Licotec Pty Ltd, Liquid Composites Australia Pty Ltd and Serge Agafonoff v Composites Interphase Australia Pty Ltd, Composites Interphase Holdings Pty Ltd, Peter Hodgson and Advanced Composites International Pty Ltd
[2013] APO 63
•3 December 2013
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Licotec Pty Ltd, Liquid Composites Australia Pty Ltd and Serge Agafonoff v Composites Interphase Australia Pty Ltd, Composites Interphase Holdings Pty Ltd, Peter Hodgson and Advanced Composites International Pty Ltd [2013] APO 63
Patent Applications: Provisional Applications:
2005905253 – ‘A Method for Manufacturing Very Short Fibre Polymerisable Liquid Composites’
2005905733 – ‘A Method for Manufacturing Very Short Fibre Polymerisable Liquid Composites’
2005906723 – ‘A Method for Manufacturing Very Short Fibre Polymerisable Liquid Composites’
2006900511 – ‘A Method for Manufacturing Very Short Fibre Polymerisable Liquid Composites’
2006902791 – ‘A New Method for Manufacturing Very Short Fibre Polymerisable Liquid Composites’
Complete Applications:
2006303876 – ‘Reinforced Composite Material’
Patent Applicant: Composites Interphase Australia Pty Ltd, now MIRtec Australia Pty Ltd (2005905253, 2005905733, 2005906723); Composites Interphase Holdings Pty Ltd now MIRteq Pty Ltd (2006902791); Peter Hodgson (2006900511); Advanced Composites International Pty Ltd, now MIRteq Australia Pty Ltd (2006303876)
Requestor:Parties associated with Licotec Pty Ltd, comprising Licotec Pty Ltd, Liquid Composites Australia Pty Ltd and Serge Agafonoff
Delegate: Nicole Howard
Decision Date: 3 December 2013
Hearing Date: 13 February 2013, in Canberra by telephone
Catchwords: PATENTS – Request for declaration under s 36 unsuccessful – contribution to inventive concept performed during employment public knowledge – ongoing obligations after resignation as director not applicable - costs awarded against requestor
Representation: Patent applicant: Brendan Nugent, Patent Attorney of Griffith Hack
Requestor:Glen Gordon, Patent Attorney of Hodgkinson McInnes Patents
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Applications: Provisional Applications:
2005905253 – ‘A Method for Manufacturing Very Short Fibre Polymerisable Liquid Composites’
2005905733 – ‘A Method for Manufacturing Very Short Fibre Polymerisable Liquid Composites’
2005906723 – ‘A Method for Manufacturing Very Short Fibre Polymerisable Liquid Composites’
2006900511 – ‘A Method for Manufacturing Very Short Fibre Polymerisable Liquid Composites’
2006902791 – ‘A New Method for Manufacturing Very Short Fibre Polymerisable Liquid Composites’
Complete Applications:
2006303876 – ‘Reinforced Composite Material’
Patent Applicant: Composites Interphase Australia Pty Ltd, now MIRteq Australia Pty Ltd (2005905253, 2005905733, 2005906723); Composites Interphase Holdings P/L, now MIRteq Pty Ltd (2006902791); Peter Hodgson (2006900511); Advanced Composites International Pty Ltd, now MIRteq Australia Pty Ltd (2006303876)
Requestor:Parties associated with Licotec Pty Ltd, comprising Licotec Pty Ltd, Liquid Composites Australia Pty Ltd and Serge Agafonoff
Date of Decision: 3 December 2013
DECISION
No declaration under s 36 is warranted. Costs awarded against Licotec Pty Ltd, Liquid Composites Australia Pty Ltd and Serge Agafonoff.
REASONS FOR DECISION
Background
Provisional patent applications 2005905253, 2005905733, 2005906723, 2006900511 and 2006902791 were filed on 23 September 2005, 17 October 2005, 1 December 2005, 3 February 2006 and 24 May 2006 respectively. Complete application 2006303876 (WO2007/045025) was filed 17 October 2006 under the PCT claiming priority from the ‘733, ‘723, ‘511 and ‘791 provisionals with an earliest priority date of 17 October 2005.
The ‘253, ‘733 and ‘723 applications were filed in the name of Composites Interphase Australia Pty Ltd (now MIRteq Australia Pty Ltd), ‘791 application in the name of Composites Interphase Holdings P/L (now MIRteq Pty Ltd), ‘511 application in the name of Peter Hodgson and ‘876 application in the name of Advanced Composites International Pty Ltd (now MIRteq Australia Pty Ltd). As all the applicants are related it is convenient to refer to them collectively as ‘Mirteq’ throughout this decision. I will distinguish the specific applicants only if necessary.
On 29 September 2011 requests under Sections 32 and 36 of the Patents Act 1990 were filed by Licotec Pty Ltd (hereafter Licotec) claiming sole or alternatively joint ownership of the inventions disclosed in the above applications. On 21 November 2011 Licotec confined their request to Section 36. It is important to note that both parties agree that Peter Hodgson is the sole and true inventor of the inventions being the subjects of this action.
The evidence presented by Licotec consists of the following:
· Statutory Declaration (Para #1-278) by Serge Agafonoff dated 5 September 2011 (Agafonoff 1)
· Statutory Declaration (Para #1-21; Exhibits GHG-1 – GHG20) by Glen Gordon dated 20 April 2012 (Gordon 1)
· Statutory Declaration (Para #1-33; Exhibits SA1 – SA5) by Serge Agafonoff dated 23 April 2012 (Agafonoff 3)
· Statutory Declaration (Para #1 - 6) by Glen Gordon dated 25 June 2012 (Gordon 2)
· Statutory Declaration (Para #1 – 15; Exhibits HI1 – HI3) by Hatsu Ishida dated 27 July 2012 (Ishida)
The evidence presented by Mirteq consists of the following:
· Statutory Declaration (Para #1 – 15; Exhibits GG1 – GG10) by Graeme George dated 18 April 2012 (George)
· Statutory Declaration (Para #1 – 39; Exhibits PH1 – PH10) by Peter Hodgson dated 18 April 2012 (Hodgson 1)
· Statutory Declaration (Para #1 – 9) by Geoffrey Spruce dated 19 April 2012 (Spruce)
· Statutory Declaration (Para #1 – 4) by Peter Hodgson dated 14 June 2012 (Hodgson 3)
At the hearing one month was allowed to serve further evidence rebutting portions of the third Agafonoff declaration and the Ishida declaration. The further evidence consists of
· Statutory Declaration (Para #1 – 20) by Peter Hodgson dated 13 March 2013 (Hodgson 4)
Unless otherwise necessary I will refer to the disputed applications collectively.
The Mirteq specifications
The specifications filed in respect of the present applications relate generally to reinforced composite materials and methods for their production. This includes the production of coated reinforcing fibres having properties that when combined with an appropriate resin, the properties of the resin immediately adjacent to the fibres (known as the interphase) are substantially equivalent to those of the bulk of the resin. This allegedly results in composites that do not embrittle over time.
2006303876
The abstract of ‘876 provides a convenient summary.
‘The composite material comprises at least one cured resin having a reinforcing material. Preferably the reinforcing material is a plurality of glass fibres which are treated such that the properties of the interphase substantially surrounding each fibre are substantially equivalent to those of the bulk cured resin. The fibre treatment may be selected from the group consisting of a polymeric coating, a hydrophilic surface coating, a surface coating of a free radical inhibitor, or a reduction in the total surface area of the fibres. The reinforced composite material of the invention provides improved long-term mechanical properties compared to traditional glass fibre reinforced materials.’
10. The ‘876 description explains that fibre reinforced polymer composites are known in the art and are commonly made by reacting a curable resin with a reactive diluent in the presence of a free radical initiator. Materials such as glass fibre are often included to provide dimensional stability and toughness and traditionally range from about 12 mm to up to tens of metres in length. The fibres are held in position by mechanical friction and there is only relatively weak bonding of the fibres to the resin matrix. The shortcomings of these traditional composites include difficulties in ‘wetting’ the fibres with resin prior to curing and obtaining adequate dispersal of the fibres throughout the composite. In addition, the prior art composites are limited by production techniques which generally require manual layering or are extremely limited in the shape and complexity of the moulds that may be used.
11. The use of very short glass fibres in the resin composites are taught (by the prior art) to overcome these shortcomings. Very short fibre polymerisable liquid composites (VSFPLCs) can produce laminates with high tensile and flexural strengths and comprise a suspension of very short surface treated reinforcing fibres and polymerisable resins/thermosets such as UP resins, vinyl functional resins, epoxy resins or polyurethane resins. The length of the fibres are kept very short so that they do not increase the viscosity of the liquid to where the resin fibre mixture is no longer sprayable or pumpable. VSFPLCs can be used to replace standard fibre glass layouts in open and closed moulding applications and also can be used as alternatives to thermoplastics in resin injection moulding and rotation moulding applications. However, because very short glass fibres are too short to be mechanically keyed into the matrix an improvement in the fibre-to-matrix bond is also typically required.
12. ‘876 goes on to explain that coating the reinforcing fibre with a coupling agent such as Dow Corning Z-6030, (a bi-functional silane containing a methacrylate reactive organic group and 3 methoxysilyl groups) has previously provided such an improvement. The coupling agent reacts with organic thermoset resins as well as inorganic minerals such as the glass fibre. However, (and importantly) the ‘876 description informs the reader that whilst such coupling agents may improve the fibre-to-matrix bond, the usefulness of the reinforced polymer composites is limited since they are prone to embrittlement over time.
13. ‘876 cites PCT Application No. PCT/AU2001/001484 (WO 2002/040577) as disclosing an attempt to address the above-stated problems, where the coupling agent was pre-polymerised prior to coating the glass reinforcing fibre to ‘plasticise the interface’. (It is important to note that this PCT application states Peter Hodgson to be the inventor and that ownership has been assigned to Licotec.) The intention of the pre-polymerised coupling agent was to provide a rubbery interphase between the fibre and the bulk resin and thereby result in a product having improved impact resistance and strength. Nonetheless, the ‘876 description informs that long-term embrittlement of the PCT application composites is still an issue.
14. It is believed that prior art coupling agents coated on the glass fibre act to catalyse resin polymerisation in the interphase (the region directly adjacent the glass fibre) thereby forming an interphase having highly cross-linked material and substantially different properties to the bulk cured resin causing embrittlement over time.
15. The solution to the embrittlement problem of PCT/AU2001/001484 and the other aforementioned issues with previous composites comprising very short fibres is alleged to have been solved by the ’486 application. The approach is to chemically ‘passivate’ (or neutralize) the coupling agent coating, thereby mitigating any effects which the coupling agent may have on the fibre-resin interphase, and enabling the interphase to have substantially equivalent properties to those of the bulk cured resin. It is pointed out that the degree of passivation should be sufficient to mitigate any effects which the coupling agent may have on the fibre-resin interphase whilst still achieving sufficient bonding of the fibre to the bulk resin. Claim 1 is recited as follows:
‘A method for producing a reinforced composite material, comprising: combining at least one curable resin and a plurality of reinforcing fibres,; and curing said at least one curable resin, the cured resin adjacent said reinforcing fibres defining an interphase, wherein said reinforcing fibres are treated such that the properties of said interphase are substantially equivalent to those of the bulk cured resin.’
16. More specifically, the desired result defined by claim 1 is taught to be achieved by treating fibres in a manner that reduces catalysation of resin polymerisation in the interphase. The treatments include applying a polymeric coating, a hydrophilic surface coating, or a coating of a free radical inhibitor to reinforcing fibres, or reducing the total surface area of the fibres thereby providing a corresponding decrease in the quantity of the interphase. A range of treatments are exemplified.
17. I think it relevant to note that within the description and the examples, the reinforcing fibre treatment steps include (along with further steps) cutting or milling of the fibres, cleaning of the fibres (which will remove any sizing agent), and reacting the fibres with the coupling agent Dow Corning Z-6030 (methacryloyloxypropyltrimethoxysilane).
The provisional applications
18. The provisional applications incrementally build a body of work culminating in the complete ‘876 document (described in detail above). Collectively they disclose
· comminution of fibres using a ball mill
· that the fibres should be free of surface modification or contamination
· cleaning of the fibres in boiling water to remove sizing agent
· coating the fibre surface (including ends) with coupling agent dissolved in a low viscosity mixture of monomers and/or oligomers and/or polyesters that contain reactive moieties that can react with organo functional components on silane
· that the coupling agent does not require polymerizing on the surface of the fibre
· the use of the coated very short glass fibres in resin composites
· the resin fraction must be the dominant fraction determining bulk properties in VSFPLCs
19. Pill formation in composites is said to occur when a relatively small percentage of long fibres, i.e. longer than 1mm, interact to form pills/agglomerates of fibres, especially when dispersed in a liquid and are said to be difficult to remove because they keep reforming. The provisionals provide 3 approaches which are claimed to work together to eliminate pilling as follows:
· Reduce the mean fibre length to below 1mm
· Reduce the percentage of fibres longer than 1mm to less than 5%
· Set a practical limit to the fibre fraction volume, ideally less than 30-40%
20. Also disclosed is the reduction of embrittlement in VSFPLCs while maintaining high yield stress by addressing four areas (together) consisting of
· the fibre surface
· the interphase
· the bulk resin
· the fibre fraction
21. In particular, it is emphasized that embrittlement of fibre resin composites is decreased by modifying the interphase so that its physical properties match those of the bulk resin, while maintaining excellent adhesion between the interphase and the fibre surface, such that as much stress as possible is transferred from the bulk resin to the suspended fibres.
Circumstances and grounds of the request
22. Details of the circumstances and grounds upon which Licotec’s request and application are made are relevantly extracted as follows:
Whereas:-
· Serge Agafonoff met Peter Hodgson in 2002, and formed a business arrangement, whereby Agafonoff funded the development of various inventions dealing with a new manner of making fibreglass that Hodgson had been developing, and also funded the patenting costs resulting from these inventions. In early 2002, an existing company was utilised to be the holder of the intellectual property rights for these inventions, which in September 2002 was renamed 'Licotec Pty Ltd', and in which Agafonoff and Hodgson were company directors and shareholders. In February 2003 Agafonoff and Hodgson formed another company, 'Liquid Composites Australia Pty Ltd', initially to take advantage of government grants, as a vehicle to commercialise the new technology. Agafonoff and Hodgson were directors and employees of LCA, as well as shareholders. Later additional people were added as directors of LCA. An exclusive licence for the intellectual property owned by Licotec was entered into giving these rights to LCA on 1 July 2003.
· Hodgson is the inventor of this technology. Agafonoff initially funded Hodgson in return for part ownership in the inventions. Later, the inventions become the property of the Licotec company, of which Hodgson and Agafonoff became the sole shareholders. On 1 March 2004 LCA formally engaged the services of Hodgson as ‘R&D Manager’ to oversee the technical and scientific aspects of the company, and to continue to develop the fibreglass technology.
· In March 2005, after a period of disputation between Hodgson and Agafonoff and the other board members of the Licotec and LCA companies, Hodgson resigned as a board member and as an employee from these companies. The resignation was accepted by these companies as applying as from 21 March 2005. However the parties attempted to overcome their disagreements and mediate some continuing involvement to allow Hodgson to fulfil his duties, some of which were ongoing, until around May 2005.
· Hodgson had acknowledged that the intellectual property for the inventions that he made up to at least 21 March 2005 was owned by the Licotec and/or LCA companies. Licotec submit his duty as a director of these companies, imposed similar obligations on him, some of which were ongoing after he resigned as a director. His terms of engagement as an employee of LCA also imposed continuing obligations on him, after this employment ceased.
We submit the following should be determined and ordered:-
(1) Hodgson has since that time and from 23 September 2005, filed various provisional and complete patent applications in Australia. These appear to be in contravention of provisions in Hodgson's 'Contract for Services' that prohibit him from using LCA's trade secrets and confidential information, which includes intellectual property. We request the provisions of s 36 of the Patents Act be invoked to allow an inspection of the patent specifications that are not open to public inspection, subject to suitable safeguards.
(2) The description in at least some of the patent applications cover subject matter and inventions that were made during the period when Hodgson was obligated to assign ownership to the Licotec and/or LCA companies. As a consequence, Licotec should be a co-applicant, and LCA should be a licensee for such patent applications, in accordance with s 36 of the Patents Act.
(3) The claims in the complete patent applications define various subject matter that at least in part were made during the period when Hodgson was obligated to assign ownership to the Licotec and/or LCA companies. As a consequence, Licotec should be a co-applicant, and LCA should be a licensee for such patent applications, in accordance with s36 of the Patents Act.
(4) The description in the complete patent applications describe various features that are essential to the purported invention for those applications, but these features are features that at least in part were made during the period when Hodgson was obligated to assign ownership to the Licotec and/or LCA companies. However, those features are not defined as part of the claims, as is a requirement under s40 of the Patents Act. If they were so defined then it would be apparent that Licotec should be a co-applicant, and LCA should be a licencee for such patent applications, in accordance with s36 of the Patents Act. These features should therefore be ordered to be included in the claims, as essential to the performance of the invention, before permitting the application to be accepted.
(5) The Licotec and/or LCA companies are persons in accordance with s15(1)(b) namely as a person that would be entitled to have the patent assigned to them upon grant, or (c) as a person deriving title from the inventor or the person from (b). The inventor, Hodgson, was a senior employee of the Licotec and/or LCA companies at the time some of the inventive concepts of the applications were created, in the course of his normal employment, and/or was contractually obligated to assign these inventions to the Licotec and/or LCA companies and/or had a collaborative agreement to share the results of his invention with the Licotec and/or LCA companies. As a consequence, Licotec should be a co-applicant, and LCA should be a licensee for such patent applications, in accordance with s36 of the Patents Act.
Relevant Law
23. Section 36(1) provides for a person to apply to the Commissioner for a declaration that the nominated person is not an eligible person, but that some other person is an eligible person. “Nominated person” is defined by schedule 1 to mean the person identified in a patent request as the person to whom the patent is to be granted, and “eligible person” is defined as a person to whom a patent may be granted under section 15.
24. Section 15(1) provides that 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); ord. is the legal personal representative of a deceased person mentioned in paragraph (a), (b), or (c).
25. Thus section 15(1) contemplates the grant of a patent only to a person who falls into one of the four specified categories. As stated in Vrubel v Upham [1997] APO 51, these categories include the actual inventor as well as persons deriving title from the inventor by way of assignment, an employer-employee relationship, or a collaborative relationship.
26. In this case there is no doubt that Peter Hodgson is the inventor. What I must determine is whether Licotec can legitimately derive title to the invention (either sole or in part) by way of Hodgson’s obligation as an employee or from duties required by him as a director. The case of University of Western Australia v Gray [2008] FCA 498 (upheld on appeal) is relied upon. Following the guidance of UWA v Gray at [1418], I must apply the following principles:
identify the ‘inventive concept’ of each relevant invention as defined by 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 if contractual or fiduciary relationships between the parties at the time of the inventorship give rise to the proprietary rights claimed by the opponent.
What is the inventive concept?
27. Polwood Pty Ltd v Foxworth Pty Ltd [2008] FCAFC 9; (2008) 165 FCR 527 (Polwood) (at [1434], [1438]-[1441]) provides
‘The invention or inventive concept of a patent or patent application should be discerned from the specification, the whole of the specification including the claims. The body of the specification describes the invention and should explain the inventive concepts involved. While the claims may claim less than the whole of the invention, they represent the patentee’s description of the invention sought to be protected and for which the monopoly is claimed. The claims assist in understanding the invention and the inventive concept or concepts that gave rise to it. There may be only one invention but it may be the subject of more than one inventive concept or inventive contribution. The invention may consist of a combination of elements. It may be that different persons contributed to that combination.’
28. The content of the disputed specifications is discussed above. The ‘876 document clearly and repeatedly states the invention to reside in reinforced composite materials (and methods of their production) having a cured resin and a plurality of reinforcing fibres, the cured resin adjacent said reinforcing fibres defining an interphase, said interphase having properties substantially equivalent to those of the bulk cured resin (resulting in a decrease in embrittlement).
29. The provisional applications describe the invention to reside in reinforced composite resin materials that result from a combination of integers that together provide a decrease in the embrittlement of composite resins, asserted to be the result of matching the interphase and bulk resin properties.
30. Licotec submit that at least some of the integers described in the 6 disputed specifications disclose the use of techniques developed by Hodgson when at Licotec and that these features form part of the invention. In particular, in their Statement of Grounds they specify that at least the production of very short fibres using a mill, cleaning the fibres to remove contaminants including sizing, and coating the entire surface (including ends) with a polymerizable/partly polymerized coupling agent were all done previously. They further submit that the purpose of these steps was to solve problems such as the unwanted embrittlement of the composite product.
31. It is not difficult to see that some of these integers/method steps were used by Hodgson while at Licotec. Simple inspection of granted patents 2002301429 (PCT Application No. PCT/AU2001/001484 (WO 2002/040577)) and 2003236389, and provisional applications 2004901197 (filed 10 March 2004), 2004903512 (filed 28 June 2004), 2004904189 (filed 27 July 2004) and 2005900408 (filed 31 January 2005) clearly reveals the use of very short milled fibres, cleaning the fibres to remove sizing and coating the entire surface including the ends with coupling agents. (These patents/applications are owned by Licotec and state Hodgson to be the inventor.) The declarations in evidence are consistent in this regard.
32. However, although these steps were clearly used by Hodgson both in his work at Licotec and afterwards, they do not comprise the whole of the inventive concept of any of the applications. The inventive concept lies in matching the properties of the interphase with those of the bulk resin and is achieved by a combination of integers, only some of which have been demonstrated to have been known at the time of Hodgson’s employ. It is the totality of the integers where the invention lies.
33. Professor Ishida’s declaration provides some further comments on the features of the invention described in the Mirteq applications. As an expert in silane coupling, including chemistry, molecular structure, characterisation methods and their application, Ishida is well qualified to comment. He claims that the matching of interphase and bulk resin claimed in ‘876 may not actually be occurring and that Hodgson misunderstands the chemistry of the fibre/resin composites. He states that ‘unless Hodgson can somehow demonstrate that this layer has exactly the same property as the resin matrix bulk, then the layer he created in the Licotec invention is also an interphase’. However, even if this is the case, Ishida further informs that the Mirteq applications appear to be new in that Hodgson adds a ‘second interphase’ and speculates that this improves the ductility. While he indicates Hodgson’s post Licotec work may be similar to that performed when employed by Licotec he does not state that it is the same.
34. I agree that the production of very short fibres using a mill, cleaning fibres to remove contaminants including sizing, and coating entire surfaces (including ends) with a polymerizable/partly polymerized coupling agent is all known and was performed by Hodgson during his employment at Licotec. The requestors’ case depends on these Licotec fibres being an essential part of the inventive concept. In Mining Equipment (Minquip) Pty Ltd v Mining Supplies Pty Ltd (1999) 45 IPR 566, the delegate outlines at [573]:
“In the present case Minquip assert that Minsup themselves have publicly disclosed all the material, for which they are seeking entitlement, before the priority date of Minsup’s specifications. It would be inappropriate to make any declaration under s 36(1) … for subject matter that the party seeking the declaration … had made publicly available.”
35. Similarly, the information claimed by Licotec to form part of the inventive concept was public knowledge at the time the invention was made. Public knowledge is free for all to use, and therefore cannot be the subject of a s36 declaration.
Who is the inventor?
36. It is not in dispute that Peter Hodgson is the sole and true inventor of the inventions made from 2001 to early 2005 that subsequently became patents and applications currently owned by Licotec, and also the inventions made during 2005 to 2006 which subsequently became the Mirteq applications.
Does the contractual or fiduciary relationship between the parties at the time of the inventorship give rise to the proprietary rights claimed by the opponent?
37. Licotec submit that Hodgson’s terms of engagement as an employee and duty as a director impose continuing obligations on him after his employment ceased and after he resigned as a director.
38. The employment agreement between Hodgson and Liquid Composites Australia Pty Ltd sets out the terms and conditions upon which he was engaged as R&D Manager. The clauses relevant to this s 36 request are extracted as follows:
Confidentiality
6.1 The R&D Manager shall not, during the term of this Agreement, except in the proper course of his duties, nor after termination of this Agreement, except as permitted by the Company, divulge to any person or corporation or use any trade secrets or any Confidential Information concerning:
(a) The business, financial arrangements or position of the company; or
(b) Any of the dealings, transactions or affairs of the business or the Company.6.2 The R&D Manager shall during the period of this Agreement use his best endeavours to prevent the publication, use or disclosure of any trade secret or confidential information referred to in clause 6.1
6.3 The R&D Manager shall not use any letter, note, drawing, memorandum or any other document relating to any matter within the scope of the business of the Company other than for the benefit of the Company and in the proper performance of its duties under this Agreement
6.4 Confidential Information includes all records, intellectual property, documents, accounts, plans, formulae, designs, specifications, price lists, customer lists, correspondence, letters and paper of every description, including copies, relating to the affairs or business of the Company
Documents and Other Property
7.1 All Intellectual Property, documents and copies thereof provided to the R&D Manager and relating in any way to the business or affairs of the Company shall be the property of the Company.
7.2 Intellectual Property means all statutory and other proprietary rights in respect of trademarks, patents, circuit layouts, copyrights, designs, moral rights, confidential information, expertise, knowledge, skills, techniques, methods, procedures, ideas and concepts, planned vehicles and all other rights with respect to intellectual property.
7.3 All Intellectual Property developed by the Company or its employees (Including the R&D Manager) during the course of the employment of the R&D Manager shall belong to the Company and the R&D Manager must sign any document and do all such things that may be required to transfer ownership of the intellectual property to the Company.
7.4 Upon termination of this Agreement, the R&D Manager shall deliver to the Company or its authorised representative without any further demand:
(a)All Intellectual Property documents, including copies thereof, received by the R&D Manger during the course of this Agreement and relating in any way to the business or affairs of the Company; and
(b) Any other property of the Company
Continuing Obligation
Any provision of this Agreement remaining to be performed or observed by the R&D Manager or having effect after the termination of this Agreement for whatever reason remains in full force and effect and is binding on the R&D Manager.
39. It is clear that Hodgson is bound to sign over ownership of any intellectual property created during the lifetime of the agreement and to not divulge or use any trade secrets or confidential information both during the agreement and after its termination. Confidential information includes intellectual property, however this must be understood as intellectual property (including patent applications) that has not yet become open to public inspection. It would be absurd to construe the contract as requiring confidentiality in public information. As I have found above, the material that Hodgson developed during his employment at Licotec, while the subject of a patent application, is public knowledge and therefore cannot be considered confidential or a trade secret. The inventive concept has been found to lie in either a composite wherein the interphase and bulk resin have substantially matched properties, or a new combination of integers/method steps that result in an improved composite with decreased embrittlement issues. The composite and integers/steps may certainly include the fibres and fibre treatments the subject of the Licotec patents. While this publicly available information formed a part of the inventive concept, for a s 36 declaration to be made, it must be shown that the remainder of the inventive concept was performed or conceived during Hodgson’s employment. There is extensive evidence that supports the notion that there was a significant breakdown in the relationship between Licotec and Hodgson. There are also indications that Hodgson had some further work in mind while still employed at Licotec. However, while I am sympathetic to Licotec’s concerns, there is insufficient evidence that Hodgson had actually conceived the present inventions during his employment. I therefore cannot find that Licotec’s request warrants a declaration under s 36 for reason of obligations under his employment contract.
40. Licotec also submit that Hodsgon had a fiduciary duty arising from his director’s duties to develop his technology and inventions, and this duty continued to apply in the period after his departure from Licotec , in relation to inventions developed with the knowledge gained during the more than 39 month period of his direct involvement with Licotec. No such continuing duty is extant in any of the documents. A number of authorities were cited by Licotec, however in my view none of them indicate that a former director of a company should be restrained from filing patent applications directed to new inventive concepts over and above those of the prior art, on the condition that trade secrets and/or confidential information are not disclosed. As discussed above, the features that Licotec assert form part of the inventive concept of the Mirteq applications are disclosed in the Licotec patents and are considered public knowledge. I therefore cannot find that Licotec’s request warrants a declaration under s 36 for reason of fiduciary duty as a former director.
CONCLUSION
41. On the evidence supplied, I have not found that Licotec Pty Ltd, Liquid Composites Australia Pty Ltd or Serge Agafonoff should be listed as applicants or co-applicants on any of the disputed applications.
COSTS
42. It is usual practice for costs to follow the event. I see no reason to deviate from this approach. Accordingly I award costs against the requestors, Licotec Pty Ltd, Liquid Composites Australia Pty Ltd and Serge Agafonoff according to Schedule 8 of the Patent Regulations 1991.
Nicole Howard
Delegate of the Commissioner of Patents
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