L. Church Holdings (Australia) Pty Ltd v. Marine Propulsion Ltd.

[1991] APO 16

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Application No 567598 for a Patent in the Name of L. CHURCH HOLDINGS (AUSTRALIA) PTY LTD and Opposition thereto by MARINE PROPULSION LTD.

Background
On 9 December 1983 Leslie Graham Church lodged an application accompanied by a provisional specification; he lodged the complete specification on 30 November 1984. The Office advertised acceptance of the application in the Official Journal of 26 November 1987, and on 18 February 1988, Marine Propulsion Ltd lodged notice of opposition under s.59 of the Patents Act 1952. Subsequently, pursuant to a request made under s.34(4) of that Act, the Commissioner directed that the application was to proceed in the name L. Church Holdings (Australia) Pty Ltd.
          The matter came to hearing on 12 October 1990 at the Sydney sessions.  Mr S. Williams, Q.C., assisted by Mr K. Varley of Counsel represented the applicant and Mr P. Heathcote, patent attorney of Shelston Waters, represented the opponent.  Mr T. Hardie, solicitor and patent attorney of New Zealand assisted Mr Heathcote.
The Specification
          The description commences:

"This invention concerns ring propellers.

In Australian Patent No. 524,114 a metal ring propeller is described which has a hub, three blades of constant width radiating from the hub, mutually at 120°, each of aerofoil section and a frusto-conical wall concentric with the hub to which the outer ends of the blades are fixed such that the blades, in use, propel water through the annular space between the hub and the frusto-conical wall.  In that

propeller the construction and shape of the frusto-conical wall is subject to various refinements in order to promote efficient flow through the propeller.

Firstly, the inner surface of the frusto-conical wall is that of a frustum with a constant taper from the entry end of the frustum to the exit end thereof.  A taper of six degrees with respect to the central axis of the propeller suffices.

The outer surface of the wall is convex giving the wall an aerofoil section and the leading edge of the frusto-conical wall is bevelled on both its inner surface and outer surface.  The angle of bevel being less for the outer surface than the inner surface.

Reversal of the direction of rotation of a ring propeller produces reverse thrust but as the pitch of the blades is small compared to a conventional propeller the reverse thrust tends to be poor.  This invention seeks to improve the reverse thrust of the above described type of ring propeller."

Then follows a statement of the invention in terms substantially identical to those of claim 1.  The description continues with a definition of "aperture", and information about the preferred arrangement of the "apertures".  Thus:

"In this specification the term "aperture" means an elongated slot or a group of apertures such as individual bores which are clustered or arranged to act in the same way as a slot.  When the aperture is a slot the angle between the rotational axis of the boss and the longitudinal axis of the slot is preferably of the order of 10°.  The length of the slot is not thought critical and may be of the order of half the width of the shroud, namely half the dimension from the leading edge to the trailing edge of the shroud.

The position of the slots in relation to these two edges affects the reversing properties of the propeller and it is preferable to place the slots closer to the trailing edge such that the ratio of the front margin to the rear margin is of the order of 2:1.  The slots are conveniently rectangular in shape, the ratio of length to width being from 5:1 to 7:1."

The specification describes the preferred embodiment with respect to 6 figures of drawings and ends with a statement of eleven claims.  Claim 1 is the only substantive independent claim.  It reads:

"A marine ring propellor comprising:

a boss having a central axis;

a frusto-conical shroud located co-axially about the boss; and

a plurality of blades extending between the boss and the shroud thereby dividing the shroud into equal sectors, each blade having parallel edges and being of constant cross-section between the boss and the shroud, wherein:

the shroud is pierced by a plurality of apertures which are spaced around the shroud, there being at least one aperture per sector; and

the apertures are inclined at an angle of from 2° to 65° to the central axis and the walls of the apertures are inclined at an angle relative to a direction radial to the central axis."

The Evidence
(i)  In Support
          This consists of:

.a statutory declaration by Kenneth Robert Cooke, previously General Manager of Propeller Design Limited, now a financial controller for College Trust and General Manager of the opponent company,

.a statutory declaration by Eric Timothy Smith, an engineer previously employed by Propeller Design Limited, and now the Managing Director of Associated Designers Limited.

Mr Cooke deposes that the opponent, Marine Propulsion, was a company formed after Propeller Design went into receivership.  Marine Propulsion is the assignee of Propeller Design respecting various patents and patent applications, various copyrights and "know how".  Included in the list of patents is NZ 188298 and Au 524114.  (See exhibit KRC1).  The Australian patent claims priority from the NZ patent, and Mr Church is the actual inventor.  Exhibit KRC2 is an assignment executed by Mr Church on 1 May 1979 in favour of Propeller Design in respect of the invention the subject of these two patents.  This assignment includes a paragraph wherein the inventor agreed that the assignee was to be entitled to any improvement in the invention, subject to certain conditions.  Precisely what those conditions are became the subject of argument between the parties at the hearing.  Pursuant to this, and having regard to discussions he had with Mr Church before the latter left his position as managing director of Propeller Design, Mr Cooke believes that Mr Church obtained the invention in suit.  Thus in paragraph 12 of his declaration he states:

"In summation therefore it is my belief that the substance of the invention claimed in Application No. 567598 was obtained from Propeller Design Limited.  It is my belief that since Marine Propulsion Limited were the assignees of all the know-how of Propeller Design Limited, they should be able to restrain Mr Church from seeking to mis-appropriate that information (which he has already unauthorisedly made public by filing for patent protection)."

The substance of Mr Smith's declaration reads as follows:

"2.Prior to Propeller Design Limited going into receivership, I was employed by that company as an engineer.  I have read the complete specification of Mr Church's Patent Application No. 210482* and am quite certain that the subject of slots in the shroud of the propeller described in that the patent specification was discussed between Mr Church and myself whilst we were both in the employment of Propeller Design Limited.

3.I must admit that I did not give the subject of slots very much thought in those days because I was of the opinion that they would detract from the performance of the propeller and now with the passage of time, being several years since Mr Church first mentioned the subject to me, I cannot remember whether Mr Church told me precise details of the arrangements and shape of the slots.

4.However, I have read the evidence of Kenneth Robert Cooke and I certainly find nothing in his evidence to disagree with."

I particularly note the contents of paragraph 3.

*This application is the NZ equivalent of the application in suit.

(ii) In Answer

This consists of:

.a statutory declaration by Leslie Graham Church, the actual inventor, and

.a statutory declaration by Harold Frederick Smart, a friend and financial associate of Mr Church.

Mr Church emphatically denies the allegation of obtaining, and he supports his denial by reference to extensive (copies) of extracts from his personal diary exhibited to the declaration.  About Mr Cooke's comments in paragraph 12 of his declaration, Mr Church states:

"Referring to paragraph 12 of COOKE'S statement, Mr Cooke's summation is totally wrong and MARINE PROPULSION LTD., whether in its own right, or as assignees of any rights from PROPELLOR DESIGN LIMITED has no rights to the present invention, know-how or other rights associated therewith, as at the time of my conception of the present invention, PROPELLOR DESIGN LIMITED was in receivership and I no longer was a part of, or had any responsibility, to that company.  This is clearly demonstrated by the fact that, as stated previously, Mr Cooke had ensured that I had been locked out of the premises of PROPELLOR DESIGN LIMITED and made to take my personal belongings from the premises from that company."

And in answer to Mr Smith:

"Referring to paragraph (3) of the SMITH Declaration, I could not have disclosed the precise details of the arrangement and shape of the slots to ERIC SMITH as these were determined by further testing of prototypes of the reversing ring propellor between the time of filing Australian Patent Application No. PG 2788 on 9 December 1983 and of the filing of this application at the end of 1984.  Indeed, it took considerable effort on my part having conceived the idea of the slots to establish the best parameters for the slots so that they did not have any adverse affect on the forward thrust generated by the propellor but they generated greater reverse thrust than the old ring propellor or indeed any comparable propellor.  In addition to the determination of the optimum design parameters for the slots, it was also necessary to redesign the blades which had different aspect ratios to the blades of the old ring propellor and which did not require the bevels of the latter."

Mr Smart deposes that he has personally known Mr Church since 1979 and that Mr Church has discussed with him

"a great number of matters, relating to his various ring propellors,  his period with PROPELLOR DESIGN LIMITED and the aftermath of his removal from that company as Managing Director."

Paragraphs 3, 4 and 5 of his declaration are most pertinent to the allegation of obtaining:

"3.At no time before August 1983 did LES CHURCH disclose to, or confide in me, details of his reversing ring propellor, the subject of the Patent Application now being opposed by MARINE PROPULSION LIMITED.

4.To the best of my knowledge, to August 1983, LES CHURCH was involved in promoting the original ring propellor, for which PROPELLOR DESIGN LIMITED was established to manufacture and sell and I am aware that he made a number of trips from New Zealand (for example, to Norway and Japan) to promote that propellor.

5.It is my honest belief that if LES CHURCH had conceived the reversing ring propellor before August 1983, when he was still residing in New Zealand, he would have discussed it with me.  To the best of my knowledge, he never advised me that he had ever discussed a reversing ring propellor design with KENNETH ROBERT COOKE or ERIC TIMOTHY SMITH while all three were associated with PROPELLOR DESIGN LIMITED."

(iii)  In Reply
          This consists of:

.a second statutory declaration by Kenneth Robert Cooke;

.a statutory declaration by Peter George Jones, Company Director; and

.a statutory declaration by Edwin John Shaw, Company Director.

(iv)Further Evidence

This evidence was adduced at the hearing by the opponent, in the absence of objection by the applicant.  It consists of:

.a statutory declaration by Mr Heathcote; and

.a third statutory declaration by Kenneth Robert Cooke.

The significance of this evidence is that it corrects a typographical error in Mr Cooke's first declaration, and exhibits a propeller having a slotted shroud, which was previously unavailable because of its use in a parallel opposition in New Zealand.
Submissions
For the Opponent
          The main thrust of the opposition is that Mr Church obtained the invention the subject of the application in suit from Propeller Design, and the opponent is the assignee of that company; opposition is secondarily based on matters concerning s.40 of the 1952 Act.  Here I will present only those matters of major importance supporting the ground of obtaining.  In summary, those matters are:

.the principal facts supporting the allegation of obtaining are to be found in the first declaration of Kenneth Robert Cooke.  That declaration exhibits as KRC-2 a copy of an assignment made by Leslie Graham Church, wherein on the 1st May, 1979, he assigned to Propeller Design Limited, a New Zealand company, certain rights in a marine propeller which formed the subject matter of New Zealand patent application No. 188298, dated 30th August, 1978.  New Zealand patent application No. 188298 is the application from which priority was claimed in respect of Australian patent No. 524114, originally granted in the name of Propeller Design, and now assigned to the opponent.  In clause 3 of the exhibited assignment, the inventor has covenanted as follows:

As the assignee of Propeller Design, the opponent is entitled to the benefit of clause 3 of that assignment (reproduced later in this decision).  In support, refer to exhibit KRC-1 which is an agreement dated 23rd November, 1984 between Propeller Design Limited (in receivership) and Marine Propulsion Limited.  The patents transferred by this agreement include Australian Patent 524114 (the equivalent of New Zealand Patent No. 188298).  As well, Marine Propulsion Limited acquired the know how owned by Propeller Design.

.re paragraph 22 of Mr Church's declaration:

Here Mr Church states that he travelled to Australia (from NZ) and met with a Mr John Taylor of the Department of Trade and Resources, Sydney, who was also a member of the Export Development Grant Board.  He also met with personnel from the NSW State Department of Business and Consumer Affairs, and the NSW State Department of Industrial Development and Decentralization.  From the latter he established that considerable assistance would be available to him for the purposes of setting up an operation in Australia.  Thus it seems at least part of Mr Church's purpose in making this trip to Australia was to seek assistance for setting up a business.

At the hearing, Mr Heathcote pursued the above conclusion with reference to the evidence with a view to showing that

"the invention of slots in the shroud of the propeller was conceived by Mr Church during the course of his employment with Propeller Design Limited and as such, under the terms of ordinary fiduciary duties of a Managing Director to his company, and under the contractual obligations imposed on Mr Church by the assignment dated the 1st May, 1979 between Mr Church and Propeller Design Limited that that technology rightfully belonged to Propeller Design Limited."

In attempting to show that Mr Church had made the present invention (at least in substance) while still employed by Propeller Design in NZ Mr Heathcote went on to explain that:

"It is quite logical that when Mr Church discussed the concept of slots in the shroud he went into some detail with Mr. Cooke at least as to how the slots would function.  A bare statement along the lines that he would introduce slots into the shroud to enhance the reversing characteristics of the propeller would have prompted a query as to what he meant and how the introduction of apertures into the shroud could have an effect on the reversing characteristics.  It is entirely logical to assume that Mr. Church would have explained to the best of his then knowledge exactly what he had in mind.  Thus in paragraph 3 of his first declaration Mr. Cooke states that the objective was to scoop water in onto the thrusting faces of the blades when the propeller was moving in a reverse direction. ... Mr Cooke has no recollection of the precise range 2° to 65° stipulated in claim 1 of the opposed patent application being mentioned to him by Mr Church and indeed there is nothing to indicate that those angles are anything but mere figures on paper having no theoretical or practical justification. ... Thus while Mr Cooke is unable to point to the precise range of 2° to 65° as being knowledge which he knew Mr Church was in  possession of while an employee of Propeller Design Limited it does seem certain that Mr Church was then in possession of an invention requiring slots to be at an angle within the range of 2° to 65° mentioned in claim 1.  The opponents have submitted that, insofar as such a range might have any validity, it must be assumed that such a range was part of the invention conceived by Mr Church while in the employment of Propeller Design Limited unless Mr Church is able to establish the contrary."

Mr Heathcote went on to review aspects of the law of obtaining, and presented me with the following conclusions:

.the weight of evidence discloses a prima facie case that Mr Church misappropriated the technology of Propeller Design Limited for his own purposes,

.the Hearing Officer is entitled to conclude that the whole of the technology in the opposed patent is rightfully the property of the opponent; the onus of rebutting such a
presumption in the light of evidence "must have shifted to the applicant",

.as to the precise ranges and angles defined in claim 1 of the application in suit, the Hearing Officer should adopt the inference that on the facts of this case those limitations, if they have any practical or theoretical foundation, must be taken to be part of the technology which Mr Church's fiduciary and contractual obligations required him to hand over to Propeller Design Limited.

For the Applicant
          Mr Williams' submissions on behalf of the applicant can be summarised as:

.for an invention to be "obtained", there must be an invention, and if Mr Church indicated (but he does not believe he did) on 12 January 1983, that you could put a slot in the ring propeller with a view to improving reversing characteristics, it was only an idea and it had not been reduced to a definite and practical shape and therefore it is not an invention - Permutit Company v Borrowman (Privy Council) (1926) 43 RPC 356 at 359.

.merely slotting a ring propeller is not inventive as it has been done since 1812 A.D., but the invention claimed here involves a particular configuration which has the effect of drawing water onto the propeller when reversing.  There is no evidence that the idea went any further than the prior art at the time.  Therefore the opponent's case fails on two counts: (i) there was no invention; and (ii) the claim for ownership is based on common law implication
in Mr Church's work contract; but, the employer is not the owner of untested ideas.

.exhibit KRC2 to Cooke's declaration is the assignment from Mr Church to Propeller Design Limited of the invention filed in New Zealand on 30 August 1978 under the No. 188298, and it states in clause 3 that the assignee is also entitled to improvements of the invention made within two years of the date of the assignment, i.e. 1 May 1979.  No such application for "improvement" was made before 1 May 1981: the provisional specification in which the application in suit depends was lodged in Australia on 9 December 1983.

.as in Du Pont de Nemours & Company's Application [1965] RPC 582, you cannot "obtain" overseas (New Zealand in this case).

.the applicant is a person who keeps a comprehensive diary and so the evidence he has submitted should be weighted accordingly, whereas Messrs Jones and Shaw, who are not available for cross examination, could each (apparently) remember independently the exact same words of a statement that is meant to have occurred seven years prior to the date of their respective declarations.

.exhibit KRC3 is a shrouded propeller with a circumferential slot extending through the (full) periphery of the annular shroud.  This construction is totally unlike the propeller of the present invention which has a plurality of slots in the shroud each extending transversely of the circumferential direction.  The fact that Mr Cooke produced the propeller of KRC3 after allegedly having discussions with Mr Church (while the latter was still employed by Propeller Design) leads away from Cooke's contention that Mr Church knew about the present invention at the time.

.overall, the opponent has supplied no physical evidence to support its contention that the slot arrangement on a propeller as presently claimed was under consideration by Mr Church before he left the NZ Company.

Decision
          Mr Williams put to me the view that "obtaining" is an act that must be done within this realm; in support he referred to Du Pont de Nemours & Company's Application (supra).  This UK law relates to the time when the UK Act provided for legal rights relating to importation of an invention from a foreign country.  There is no such law in Australia, and just as a person from a foreign country may be a legitimate applicant here, so is it possible for an applicant here to have obtained an invention from a person resident in a foreign country.  See, e.g. Merck & Co Inc v Hoffman-La Roche & Co AG Vol 39 No 10 (1969) AOJP 809.
          Mr Heathcote's submissions on the ground of obtaining reduce to two matters, the first being that the present invention belongs to the opponent (as assignee of Propeller Design) by reason of its having been made (or substantially conceived) by Mr Church while employed by Propeller Design.  He supports this contention by reference to matters in the declarations of Messrs Cooke, Smith, Shaw and Jones.  All of these declarants recall that they had discussions with Mr Church relevant to the propeller of the present invention.

Mr Cooke deposes (inter alia):

"I can recall on several occasions, and in particular one day standing beside the test tank, Mr Church mentioning to me in Mr Smith's presence, the reversing characteristics of the ring propeller which forms the subject of New Zealand Patent No. 188298 and Australian Patent 524114 and ideas Mr Church had to enhance the reversing capability by including slots in the shroud around the blades ... (then follows some detail of how the propeller would operate). ... This is how I as a layman understood the proposals."

and further (referring to claim 1):

"(b)The apertures are inclined at an angle of from 2° to 65° to the central axis".  As mentioned, it appears self evident that the apertures would need to be inclined because the blades themselves are inclined to the axis.  The precise angles are something which would need to be worked out by experiement and may differ according to the blade angles, and operating speed of the boat, but the range given is extremely large and certainly includes angles which I understood would be within the scope of my discussions with Mr Church, and:"

Mr Cooke concedes he is a layman; even so, he later constructed a propeller supportedly based on the discussions with Mr Church, which is exhibited as KRC3 to his declaration of 18 December 1989 (adduced under reg 59).  This propeller has a single circumferential slot in the annular shroud and therefore is not only totally unlike the propeller of the present application, but totally unlike any construction that one might envisage from the text of those parts of Mr Cooke's main declaration dealing with the discussions between himself and Mr Church.
          In his declaration in reply to Mr Church, Mr Cooke states about his exhibited propeller -

"That particular example is just one which I could easily turn on a lathe and was a variant of the ideas discussed with Mr Church which I wished to try."

From this evidence, I conclude that at the time of the various discussions between Messrs Cooke and Church, the latter had not
conceived* the invention in its present form, but - at best - had thoughts about future developments of the propellers already in the possession of the company.
          In my view Mr Smith's declaration adds nothing of significance to this action and I draw attention to the substance thereof - in particular paragraph 3 - which appears under paragraph (i) of the section of this decision headed "The Evidence".
          There remains the declarations of Messrs Shaw and Jones (Company Directors) to be considered.  Both declarants refer to a demonstration of a propeller at which, in the course of conversation with Mr Church, the latter allegedly said:

*Clearly, by this I mean "conceived" based on what he (Mr Church) had disclosed.  From Mr Church's own evidence, he had not conceived the invention till after his migration to Australia.

"I intend to cut slots in the propeller shroud to force water into the blade area thereby increasing the reversing capability of the propeller."

Both declarations were made some 7 years after the date of the demonstration.  Mr Williams drew my attention to the remarkability inherent in the situation that both declarants are so clear on what Mr Church was supposed to have said 7 years earlier that they reproduced a particular portion of his conversation in identical terms in their respective depositions.  I note in passing that Mr Jones also deposes that:

"Mr Church didn't say how many slots he would cut into the shroud."

Overall, there is no physical evidence to support the contention that the invention had been made or conceived in substance whilst Mr Church was still an employee at Propeller Design.  Further, none of the witnesses for the opponent have been able to testify to the effect that Mr Church disclosed the invention to them in the form in which it appears in claim 1: in fact, to an extent, quite the opposite seems true.  In particular I note the exhibited propeller KRC3 as an example of what Mr Cooke produced supposedly in line with what he was told by Mr Church; as I have already commented, this propeller is quite different from the one presently claimed.  On the other side, I have the deposition of Mr Church (supported by that of Mr Smart) stating that he did not disclose the propeller of the present invention to any of the opponent's witnesses - in fact, (he states) he could not, because he had not made the invention at the time, and did not do so till he arrived in Australia in late July 1983.  According to Mr Church's diary (exhibit LGC3), he made the first drawings of the propeller the subject of the application in suit about mid-August 1983.
          What I have before me, then, is contradictory evidence, on the one hand unsupported by physical evidence (except for the negative effect of KRC3), and on the other hand, supported by reference to rather extensive and detailed diary extracts from Mr Church's personal diary.  In his submissions, Mr Heathcote suggested that in the light of the evidence the onus of proof had shifted to the applicant which must rebut the presumption of the "prima facie case that Mr Church misappropriated the technology of Propeller Design Limited for his own purposes".  I do not agree with this proposition.  It is clear from the authorities (see e.g. Stamp v Powell 24 CLR 339) that it is encumbent upon an opponent to prove its case. The standard of proof required is the civil standard, that is, the balance of probabilities as set out (e.g.) by the Court of Appeal in Dunlop Holdings Ltd's Application (1979 RPC 523), in which Buckley L.J., in referring to the UK Patents Act 1949, stated:

"As to the standard of proof, there is nothing in the statute to suggest that any standard different from the normal standard of proof required in civil litigation - that is to say, the balance of probability - should be adopted.  But that standard is not an absolute standard.  The nature of the issue may affect the kind and the cogency of the evidence necessary to bring the scales down on one side or the other.  If something is inherently improbable, more weighty evidence is required to establish that it probably occurred than if it were inherently probable.  There is, moreover, a substantial body of judicial opinion which supports the view that the balance of probability must be more stringently determined in relation to certain classes of subject matter, such as rectification of written instruments, allegations of professional misconduct, questions of marital status and change of domicile."

It is to be noted that Lord Buckley takes the view that the standard is not an absolute standard. He refers to a substantial body of judicial opinion which supports the view that the balance of probability must be more stringently determined in relation to certain classes of subject matter. As the actual inventor (here, Mr Church) has an unfettered right under s.34 of the Patents Act 1952 to apply for a patent, I perceive this action as one such class. Furthermore, I note that a similar view was adopted in the UK long before Lord Buckley's judgement (supra). Thus In the Matter of an Application for a Patent by Ivor Gwynne Perrett 49 RPC 406, the Assistant-Comptroller commented:

"I have said already that the issue of "obtaining" is the one vital issue in the whole case.  In general, this means that the onus is upon the Opponent to prove his case up to the hilt.  Sir Edward Clarke held in the case of Stuart's Application ((1892) 9 RPC 452) that it was not a mere question of the general balance or weight of the evidence. He said: "I do not think I ought to refuse to permit a patent to be sealed unless I am satisfied that no jury could reasonably come to a decision in favour of the applicant"."

Consequently, on the basis of the material before me I could not possibly find Mr Heathcote succeeds in his contention on this first matter.
          The second matter resides in the contention that the invention has been obtained from the opponent by reason of the convenant explicit in clause 3 of the assignment dated 1 May 1979 between Mr Church and Propeller Design.  A copy of this assignment appears as exhibit KRC2 to the first declaration of Mr Cooke.  Clauses 1, 2 and 3 thereof read:

"1.In consideration of the sum of ONE DOLLAR now paid by the Assignee to the Inventor (the receipt whereof the Inventor hereby acknowledges) the Inventor as trustee hereby assigns to the Assignee:

(i)the Invention and all rights, title and interest in the same

(ii)the said Application

(iii)all rights and powers to make any further application for Letters Patent in New Zealand and to make application for equivalent protection in any other country of the world in respect of the Invention in the Assignee's own name or in the name of the Inventor

(iv)so far as it may be necessary all rights, powers, literties and immunities which are, or may be, conferred by the grant of any Letters Patent or equivalent protection in respect of the Invention and in particular where such Letters Patent or equivalent protection are applied for in the name of the Inventor or are granted in the Inventor's name it is intended that such Letters Patent or equivalent protection shall legally and beneficially vest in the Assignee absolutely.

2.The Inventor agrees at the expense of the Assignee:

(i)to give to the Assignee all information and assistance in the Inventor's power to facilitate the obtaining of any Letters Patent or equivalent protection for the Invention.

(ii)to sign, executive and deliver all documents, forms and papers required to be produced or obtained by the Assignee in connection with the application and any other application for Letters Patent or equivalent protection for the Invention.

3.The Inventor further agrees that the Assignee shall be entitled to any improvement of the Invention which the Inventor may make hereafter if prior to the expiry of the life of any Letters Patent or equivalent protection granted in respect of the invention* in New Zealand or elsewhere upon the application or any other application for that purpose made within two years of the date hereof and in pursuance of this clause the Inventor shall promptly communicate to the Assignee full details of any such improvement and of its function, mode of operation and all other relevant facts and theories.  The provisions of Clauses 1 and 2 hereof shall mutatis mutandis apply to such improvement so as to vest the same and all Patent rights and rights to equivalent protection therein in the Assignee."

*i.e. NZ 188,298 (Au 524,114 is the equivalent application in this country and derives priority from the NZ document).

It seems to me that the present application could rightly be said to be an "improvement of the Invention" as required by clause 3, because the complete specification states at page 3, in referring to the prior art as represented by Au 524,114:

"This invention seeks to improve the reverse thrust of the above described type of ring propeller."

[That description is set out more fully earlier in this decision under the heading "The Specification"].
          At the time of execution of the assignment (1 May 1979) both the NZ and Au documents referred to were applications.  Au 524,114 subsequently became a patent, and remained in force till after mid-1990, but at the time of writing, has ceased.
          Mr Heathcote argued that the meaning of clause 3 was quite clear: according to him, it required (inter alia) that the inventor (Mr Church) must, if he makes an improvement in the invention of Au 524,114, before the expiry of any letters patent granted thereon, promptly communicate full details to the assignee; clauses 1 and 2 then also have effect. Mr Williams submitted that if one takes account of the words "hereafter" and "if" in line 2 of clause 3, one finds that as the present application was not made within 2 years of the date of execution of the assignment, the clause does not apply. I cannot agree with Mr Williams. In my view, in order to adopt his interpretation, it is necessary to ignore the phrase "prior to the expiry of the life of any Letters Patent or equivalent protection etc ...". Clearly, the "or elsewhere upon the application" encompasses Au 524,114 which was based (s.141 Patents Act 1952) on NZ 188,298 which, from elsewhere in the assignment, is the "Invention" referred to in this clause; and Au 524,114 was made within 2 years of the date of execution of the assignment, and was in force for many years after the application in suit was made. Consequently, I conclude that clause 3 is applicable in the present circumstances. That being so, the whole assignment is applicable. The terms of clause 3 impose certain obligations on Mr Church should he make an improvement in the invention, the subject of the assignment. However, clauses 1 and 2 envisage that he might make application for a patent for such an invention, and even proceed such application to sealing (see clause 1 para (iv)). In this respect, the terms of the assignment document do not accord with the opponent's allegations of obtaining.
          Obtaining is a matter that has been considered quite thoroughly in the past eg in Space-Cells Systems v E.P.M. Concrete (1979) 49 AOJP 2018, the delegate of the Commissioner stated that in order for an opponent to succeed on the ground of obtaining -

"It must be established:

1.What the invention is that has allegedly been obtained.

2.Whose invention it was when the alleged obtaining occurred.

3.That the claim defines, or includes within its ambit, the invention allegedly obtained.

4.That the applicant actually obtained the invention from the opponent, or from a person of whom the opponent is the legal representative, assignee, agent or attorney, prior to the priority date of the claim."

I am satisfied on points 1 and 3.  That is, the invention allegedly obtained is the subject of the opposed application and the claims define this invention (subject to my comments under the heading Section 40 later in this decision).  As to point 2, it appears from my conclusions in relation to the assignment that beneficial ownership of the invention resided in the opponent (ie as assignee of Propeller Design) at the time of the alleged obtaining.  Point 4 however, constitutes the real issue here.
          The allegation is that Mr Church has obtained the invention from the assignee (the opponent) of the company, Propeller Design.  I have a number of comments to make about this:

.firstly, it is clear from my conclusions on the first leg of Mr Heathcote's argument about the alleged obtaining that Propeller Design was not in possession of the invention at the time Mr Church made the application in suit; the existence of Mr Church's assignment to Propeller Design may well give the opponent beneficial ownership of the invention, but does not alter the situation that the opponent (or its assignor, Propeller Design) was not in possession of the invention when Mr Church applied for a patent.  Therefore he could not have obtained the invention from the opponent.

.secondly, and irrespective of the first point, I do not believe that it is possible for an inventor to obtain an invention (intellectual information) from another, which information was first generated by himself or herself and was consequently already in the possession of the inventor. In this respect I refer to the terms of the Patents Act 1952 whence s.34 provides an unfettered right for the actual inventor to apply for a patent. For an inventor to do so, therefore, could not constitute obtaining. I think this is recognised in the 1952 Act in the distinction between equivalent grounds under s.59, opposition, and s.101, revocation. Thus paragraph 1(a) of s.59 recites -

"that the invention, so far as claimed ... was obtained from the opponent ...,"

whereas equivalent paragraph 1(b) of s.101 recites -

"that the patent, so far as the invention is claimed ... was obtained in contravention of the rights of the petitioner ..."

On my reading of these paragraphs, the former excludes the present situation whereas the latter specifically includes it, and in this respect both paragraphs are consistent with the provision of s.34, mentioned above.
Consequently, I dismiss the allegation of obtaining, but in doing so I comment that the opponent appears to have established at least a prima facie case for a transfer of title of the present application to its own name (cf. s.34(4) Patents Act 1952). However that is a question which the Commissioner would consider only after receipt of a proper application, and subject to the entitlement of both parties to be heard on the matter. Alternatively, as the matter appears to be essentially an ownership dispute based on contractual obligations, the opponent could approach the Courts direct.

Section 40 1952 Act)
          Mr Heathcote submitted that claims 1 and 6 of the specification are not fairly based as the specification clearly envisages the apertures as being only elongated slots or a group of bores emulating an elongated slot, whereas the claims are not so limited.
          He also pointed towards clarity problems in claims 6 and 7.  The applicant made no return submissions.
          At page 2 the specification recites -

"In this specification the term "aperture" means an elongated slot or a group of apertures such as individual bores which are clustered or arranged to act in the same way as a slot."

Claim 1 defines a shrouded propeller in which the shroud is pierced by a plurality of apertures.  The final lines of the claim recite -

"the apertures are inclined at an angle of from 2° to 65° to the central axis and the walls of the apertures are inclined at an angle relative to a direction radial to the central axis."

At page 5 of the specification the description states:

"The shroud 6 has a frusto-conical inner face 12 which defines a 10° taper whereas the outer face 14 is a compound arcuate curve giving an aerofoil section.  Each of the three sectors of the shroud is pierced by three rectangular slots 16.  The slots are spaced equally from one another and from the junctions of the blades with the shroud.  The axis of each slot is inclined at about 10° to the axis of rotation 18 of the boss."

In my view, the definition of the invention in relation to the "apertures" (see the final lines of claim 1 as quoted above), leave something to be desired.  Firstly, the term "apertures" must include the walls thereof as appearing subsequently in "walls of the apertures", it is not clear which portion of the apertures are inclined at 2° to 65°.  Secondly, that angle of inclination has not been clearly identified.  Each slot is located in the shroud and extends generally in the direction of the "central axis".  However each slot is pitched in two directions, one by virtue of the frusto-conical structure of the shroud, the other by reason of only extending generally in the direction of the central axis ie each slot makes a skew angle to that axis.  Similarly, a problem exists with respect to the definition of the inclination of the "walls of the apertures".
          Consequential problems arise with certain of the appended claims as pointed out by Mr Heathcote.  I believe if these problems were removed, then Mr Heathcote's objection relating to fair basis would be avoided.
Conclusion
          I have found that the opposition fails on the ground of obtaining, but succeeds on the ground of non-compliance with s.40 (Patents Act 1952).  On this basis, I allow the applicant 60 days from the date of this decision to propose amendments with a view to removing the s.40 defects.
          As to costs, I note that the opponent only raised the matter of s.40 at the hearing, and the submissions on that subject occupied less than a half hour.  Nevertheless, I consider that the s.40 matter is quite important here, and it was in the public interest that it be raised.  Accordingly, I award costs up to the time of the hearing against the opponent, and the costs associated with the hearing in favour of the opponent.

(J.L. ROVETA)
  Assistant Commissioner

Attorneys for the applicant: Grant Adams & Co
Attorneys for the opponent : Shelston Waters