-trust property the company owned at deregistration belongs to ASIC
c)ASIC is the only party legally able to deal with the company’s property.
[11] Exhibit GC-5.
18. ASIC went on to state that it was not appropriate that the patent remain vested in ASIC, and for information provided several options.
19. Option 1 involves reinstatement of the company:
“Applicants should consider reinstatement of a deregistered company before proceeding with any application to ASIC for ASIC to deal with vested property. ASIC exercises its powers to deal with property as a last resort. ASIC reinstatement may be cheaper and usually easier and more convenient.
The former director of the company may be agreeable to reinstating the company to facilitate the transfer…” [footnotes omitted].
20. Option 2 involves an application to IP Australia:
“ASIC has no objection to parties applying to the Registrar of IP Australia for the assignment of the patent. ASIC recommends you contact IP Australia directly.
You may wish to provide the Registrar of IP Australia with a copy of this letter as evidence of our position.”
21. Option 3 involves the requestor making a Sale of Property application to ASIC. Such sales are subject to certain conditions and ASIC will not generally approve applications for ASIC to sell:
a)property held by the deregistered company on trust
b)property owned by a deregistered company and subject to third party disputes (e.g. subject to a Court proceeding)
c)property where ownership is in doubt – the applicant will need to prove that the property vests in ASIC before ASIC will consider selling.
22. In their written submissions the requestor stated that ASIC suggested that instead of applying to ASIC, that they apply to IP Australia for an assignment. I understand this to be one of the options forwarded by ASIC, rather than a recommended approach. However, reinstatement of the deregistered company (Option 1) and an application for the sale of property (Option 3) would require action by the former director, Matthew Champion. Mr Cook’s reluctance to approach Mr Champion to assist in remedying the present circumstances appears to have resulted in the requestor pursuing Option 2.
Summary of submissions
23. The gist of the requestor’s submissions[12] is that:
[12] Submissions filed 26 June 2024.
ASIC has no interest in the patent application and has indicated their consent to the application to have the patent application continue in the name of the requestor.
The declaration of Gregg Cook shows that the shareholder of the deregistered company has no objection to the patent application continuing in the name of the requestor/inventor.
Neither the deregistered company nor ASIC can claim to be a person entitled to the grant of the patent. The former no longer exists as a person. The latter has indicated that it has no interest in the patent application as noted above.
The only person entitled to grant is the requestor/inventor pursuant to s15(1)(a). Noting that s15(1)(d) does not apply to a company only to the legal representative of a deceased natural person.
The requestor asks that the application proceed in his name and that the Commissioner makes a declaration that the requestor is the only eligible person pursuant to s36(1).
Consideration
24. Section 36(1) of the Act sets out that:
“If:
(a) a patent application has been made and, in the case of a complete application, the patent has not been granted; and
(b) an application for a declaration by the Commissioner is made by one or more persons (the section 36 applicants) in accordance with the regulations; and
(c) the Commissioner is satisfied on the balance of probabilities, in relation to an invention disclosed in the specification filed in relation to the application for the patent:
(i) that the nominated person is not an eligible person, but that the section 36 applicants are eligible persons; or
(ii) that the nominated person is an eligible person, but that the section 36 applicants are also eligible persons;
the Commissioner may declare in writing that the persons who the Commissioner is satisfied are eligible persons are eligible persons in relation to the invention as so disclosed.”
25. A declaration must not be made without first giving the nominated person a reasonable opportunity to be heard (subsection 36(3)).
26. The Dictionary at Schedule 1 of the Act defines an eligible person as follows:
“eligible person, in relation to an invention, means a person to whom a patent for the invention may be granted under section 15.”
27. Section 15(1) of the Act states that:
“Subject to this Act, a patent for an invention may only be granted to a person who:
(a) is the inventor; or
(b) would, on the grant of a patent for the invention, be entitled to have the patent assigned to the person; or
(c) derives title to the invention from the inventor or a person mentioned in paragraph (b); or
(d) is the legal representative of a deceased person mentioned in paragraph (a), (b) or (c).”
28. Thus, the invention may only be granted to the inventor or someone who derives title to the invention from the inventor. The general approach to determining who is an eligible person involves the following steps:
Identify the “inventive concept” of the invention as defined in the claims.
Determine inventorship including the person responsible for the inventive concept and the time of conception as distinct from its verification and reduction into practice.
Determine whether any contractual or fiduciary relationships give rise to proprietary rights in the invention.[13]
[13] University of Western Australia v Gray [2009] FCAFC 116; Polwood Pty Ltd v Foxworth Pty Ltd [2008] FCAFC 9.
29. I acknowledge that ASIC clearly has no interest in defending their entitlement in the present matter. However it does not follow that the Commissioner may simply make a declaration that the application proceed in the name of the requestor on the basis that it is uncontested. Section 36 does not give the Commissioner the power to declare that a non-eligible person is an eligible person or to rescind contracts.[14] A declaration pursuant to section 36 requires, inter alia, that the Commissioner is satisfied on the balance of probabilities that the nominated person is not an eligible person, but that the requestor is an eligible person (or that the parties are jointly eligible). That is, the Commissioner can simply record the result of the flow of entitlement not execute a transfer of rights.
[14] Nikki Gadd v MSI (WA) Pty Ltd. [2024] APO 19.
30. There is no question that Mr Kreca was the person responsible for the inventive concept. He has at all times been named as the sole inventor. I can therefore focus on whether there are any contractual or fiduciary relationships that give rise to proprietary rights in the invention.
31. On execution of the assignment agreement, the inventor’s rights to the application were assigned to the applicant. The inventor from that time was no longer an eligible person in relation to the invention. This assignment was absolute. It was not a partial assignment and there is no provision in the assignment for the patent to revert to the inventor in any circumstances.
32. Deregistration of the Australian company meant that the company ceased to exist and all non-trust property the company owned at the time of deregistration belongs to ASIC. ASIC takes the same property rights that the company itself held and has all the powers of the owner over the property that was vested in it.[15]
[15] Section 601AD of the Corporations Act 2001.
33. Thus, ASIC derives entitlement to the application by way of the assignment made from the inventor to the applicant. The fact that they have no interest in application, or that they do not intend to exercise or waive any rights in regard to the application, does not negate or detract from that entitlement. Even if they have no interest in the application, an assignment of rights from ASIC, as the eligible person, would be required for the application to proceed in the name of the requestor (or any other legal person). On that point, I note that Mr Cook suggested that ASIC consented to the transfer back to the inventor.[16] I do not understand that to be the case. Mr Cook referred to the second option given in ASIC’s letter, which stated that they had no objection to parties applying for the assignment of the patent. That is not the same as consenting to the assignment. Indeed, if ASIC expressly consented to the transfer, then an assignment could be recorded in the usual way. A declaration pursuant to section 36 would not be necessary.
[16] Cook 2 at [16].
34. The question remains whether there are any other fiduciary or contractual relationships that give rise to proprietary rights in the invention. As indicated above, the requestor submitted that the shareholder of the deregistered company (Grid Powr AG) has no objection to the assignment of the application. However there is no evidence of Grid Powr AG being recorded as a shareholder (or member) of the company, or any details provided of the rights they held in the company through the company constitution or any other contractual arrangement.
35. Similarly, Mr Astone, whose firm acted under instructions in the deregistration of the Australian company, indicated that consent was given (for the consideration of $990).[17] It is unclear who is providing this consent, or, if it is Mr Astone’s firm, why they are entitled to give this consent.
[17] Exhibit GC-6.
36. In any case, my understanding is that the requestor is not asserting that Grid Powr AG (or any other person) is an eligible person as a result of any fiduciary or contractual relationships that existed prior to the deregistration of the Australian company. Therefore based on the evidence before me, the application properly vested with the now deregistered company, and as a consequence ASIC now has sole entitlement to the application.
37. Finally, the Commissioner does not have the power to rescind a contract, but there might be circumstances where an agreement may be rescinded or voided for misrepresentation,[18] or where an agreement has no effect, such as where a false assumption means there has been no effective transfer of rights[19] or a condition of the agreement, such as provision of consideration, is not satisfied. In the present case it does seem unusual that deregistration occurred so soon after the application was transferred to the Australian company (notwithstanding the apparent difficulties in obtaining final execution of the assignment). However, there may be legitimate reasons why a company would voluntarily deregister. For example, deregistration can reduce legal risks and remove directors from certain legal obligations of the company. But while the requestor has submitted that the deregistration was wrongly done, no details of the specific circumstances surrounding the deregistration are provided. There is no apparent reason to conclude that the actions of any of the parties would void the assignment agreement.
[18] Vahid Vakiloroaya v HVPS Holdings (Pty) Limited [2022] APO 10 at [32] to [36].
[19] Nikki Gadd v MSI (WA) Pty Ltd., supra at [47].
38. The requestor has other options, as set out in ASIC’s letter of 28 November 2023, which could enliven the relevant provisions of the Patents Act. My understanding is that if the Australian company is reinstated it would be taken to have continued in existence as if it had not been deregistered. Any property still vested in ASIC at that time would then revest in the Australian company.[20] A request could then be made pursuant to section 104 (in the name of the applicant) or section 113 (in the name of the requestor) for the application to proceed in the name of the requestor (or any other legal person). An assignment could also be recorded pursuant to a successful application for sale of property. The remedies that enable these actions to be undertaken lie with ASIC, and not with the Commissioner of Patents.
[20] Section 601AH of the Corporations Act 2001.
Conclusion
39. The requestor has not established that they have entitlement to the application. Based on the evidence before me, the entitlement vests with ASIC.
40. The request for the Commissioner to make a declaration that the requestor has sole entitlement and that the application proceed in their name is refused.
Costs
41. The request has been unsuccessful, but ASIC did not defend their entitlement. No award of costs is necessary.
Dr Leslie. F. McCaffery
Delegate of the Commissioner of Patents
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