John Edward Vines v John McDonald

[2005] APO 25

ABSTRACTS OF DECISIONS

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Application  :          No. 2002951031 in the name of John Edward Vines

Title:          Underpants for the Treatment of Pelvic Floor Muscles and/or Bladder

Action: Review of taxation of costs awarded in respect of an action under section 36 of the Patents Act 1990 by John McDonald

Decision:          Issued 6 May 2005.

Abstract

The patent applicant was successful in a matter under section 36 of the Patent s Act and costs were awarded in his favour. Costs were originally taxed at $2,495. The section 36 applicant sought review of taxation under regulation 22.8(4).

A section 36 matter is not an opposition. The practice and procedure for a section 36 matter are determined by the Commissioner under regulation 22.24 and does not proceed under chapter 5 of the regulations. Items 1 to 10 of Part 1 of Schedule 8 do not apply to a section 36 matter.

Where a party relies on written submissions in lieu of attending a hearing, they may be entitled to costs for preparation for a hearing, depending on the circumstances.  In this case the patent applicant was considered to have prepared for the hearing and was allowed costs under Item 11 of Part 1 of Schedule 8.

Costs of $360 were allowed and certified.

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent Application No. 2002951831 by John Edward Vines; and a review of taxation of costs awarded in respect of an action under section 36 of the Patents Act 1990 by John McDonald

BACKGROUND

1. John McDonald filed a request for a declaration by the Commissioner that he was entitled to the invention described in lapsed provisional application 2002951831. A delegate of the Commissioner determined that McDonald was not an inventor of the described invention but that the applicant named on the patent request, John Edward Vines, was the inventor. The section 36 request was unsuccessful. In his decision, the delegate awarded costs against McDonald. See John Edward Vines v John McDonald [2004] APO 33 (30 November 2004).

2. On 10 January 2005, Vines requested a taxation of costs under sub-regulation 22.8(2A).  In a letter from the Opposition Officer dated 12 January 2005, McDonald was given a period of 21 days to object to the application for taxation of costs.  McDonald did not file any objection to or comment on the amount claimed.  Costs were therefore taxed at $2495, the amount claimed by the patent applicant.

3. The parties were advised on 9 February 2005 that:

   “Costs have been taxed at Two Thousand Four Hundred and Ninety-five Dolllars ($2495) and will be so allowed and certified at the expiration of twenty one (21) days.”

4. Although McDonald did not take the earlier opportunity given him by the 12 January 2005 letter to object to the amount being taxed, he filed a request on 10 February 2005 for a review of taxation under sub-regulation 22.8(4).

5. The parties both provided written submissions in relation to the review of taxation.  Clarke and Kann, solicitors, provided submissions on behalf of Mr Vines.  Cullen & Co, patent attorneys, provided submissions on behalf of Mr McDonald.

   REQUEST FOR TAXATION

6. The request for taxation of costs included the following amounts:

Column 1 Item	Matter	Amount
3	Receiving and perusing statement of grounds and particulars	$400
4	Evidence in support	$480
5	Receiving and perusing notice of opposition	$90
6	Receiving and perusing evidence in support	$210
7	Evidence In answer	$480
8	Receiving and perusing evidence in answer	$185
9	Evidence in reply	$240
10	Receiving and perusing evidence in reply	$90
11	Preparation of case for hearing	$360
Total	$2,495

1. That is, the patent applicant has claimed costs for items 3 to 11 set out in part 1 of schedule 8 of the Patents Regulations.

   SUBMISSIONS

2. The basis for McDonald’s request for review is that items 3 to 10 relate to preparation and perusal of documents prescribed under chapter 5 of the Patents Regulations in relation to an opposition. The action in which costs were awarded was not an opposition but a request under section 36 of the Patents Act. The practice and procedure to be followed in such an action is determined by the Commissioner under regulation 22.24 and not under chapter 5 of the regulations. Therefore items 3 to 10 do not apply to a section 36 action and may only be claimed if there has been a variation of costs under sub-regulation 22.8(1). McDonald submitted that there had been no variation of costs by the delegate.

3. McDonald also submitted that Vines was claiming costs for receiving and perusing three sets of evidence, when the section 36 applicant filed only two sets.

4. In relation to item 11, McDonald argued that the patent applicant is ineligible to claim costs for preparation of a case for hearing.  A party is required to pay a hearing fee under item 21 of Schedule 7 of the regulations in order to appear at a hearing.  The patent applicant had not paid the fee and was not heard.  McDonald submitted that written submissions considered by the delegate cannot be considered to be part of a preparation of a case for hearing when the patent applicant, by failing to pay the requisite fee, had no right of appearance.

5. The patent applicant submitted that all the costs specified and awarded are derived directly from Schedule 8.  Vines submitted that, in any event, McDonald had previously been provided with reasonable opportunity to make submissions on the award of costs.  The patent applicant had claimed costs of $2,495 in his written submissions of 16 August 2004 in relation to the hearing.  McDonald had been provided an opportunity to comment on this at the hearing and again in response to the IP Australia letter of 12 January 2005.  McDonald had not made submissions to the costs at either of these earlier opportunities.  The additional costs of responding now to the review of taxation was a further and unnecessary expense to the patent applicant.

6. Vines argued that in light of the legislation, the prior reasonable opportunities to the section 36 applicant to put in written submissions to the award of costs, and the patent applicant’s irrecoverable costs of further response, the award of costs be retained in the sum of $2,495.

   DECISION

7. While the failure of the section 36 applicant to address the quantum of taxation at any earlier date has led to additional cost and inconvenience for all concerned, it does not preclude him from seeking a review of taxation under sub-regulation 22.8(4). It is also not relevant to the review. A review of taxation is restricted to the correctness of the taxation in the context of the award of costs made in the decision which awarded costs. It is not a forum to review the award of costs itself.

8. In a review of taxation of costs in Thomas & Stohr v Chappel & Yates [1993] APO 6 (28 January 1993), a then Assistant Commissioner considered costs in relation to an informant action in relation to a petty patent. The Assistant Commissioner, taking account of observations in Re Yamazaki Mazak Corporation 24 IPR 321 that a section 28 action was not an opposition, stated:

   “In my view the differences between the actions involving a person informing the Commissioner of validity issues regarding a petty patent, and a person opposing the grant of a standard patent under section 59, is carried through to the wording used in schedule 8.

   It follows, in my view, that it is incorrect to:
   - equate a notice under 68B(3) [or a section 28 (1990 Act) notice] to a notice of opposition;
   - equate material accompanying a s.68B(3) notice [or a section 28 (1990 Act) notice] to evidence in support; or
   - equate material filed by the patentee in response to an invitation by the Commissioner, to "evidence in answer".”

9. In previous Patent Office decisions I have applied those considerations to section 32 and section 36 actions - see Noelle-Ann Sunstrum and Jean Payette v Brian Timothy Boland [2003] APO 16 (10 April 2003) at [54] and ACIS and Reel SA v Aluminium Pechiney and ECL [2004] APO 35 (22 December 2004) at [67]. Items 1 to 10 of part 1 of schedule 8 refer to documents and evidence set out in chapter 5 of the Patents Regulations and do not apply to actions under section 36. Therefore the patent applicant is only entitled to these costs if the delegate, when awarding costs, was awarding costs other than in schedule 8, as provided for in sub-regulation 22.8(1).

10. Sub-regulation 22.8(1) is as follows:

    “The Commissioner must not award costs in proceedings to which this Division applies, other than costs specified in Schedule 8, unless each party to the proceedings has had the reasonable opportunity to make a submission on the matter of the award of those costs.”

11. In his submissions for the substantive hearing, the patent applicant listed the costs he should be awarded if he was successful.  The list and amount of costs was the same as that provided in the request for taxation of costs.  The patent applicant submitted that McDonald had been provided a reasonable opportunity to make a submission on the matter at the hearing.

12. While this may be so, I cannot vary the award made by the delegate.  The taxation of items 3 to 10 can only be allowed and certified if the delegate awarded costs, other than costs specified in schedule 8, in his decision of 30 November 2004.

13. The delegate’s decision on costs was set out at [2004] APO 33 at [67]:

    “In this case McDonald has not established that he was responsible for the invention disclosed in the provisional application, i.e. using magnets to treat incontinence.  In the normal course of events, the practice is that costs follow the event.  I see no reason to depart from the usual practice.  I award of costs against McDonald.”

14. The delegate did not explicitly state whether he was awarding costs under schedule 8 or awarding a variation as allowed for in regulation 22.8(1). However, the delegate did state that he saw “no reason to depart from the usual practice”. The usual practice of the Patent office is to award costs according to schedule 8 unless there are circumstances justifying a variation. The delegate did not identify any such circumstances. In my view, unless the delegate explicitly awards a variation from schedule 8, the award of costs should be taken as being an award of those costs in schedule 8. There is nothing in the present case to suggest the delegate was awarding costs other than costs specified in schedule 8. Therefore items 3 to 10 are not allowable costs in the present section 36 matter.

15. The only remaining item is item 11, preparation of case for hearing.  The patent applicant elected not to be heard, instead relying on written submissions.  McDonald argued that Vines was therefore not entitled to a claim for preparation for a hearing.

16. In Hiltive Pty Ltd v Rudolf Hartmann [2002] APO 46, a delegate agreed with a submission “that generally “preparation” includes costs relating to preparation for a hearing irrespective of whether the hearing proceeds”, although the delegate did not allow the cost in the circumstances of that case. The delegate’s conclusion on this point may have some support from sub-regulation 22.23(4), which sets out that a party may rely on written submissions in place of being heard in the following terms:

    “If a party to a hearing does not intend to appear at the hearing, the party may make a submission in writing to the Commissioner before the hearing begins to which the Commissioner must have regard in reaching his or her decision on the matter being heard as if:

    (a) the party were present or otherwise participating in the hearing; and

    (b) the matter of the submission were presented by the party in the presence of the Commissioner.”

17. In Hiltive it was considered that the allowability of item 11 when submissions have been filed in lieu of being heard will depend on the circumstances.  In the present circumstances, the patent applicant indicated three days before the hearing that he would not be appearing and filed submissions at that time.  The patent applicant also indicated that a representative would be available “if it becomes necessary for (the hearing officer) to contact the Respondent at any time for the hearing.”  In my view, in the present circumstances, the preparation of written submissions for the hearing and the availability of a representative of the patent applicant if required is indicative of the patent applicant’s preparation for the hearing.  Item 11 is an allowable cost.

    CONCLUSION

18. I have determined that items 3 to 10 of part 1 of schedule 8 are not allowable costs, but that item 11 of that part is an allowable cost.

19. Costs are allowed in the amount of $360.  A certificate of costs for that amount will now issue

    Brendan Bourke
    Delegate of the Commissioner of Patents

    Solicitors for the patent applicant  :  Clarke and Kann, Brisbane

    Patent attorneys for the section 36 applicant : Cullen & Co, Brisbane