Lancome Investments Limited v Allan William Allaway

[2002] APO 47

OFFICIAL NOTICE

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Application  :          No. 725651 in the name of LANCOME INVESTMENTS LIMITED

Title:          An Apparatus for Cleaning Synthetic Grass

Action:          Opposition under Section 59 of the Patents Act by ALLAN WILLIAM ALLAWAY

Decision:          Issued 

Abstract

The present application is based on a provisional application and names the opponent as the sole inventor.

The applicant's claim to entitlement within the meaning of section 15 is sourced in an intellectual property assignment deed between the opponent and a corporate predecessor in title, Syn-Grass Resources Pty Ltd (SGR), in respect of the invention disclosed by the provisional application. 

In dismissing the opposition it was found that SGR did not acquire entitlement simply in consequence of the filing of the provisional application in their name alone.  This action did not displace the original entitlement of the opponent as inventor who as a consequence retained the capacity to validly assign rights in the invention until the time he executed the intellectual property assignment deed in favour of SGR.  Further, although the circumstances under which the intellectual property assignment deed was allegedly executed raise issues of law outside the area of the Commissioner's expertise, this does not circumvent the requirement for the Commissioner to form a view on the matter so far as is relevant to a determination of the opposition proceedings (Advantage-Rent-A-Car Inc vAdvantage Car Rental Pty Ltd [2001] FCA 683 applied). The failure by the opponent to ascertain the character of the assignment deed before signing it was found to have been due to carelessness on his part with the result that the assignment deed is not invalid in law.

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent Application No.725651 in the name of LANCOME INVESTMENTS LIMITED and opposition under section 59 by ALLAN WILLIAM ALLAWAY        

BACKGROUND

Patent application 725651 was filed under the provisions of the Patent Cooperation Treaty as application PCT/AU98/00354 on 15 May 1998 by Syn-Grass Resources Pty Ltd claiming priority from provisional application PO6811 filed on 16 May 1997.  The present application was advertised accepted on 19 October 2000, and is now proceeding in the name of Lancome Investments Limited (more conveniently referred to as LIL).

On 15 January 2002 Allan William Allaway opposed the grant of a patent on the application for reasons set out in the statement of grounds and particulars filed on his behalf by Ron Haliday, patent attorney of Cullen & Co, on 17 April 2001.  The service of evidence was completed on 30 January 2002, and I heard the matter in Canberra on 21 May 2002.

LIL were represented by Anthony J Cowle and Chris J Carter, patent attorneys of Davies Collison Cave, who appeared by telephone.  Mr Allaway was not represented at the hearing and instead relied on written submissions filed by Mr Haliday on 17 May 2002.

THE SPECIFICATION

The invention relates to an apparatus for cleaning synthetic grass surfaces such as a synthetic grass tennis court.

Typically, synthetic grass is very durable but the collection of sand and other particulate matter as well as organic matter such as grime, mould and mildew in the synthetic grass leads to premature degradation and a reduction in performance.  Sweeping a synthetic grass surface is normally ineffective in removing this material, and any attempt to clean the surface using a brush in conjunction with washing detergent would be extremely time consuming.

The invention seeks to address these problems through the provision of cleaning apparatus which is defined by claim 1 in the following terms:

An apparatus for cleaning synthetic grass comprising a frame including a brush means for brushing a ground surface, a suction means connected to a particle collection zone located at the periphery of the brush means, a driving means connected to the brush means and operable to activate the brush means to brush a surface to dislodge particulate matter and a baffle means for separating waste matter from particulate matter, whereby the suction means can suck up waste matter from the particulate matter.

In use the particulate matter and organic matter dislodged from the synthetic grass surface is separated by the baffle means such that the heavy particulate matter is redirected back onto the synthetic surface behind the brush means as the apparatus moves forward, and dust and other light waste matter is removed by the suction means.

GROUNDS OF OPPOSITION

The statement of grounds and particulars lists all available grounds of opposition under section 59 but the only ground pursued in evidence and written submissions by Mr Allaway is that he rather than LIL is entitled to the grant of a patent for the invention.

THE EVIDENCE

The evidence provided by Mr Allaway comprises two declarations of his own dated 12 July 2001 and 22 January 2002 accompanied respectively by exhibits AWA-1 and AWA-2 to AWA-6.

The evidence for LIL comprises a declaration dated 12 October 2001 by their principal attorney, Anthony John Cowle, together with exhibit AJC-1, and a declaration dated 25 October 2001 by Sidney Patrick McGreal together with exhibit PM-1.

Mr Allaway is named by the present application as the sole inventor and explains that after conceiving the invention in late 1987 he started a business cleaning synthetic grass tennis courts in the course of which he met a Graeme Roy Evernden and discussed

the problem of not being able to keep up with the workload of having to quote on prospective jobs, complete cleaning commitments, service the equipment, travel and complete the administration by myself.

Mr Evernden offered to assist and went so far as suggesting the appointment of a full time business manager.  He later introduced Mr Allaway to Mr McGreal whom he recommended for the position.  At some point Mr Allaway entered into negotiations aimed at forming a synthetic grass tennis court cleaning venture with Mr McGreal who was to provide marketing and equity in return for Mr Allaway's expertise in cleaning synthetic grass.  A company known as Syn-Grass Resources Pty Ltd (hereafter referred to simply as SGR) was set up by Deacons Graham & James, a firm of solicitors engaged by Mr McGreal, for the purposes of the proposed business venture.  Mr McGreal agreed to have his solicitors draft a business management agreement at the insistence of Mr Allaway.

A number of meetings between the parties took place in 1996 and early 1997.  At one of these
Mr Allaway informed Mr McGreal that he

had been to Griffith Hack Patent Attorneys for a patent application to cover the improvements which I had made to the court cleaning equipment.  McGreal suggested it was more in his department to handle the paper work and for me to stay out of it and concentrate on cleaning tennis courts.  McGreal … asked me for … cash to register the patent in my name … I took Mr McGreal on a "gentleman's word" to carry out ethically the registration of this patent on my behalf as agreed.  This was to take place in May 1997.

Despite numerous requests for a progress report, Mr Allaway heard nothing more from Mr McGreal until 21 November 1997 when he was invited to attend an urgent meeting ostensibly to sign the business management agreement he had requested be drawn up by Mr McGreal's solicitors.  A document was presented to Mr Allaway for execution which he signed following assurances from Mr McGreal that "everything I had requested was covered in it".

Mr Allaway eventually received a copy of the document he had signed several months later only to discover that it was in fact an assignment of provisional application PO6811 from Mr Allaway to SGR (see exhibit AWA-1).  On realising this Mr Allaway

could not believe that I had signed it as it had never been my wildest intention that I would assign the rights to my own invention to anyone whatsoever.

As already noted, the present application was filed by SGR claiming priority from provisional application PO6811.

Mr McGreal is the general manager of LIL.  He confirms negotiations were in train with Mr Allaway but says that on his understanding the proposed business venture would entail the transfer of Mr Allaway's rights in the invention in favour of SGR.  In April 1997 Mr McGreal engaged Deacons Graham & James to prepare documentation to give effect to the business venture, including an intellectual property assignment deed.  On 11 September 1997 Deacons Graham & James wrote to Mr Allaway alluding to the proposed transfer of his rights to SGR.  Mr Allaway is said to have acknowledged the letter on 3 October 1997 (see exhibit PM-1).

Mr McGreal also attests to his attendance at the meeting of 21 November 1997 with Mr Evernden where he says the assignment deed prepared by Deacons Graham & James was duly executed by Mr Allaway.

In supporting their claim to beneficial ownership of the invention, LIL have drawn particular attention to what they say was an intention on the part of Mr Allaway at all relevant times to assign his rights to SGR.  During the course of the hearing Mr Carter stated he was aware of additional documentation evidencing that intention which I subsequently permitted into the opposition proceedings given the potential relevance of such documentation to the matter presently in dispute.

Copies of the additional documentation relied on by LIL are attached as exhibits CJC-1 and
CJC-2 to a declaration made by Mr Carter on 20 May 2002.  Exhibit CJC-1 is a draft intellectual property assignment deed allegedly signed by Mr Allaway and Mr McGreal on 26 April 1997, that is, before the filing date of provisional application PO6811.  The remaining exhibit is a draft provisional specification forwarded to Mr Allaway for review preparatory to filing provisional application PO6811.  The first page of the draft specification designates SGR as the applicant.

After deciding to admit the additional documentation I allowed Mr Allaway an opportunity to respond which he did in the form of a declaration dated 12 June 2002 together with exhibits AWA-7 to AWA-9.

Mr Allaway dismisses exhibit CJC-1 as a fabrication.  He says the signature against his name in the exhibited draft intellectual property assignment deed as well as the hand-written insertions including the date of 26 April 1997 are not in his handwriting.  He also draws attention to the fact that the draft assignment deed names a non-existent company, IP Entity Pty Ltd, as the assignee and moreover fails to specify what intellectual property is to be assigned.

Mr Allaway is also highly critical of exhibit CJC-2 which he claims essentially duplicates the provisional specification originally prepared for him by the patent attorney firm of Griffith Hack & Co in August 1996, but with the name of the applicant having been changed to SGR without his knowledge or consent.

I will return to the evidence and the submissions made at the hearing and in writing where appropriate in my decision.

DECISION

The entitlement of a person to the grant of a patent is provided for in section 15, which states:

15 Who may be granted a patent?

(1) 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)

(2) A patent may be granted to a person whether or not he or she is an Australian citizen.

In the somewhat unusual circumstances of the present case LIL claim entitlement under section 15(1)(c) by virtue of the assignment of Mr Allaway's rights in the invention embodied in provisional application PO6811 to SGR which were in turn assigned to LIL.  On the other hand Mr Allaway asserts that the intellectual property assignment deed relied on by LIL to substantiate their claim to entitlement is wholly ineffective.  Provisional application PO6811 was filed by a person other than Mr Allaway several months before the assignment was executed which meant, so the submission proceeds, that at the date of the assignment Mr Allaway had no rights in the invention to assign.  On this basis Mr Allaway urges that the entitlement originally afforded to him by section 15(1)(a) should be reinstated.

There is no suggestion from either party of any special contract or term of employment which would have vested rights in SGR to the exclusion of Mr Allaway pursuant to 15(1)(b).

LIL have in response focussed on the understanding said to exist between the parties that rights in the invention would lie with SGR under the terms of the proposed business venture.  For reasons which will become apparent, this does not bear on the fundamental question of whether any entitlement to the grant of a patent resides with Mr Allaway.  However, in view of the way each party has presented their case it is, in my view, prudent that I consider Mr Allaway's alleged intention to relinquish ownership of the invention.
As it turns out the paucity of evidentiary support presented by both parties has made it difficult for me to reach any firm conclusion as to what actually transpired in the critical period leading up to 21 November 1997.  Certainly Mr Allaway is emotionally involved in this matter and the objectivity of his evidence suffers because of this.  Not all sits well with the evidence of Mr McGreal either which does not seriously contest the claims made by Mr Allaway and, curiously, is not corroborated by other key figures in the dispute, most notably Mr Evernden.

Nevertheless, ultimately I must decide who between LIL and Mr Allaway is entitled to the grant of a patent and in doing so may act on any material which is logically probative.  In this the onus lies with Mr Allaway to prove his case on the balance of probabilities.

Despite the absence of forensic evidence, it is apparent that Mr Allaway's purported signature on the draft intellectual property assignment deed (exhibit CJC-1) is not witnessed and, when judged by the eye, appears to differ in material respects from that found in documents in his own evidence.  Moreover, the date on which the draft assignment deed is alleged to have been signed seems quite surprising when Mr McGreal has stated that he originally met with his solicitors on 8 April 1997 who over "the next few months" prepared documentation to give effect to the proposed business venture with Mr Allaway, including the intellectual property assignment deed.  Indeed exhibit PM-1 clearly suggests that the expectation that Mr Allway's entitlement would eventually pass to SGR was first raised with him by Mr McGreal's solicitors several months at the earliest after the draft assignment deed was supposedly signed.  It is also rather odd that Mr Allaway's signature was sought in the first place if, as Mr Carter has stated, the assignment deed was not ready for final execution at the time and nor had "the company which was intended to own the rights to the invention" been finalised.  I further note in this regard that the draft assignment deed does not even identify what intellectual property rights were to be held by the future company.

Exhibit PM-1 is a copy of a letter dated 11 September 1997 from a Mr Phillip Hourigan, Senior Associate of Deacons Graham & James (Mr McGreal's solicitors), to Mr Allaway which relevantly reads:

Part of the arrangement also involves the transfer by you of your intellectual property in the Tennis Court cleaning invention to Syn-Grass Resources Pty Ltd for a consideration of $1.

Before proceeding you must confirm to us either that you have obtained independent legal advice about the documents or that you have read the documents and elected to proceed without any undue influence from Patrick McGreal, the Syn-Grass Companies or …

There is no evidence to establish whether the "documents" referred to by Mr Hourigan included an intellectual property assignment deed.

LIL say that Mr Allaway acknowledged receipt of the letter on 3 October 1997.  According to Mr Allaway, exhibits AWA-5 and AWA-6 confirm that he did not see the letter until it was handed to him along with a copy of the executed intellectual property assignment deed by Mr McGreal on 27 July 1998 which is consistent with the impression otherwise gained from his evidence that Mr Allaway had not been notified before then that his rights in the invention were to become the sole property of SGR.  In written submissions Mr Carter disputes Mr Allaway's account of events on the basis of a statement allegedly made by Mr Hourigan.  While not doubting Mr Hourigan's credibility, especially given his standing as a member of the legal profession, the fact remains that I do not have the benefit of any direct evidence from him on this point and in particular how and when the letter was delivered to Mr Allaway.  It is also unfortunate that Mr McGreal has not responded to the case put by Mr Allaway regarding exhibit PM-1 even though he has had ample opportunity to do so.

Most notably, the letter comprising exhibit PM-1 is stamped with the words "Acknowledgement of conditions listed above" above a signature purportedly belonging to Mr Allaway which LIL argue verifies his receipt of the letter on the date indicated in handwriting alongside the signature, namely, "3/10/97".  The evidence does not establish the circumstances in which the stamp was applied.  However, for the same reasons discussed in relation to exhibit CJC-1, I have some misgivings concerning the authenticity of this signature while the nature of Mr Allaway's asserted "acknowledgement" of the letter seems an unusual way of confirming as requested by Mr Hourigan that he (Mr Allaway) had elected to proceed with the proposed business venture or, alternatively, sought independent legal advice.

For completeness I note that exhibit CJC-2 comprises an undated draft copy of a provisional specification which contains some hand-written comments made by Mr Allaway.  The draft specification includes drawings additional to those found in the provisional specification originally prepared on Mr Allaway's behalf by a registered patent attorney, Cliff Carew, on
28 August 1996 (see exhibits AWA-7 and AWA-8), and is substantially identical to the specification eventually filed with application PO6811.  A "Patent Application" cover sheet is attached to both draft specifications.  Importantly, the cover sheet of exhibit CJC-2 differs from that of exhibit AWA-8 in that the person listed as the applicant has been changed from Mr Allaway to SGR.

LIL submit this demonstrates Mr Allaway's acquiescence to a transfer of ownership prior to filing provisional application PO6811.  However, despite the uncertainty in the evidence on this point I think it is more likely that Mr Allaway was not even alerted to the existence of SGR until after the event.  It will be recalled that provisional application PO6811 was filed on 16 May 1997.  As already mentioned in connection with exhibit CJC-1, by late April 1997 the name of the company intended to hold rights in the invention had not been decided and, when viewed benignly, exhibit PM-1 shows that Mr Allaway was not informed of the incorporation of SGR until the following September at the earliest.  Indeed there is material on the official file of provisional application PO6811 to show that SGR was only registered on 15 May, and thus the emergence of SGR as the applicant named in exhibit CJC-2 which was allegedly forwarded to Mr Allaway prior to then seems fortuitous.

In view of the foregoing I believe the conclusion most consistent with the available evidence is that Mr Allaway did not agree that his invention would become the property of SGR once established.  Although not expressly raised in evidence or submissions, this finding disposes of the possibility of an implied assignment between Mr Allaway and SGR (per Speedy Gantry Hire Pty Ltd & Anor v Preston Erection Pty Ltd [1998] 210 FCA).

However, as noted earlier, this does not decide the central issue of entitlement.  There is no dispute that on 21 November 1997 Mr Allaway executed an intellectual property assignment deed in favour of SGR in respect of the invention the subject of provisional application PO6811.  Mr Allaway has argued that the assignment deed is of no effect since at the time of its execution he did not have any assignable rights in the invention.

I consider this submission to be unfounded in law. Unlike the Patents Act 1952, an applicant for a patent does not have to be entitled to do so under the scheme of the 1990 Act. Section 29 places no constraint on who can apply and, as specified by section 15, the 1990 Act only restricts the category of persons to whom a patent can be granted. So far as is relevant, these are the actual inventor or persons deriving title from the inventor by assignment. When a patent is granted, particulars of the patent are entered in the register. In addition to requiring particulars of patents in force to be registered, section 187 also makes such a requirement in respect of prescribed particulars, including the transfer of ownership of the patent by the original grantee and thereafter by successive assignees. The Commissioner cannot refuse to record an assignment on grounds relating to the entitlement of the original grantee (George Stack v The State of Queensland [1996] 739 FCA 1).  However, as stated in Stack v Brisbane CityCouncil [1999] FCA 1279:

… although assignment or devolution by law of the patent prior to revocation carries an entitlement to registration as the proprietor of the patent, registration does not cure a defect in the title which renders it liable to revocation because it should never have been granted originally.

In the present instance I do not perceive a defect at any material time in the entitlement of Mr Allaway.  As the sole inventor, Mr Allaway clearly falls with section 15(1)(a) and LIL ultimately rely on his entitlement to the original grant of a patent as the source of their rights in the invention.  Provisional application PO6811 was made in the name of Syn-Grass Pty Ltd.  The name of the applicant was subsequently amended to SGR since the former applicant apparently did not then exist (exhibit AWA-2).  Whatever the case may be, it is evident from the current legislative framework that Syn-Grass Pty Ltd (or, thereafter, SGR) did not acquire entitlement within the meaning of section 15 simply in consequence of the filing of the provisional application in their name alone.  Put another way, the filing of provisional application PO6811 by a person other than Mr Allaway did not of its own accord disturb his original entitlement.  There is no evidence, indeed no suggestion, of any other chain of title prior to 21 November 1997, and it therefore follows that such entitlement remained with Mr Allaway until the date he executed the intellectual property assignment deed in favour of SGR. 

This brings me to what I understand is at the core of Mr Allaway's claim to entitlement, that is, that he was led by Mr McGreal to believe that the document he signed on 21 November 1997 was something different from the assignment deed which it in fact was.  Mr Allaway has submitted that without his glasses he was incapable of reading the document before signing and so relied on the advice of Mr McGreal

that I did not have to read the document as everything I had requested was covered in it.  The document was already open on the table at the back page ready for signing.  I was handed a pen and told to sign.  Evernden and McGreal both signed at the same time.

In challenging the relevance of Mr Allaway's sight impairment, Mr Carter directed my attention to Falkenhagen et al v Polemate Pty Ltd [1995] APO 32 where the delegate held:

… even if Falkenhagen's sight was impaired at the relevant time, given that he signed the minutes I believe it is reasonable to conclude that he was aware of their contents, and by signing agreed with them.  Thus there is no basis for me to doubt the authenticity of these minutes or Falkenhagen's knowledge of them or their content.

I am not convinced that this finding applies to the situation here.  The document signed by Mr Falkenhagen was a record of a meeting at which he was present which to my mind explains why the delegate was of the view that despite his impaired sight Mr Falkenhagen would not have misapprehended the purport of that document.  In the present case Mr Allaway has maintained the position that he did not knowingly sign the assignment deed which, as already stated, is consistent with the sense left by the available evidence that he had no intention of assigning his rights in the invention disclosed by provisional application PO6811 to SGR or any other person.

Further consideration of the entitlement issue requires examination of the validity of the intellectual property assignment deed itself.  LIL are the successor in title to SGR who in turn rely on the assignment of Mr Allaway's original rights in the invention to them on 21 November 1997.  Mr Allaway disputes the legitimacy of this claim on the basis that the assignment deed should be held unenforceable by reason of Mr McGreal's alleged misleading conduct.  Although I am not aware of any direct authority on the point, it seems from Prestige Group (Australia) PtyLtd v Dart IndustriesInc (1990) AIPC 90-715 that such conduct, and its effect, would ordinarily be the subject of judicial consideration in revocation proceedings where the entitlement of the patentee is in issue. However, while Mr Allaway's allegation as to prior conduct may as a consequence raise issues of law outside the area of the Commissioner's expertise, this does not circumvent the requirement for the Commissioner to form a view on the matter so far as is relevant to a determination of the opposition proceedings (Advantage-Rent-A-Car Inc v Advantage Car Rental Pty Ltd [2001] FCA 683).

In Advantage it was argued that it was not within the competence of the Registrar of Trade Marks to determine at the stage of opposition proceedings whether the use of a trade mark would be contrary to law if it involved issues beyond those set out in the Trade Marks Act 1995. The Federal Court rejected this submission as follows:

The contrary to law ground can fall for consideration at three different stages … The first two are determinations made by the Registrar, which are judicially reviewable by this Court, whilst the third is a determination made by this Court.

However, in my opinion the fact that the existence of any contrariety to law is to be exercised in some instances by an administrative body and, in other circumstances, by a judicial body does not mean that the phrase "if its use would be contrary to law" should have an ambulatory meaning, depending on what kind of tribunal is to apply it.  Nor can any reticence on the part of an administrative decision-maker to express an opinion on a matter of law be encouraged.  The idea that "contrary to law" in the context of judicial proceedings means contrary to all laws, whilst in the context of proceedings before the Registrar it means contrary to laws which are easy for the Registrar to determine or which are "clear cut", is not sustainable.

These principles obviously govern the role of the Commissioner as an administrative tribunal.  It is also apparent from Stack v Brisbane City Council that the meaning applied to the expression "entitlement" in proceedings for revocation is no different from its meaning when it arises for determination in opposition proceedings.

The intellectual property assignment deed is executed under the common seal of SGR.  It carries the signature of Mr Allaway which has been witnessed by Mr McGreal, and has been co-signed on behalf of SGR by Mr Evernden in the capacity of director/secretary.  The assignment deed provides for the signature of a second director, but none is present.  However, in the absence of evidence to the contrary I can only conclude that the seal was applied to the assignment deed in accordance with the articles of association of SGR.

The importance which the law ascribes to the act of signing a legal document may be readily discerned, for example, from the decision of the High Court in Wilton v Farnworth (1948) 76 CLR 646 which stated:

Where a man signs a document knowing that it is a legal document relating to an interest which he has in property, he is in general bound by the act of signature … He may not trouble to inform himself of the contents of the document, but that fact does not deprive the party with whom he deals of the rights which the document gives to him.  In the absence of fraud or some other of the special circumstances of the character mentioned, a man cannot escape the consequences of signing a document by saying, and proving, that he did not understand it.  Unless he was prepared to take the chance of being bound by the terms of the document, whatever they might be, it was for him to protect himself by abstaining from signing the document until he understood it and was satisfied with it.  Any weakening of these principles would make chaos of every-day business transactions.

This is clearly apposite to the present case.  An assignment involves a legal transfer from one person to another, and the reference in Wilton to an interest held in property includes the exclusive rights conferred by the grant of a patent (see section 13).

The assignment deed of 21 November 1997 is noticeably brief.  It provides that in consideration of the sum of $1 Mr Allaway agrees to assign his interest in "Apparatus for cleaning synthetic grass including all rights embodied in Australian Patent Application - PO6811" to SGR, and sets out the conditions governing this transfer in relatively straightforward terms.  Taken at face value, these do not include a reversionary clause and nor are they subject to a contractual obligation or other arrangement lying behind the assignment deed.

Given these considerations the Commissioner would in the normal course of events accept the intellectual property deed of assignment executed on 21 November 1997 as confirming the assent of Mr Allaway to a transfer of his entitlement to SGR.  However, Mr Allaway does not take issue with the validity of the assignment deed as to form.  Rather, he asserts he was induced to sign the assignment deed by Mr McGreal's misleading representations as to its character.  Mr Allaway states that had he appreciated the true significance of the document he would not have signed it.

As made clear by the High Court in Petelin v Cullen (1975) 132 CLR 355, the category of persons who can avail themselves of this defence is limited

… to those who are unable to read owing to blindness or illiteracy and who must rely on others for advice as to what they are signing; it is also available to those who through no fault of their own are unable to have any understanding of the purport of a particular document.  To make out the defence a defendant must show that he signed the document in the belief that it was radically different from what it was in fact and that, at least as against innocent persons, his failure to read and understand it was not due to carelessness on his part.  Finally, it is accepted that there is a heavy onus on a defendant who seeks to establish the defence.

The High Court went on the explain that

when we speak of negligence or carelessness … we are not referring to the tort of negligence but to a mere failure to take reasonable precautions in ascertaining the character of a document before signing it. 

The failure of Mr Allaway to read and understand the intellectual property assignment deed is on the evidence due to carelessness on his part.  Mr Allaway has stated that he has "very limited education" but given his business and innovative activities it seems hardly credible to suggest that he was incapable of comprehending the contents of the assignment deed and its implications.  As previously noted, the assignment deed is not lengthy or complex, and even a cursory inspection would have revealed its true nature.  Mr Allaway further states that he "was prevented from reading the Assignment Deed due to not having my reading glasses with me" and so took Mr McGreal "at face value".  However, this says nothing of why Mr Allaway did not request an opportunity to study the document himself or to obtain independent professional advice before signing particularly if, as asserted, he believed the document to be a business management agreement drawn up specifically at his request.  After all, Mr Allaway's interests stood to benefit from a commercial arrangement with SGR which on his understanding would include "payment for all future costs for obtaining world-wide patents for my invention", and I find difficulty in accepting that the failure by Mr Allaway to make certain that the document presented to him for signature would in fact safeguard those interests was other than the result of his carelessness.  I note here Mr Allaway's evidence that he was "told" by Mr McGreal to sign but this falls well short of establishing that he (Mr Allaway) was the subject of undue influence.

In view of the foregoing I am of the opinion that Mr Allaway did not take reasonable precautions in ascertaining the character of the intellectual property deed assignment before signing it on 21 November 1997 which, as a consequence, I find to be legally valid.

CONCLUSION

I have found that SGR did not acquire entitlement within the meaning of section 15 simply in consequence of the filing of provisional application PO6811 in their name alone.  The original entitlement of Mr Allaway as inventor consequently remained intact until he executed the intellectual property assignment deed in favour of SGR on 21 November 1997.  I have also found that the intellectual property assignment deed is legally valid, thereby confirming the entitlement of SGR at the time under section 15(1)(c).  LIL have subsequently acquired entitlement from SGR by assignment and I therefore conclude that they alone are entitled to the grant of a patent in respect of the invention first disclosed in provisional application PO6811.

Accordingly, I dismiss the opposition by Mr Allaway. 

COSTS

Having considered all the circumstances in this case I see no reason to depart from the normal practice that costs follow the event.  I therefore award costs against Mr Allaway.

O L Haggar
Delegate of the Commissioner of Patents

Patent attorneys for the applicant  :  Davies Collison Cave, Sydney

Patent attorneys for the opponent  :  Cullen & Co, Brisbane