MainRain Pty Ltd and Sunny Daze Trading Pty Ltd v Trentman Pty Ltd
[2015] APO 42
•28 July 2015
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
MainRain Pty Ltd and Sunny Daze Trading Pty Ltd v Trentman Pty Ltd
[2015] APO 42
Patent Application: 2011254059
Title:Terminator Stop
Patent Applicants: Trentman Pty Ltd and MainRain Pty Ltd
Requestors: MainRain Pty Ltd and Sunny Daze Trading Pty Ltd
Delegate: Matt Kraefft
Decision Date: 28 July 2015
Hearing Date: Written submissions completed on 12 May 2015
Catchwords: PATENTS – Section 32 as amended by Intellectual Property Laws Amendment (Raising the Bar) Act 2012 - request for determination of dispute between applicants – one requestor not an applicant - therefore not party to the proceedings – one person found to be sole inventor – application to proceed in the name of one of the parties alone – possible public availability of alleged invention before priority date.
Representation: Patent applicant:
Requestor:Patent Attorney Services.
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2011254059
Title:Terminator Stop
Patent Applicants: Trentman Pty Ltd and MainRain Pty Ltd
Date of Decision: 28 July 2015
DECISION
Section 32 as amended by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 applied in this case. Therefore Sunny Daze Trading Pty Ltd cannot be a party to the present proceedings.
The sole inventor of the alleged invention the subject of the present application was Mr William Breen.
Entitlement to the alleged invention resides solely with MainRain Pty Ltd. The application should proceed in the name of MainRain Pty Ltd alone.
REASONS FOR DECISION
Background
Main Rain Pty Ltd and Mr John Marotta jointly filed patent application 2011254059 on 15 December 2011. The inventors were named as Mr John Marotta (“JM”) and Mr William Breen (“WB”). On 12 March 2013 a request to amend the patent request was made. The request to amend was allowed on 26 March 2013. The applicants were recorded as MainRain Pty Ltd (“MainRain”) and Trentman Pty Ltd (“Trentman”). The inventors were recorded as WB and Mr Peter Marotta (“PM”).
On 8 August 2014, MainRain and Sunny Daze Trading Pty Ltd (“the requestors”) filed a request under Section 32 of the Patents Act for a determination of a dispute between applicants. A statutory declaration and five exhibits by WB accompanied that request. The declaration provided supporting material for the Section 32 request. From that declaration, WB also sought directions to essentially have the patent application proceed with MainRain as the sole applicant, and that PM be removed as co-inventor and that JM be substituted.
Several directions were given to the parties during the evidentiary stages and the matter was then set for hearing. Both parties relied on written submissions.
Specification
The specification states the present invention provides a means to isolate a house water main supply system from any attached appliance. Examples of such appliances are stated to include a toilet cistern, washing machine, dishwasher or mixer taps. By way of background, the specification discusses the application of the alleged invention to a common isolating stop cock valve device that has a female threaded inlet. To seal the female thread to a male nipple thread, tradespersons have had to use a sealing compound such as Teflon® tape, hemp or the like.
The specification describes the main disadvantage with this type of seal being that, when insufficient Teflon® tape, hemp or the like is used, the seal leaks. Another disadvantage is that, when too much is used, the female end of the stop cock can easily split rendering the stop cock useless. With this type of seal, it is also difficult to control the sealing tightness under varying water pressure and to align the stop cock to the appliances.
The alleged invention is broadly described and claimed as a stop cock valve with an inlet configured differently to conventional inlets whilst being adapted for connection to conventional fittings. This description offers very little as to the nature of the alleged invention. From the patent specification as a whole, a more apt description of the alleged invention in its broadest form appears to be the inlet having a sealing means in the form of either a rubber cone grommet or fibre gasket to prevent leaks when the isolating stop cock valve is screwed onto a male threaded nipple.
Evidence
Directions were made that each party had until 3 November 2014 to file evidence in support. Both parties filed evidence in support by this date. Each party then had until 3 December 2014 to file any responding evidence to the other’s evidence in support.
The requestors refiled the above-mentioned Breen declaration (“WB-1”) as their evidence in support. WB was a director of both of the requestors. Trentman filed evidence in support from JM. JM’s declaration (“JM-1”) was accompanied by several exhibits including a declaration from each of his wife, Ms Catherine Marotta (“CM”), and his brother, PM. I will refer to those declarations as CM-1 and PM-1, respectively. JM was a director of Trentman. Subsequently CM and PM became directors of Trentman in place of JM.
The requestors filed responding evidence by 3 December 2014 whilst Trentman did not.
The requestors’ responding evidence was in the form of declarations from WB and Mr Mark Watson (“MW”), a contractor and former business owner and operator in the water treatment and plumbing industries. I will refer to those declarations as WB-2 and MW-1, respectively.
On 11 January 2015, Trentman indicated a desire to file further evidence and subsequently followed up with a request for the admission of further evidence. A delegate of the commissioner considered the nature of the request and comments filed by both parties. The delegate was satisfied that it was appropriate to allow Trentman the opportunity to file the evidence and consequently also gave the requestors the opportunity to file any responding evidence.
Trentman’s evidence consisted of a further declaration (“JM-2”) by JM.
The requestors filed responding evidence (“WB-3”) by WB. The requestors indicated that a particular exhibit, B3 -1, in WB-3 consisted of commercially confidential communications and was submitted solely for the purpose of the present proceedings and not to be disclosed to parties having no interest in the proceedings. Under Section 55 of the Patents Act, evidence in proceedings such as the present is normally open to public inspection. As a way of resolution, Mr Michael John Grant, patent attorney of the firm representing the requestors, filed a declaration stating that exhibit B3 -1 would not be relied upon in the proceedings unless any specifically identified email within the collection of emails in exhibit B3 -1 was referred to and exhibited elsewhere in the requestors’ evidence. Mr Grant exhibited a small subset of the information of exhibit B3 -1. That subset consisted of a list of the email communications in exhibit B3 -1 and a small number of the actual emails from a specific time period. A deputy commissioner then invoked Patent Regulation 4.3(2)(b) to direct that the exhibited material in exhibit B3 -1 should not be open to public inspection.
The written submissions from both parties included material that could be considered to be more evidence. Trentman’s material was not in declaratory form and was unsworn. This is contrary to Patent Regulation 22.12 which requires written evidence to be in the form of a declaration. Nonetheless the requestors treated Trentman’s material as new evidence and consented to the allowance of Trentman’s evidence. The requestors responded to Trentman’s material with a further declaration (“WB-4”) from WB. The restrictions on further evidence are strictly only an issue in oppositions under Chapter 5. Matters under Section 32 are not covered by Chapter 5. In these circumstances, all evidence matters may be set by direction under Chapter 22. I may have regard to any evidence before me if I consider it relevant and logically probative.
Trentman introduced two points as evidence that may have had some significance. The first was the nomination of a date where CM and JM claimed a certain meeting between them and WB took place regarding the disclosure of the terminator stop the subject of the present application. The second related to the dating of the above-mentioned request to amend the patent request. As will be apparent later, the former has not been relevant to decide the present matter. The latter is an issue discussed herein but on the basis of evidence filed previously. The latest additional matter from Trentman on this point has not added anything of further relevance to evidence previously to hand. I have not taken into account any of the material in either party’s submissions that could be considered new evidence.
Applicable Law
On 15 April 2013, the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 (“the Amendment Act”) commenced. This act amended Section 32 of the Patents Act, amongst other sections. Section 32 is now more restrictive than prior to 15 April 2013. Section 32 now only enables any of the applicants in a patent case to request the Commissioner to make a determination. Beforehand, any interested party could have made such a request. The dictionary (Schedule 1) to the Patents Act provided that an “interested party”, in relation to a patent application, means the applicant or a joint applicant, or a person who claims to be entitled to the grant of a patent on the application, either alone or jointly with another person.
The law in respect to disputes between applicants depends on the date the dispute arose (Subsection 133(5) of Schedule 6 of the Amendment Act). The filing date of the Section 32 request by the requestors, 8 August 2014, would be a clear indication of the time that a dispute had arisen. A finding that the date of request is the point at which the dispute arose would mean Section 32 as amended by the Amendment Act would apply in the present case since the Section 32 request date is after the Amendment Act’s commencement date.
One of the requestors though, Sunny Daze Trading Pty Ltd (“Sunny Daze”), is not an applicant in the present case. At best, Sunny Daze may be an interested party. Consequently I should determine whether Section 32 as in force before 15 April 2013 could apply in the present case.
At this point, I should note that Sunny Daze is a 50% owner of MainRain. Trentman owns the other 50%. The impact of this for Trentman is that Trentman is, in part, bringing the present Section 32 action against itself. This has occurred, primarily it appears, as a result of WB being the sole director of MainRain, at least at the time of the Section 32 request.
There appears to be no impediment that a date earlier than the Section 32 request date may be determined under the Patents Act to be the date that a dispute arose. Section 32 itself draws a distinction between a dispute and a request for determination.
MainRain was set up jointly by JM and WB to bring new plumbing products to the market. Terminator stops the subject of the present application were manufactured in China and imported into Australia for MainRain by a company called Austworld Commodities Pty Ltd (“Austworld”). JM was also employed by Austworld. In JM-1 at [1] in fact, JM states he was the general manager. There immediately appears to be a conflict of interest for JM with these arrangements.
The first shipment of terminator stops arrived in December 2012 (JM-1 at [9]) or around 8 January 2013 (WB-1 at [21]). A further shipment arrived about 13 April 2013 (WB-1 at [22]). That was two days before the commencement of the Amendment Act. JM also states the shipment arrived in April 2013 (JM-1 at [9]). The products in this shipment were found to be faulty in that they leaked in use. Austworld made arrangements to have the products returned and repaired in China although JM and WB later decided that a local company be sought to repair the faulty products (JM-1 at [9]). The time period from initially seeking rectification from Austworld to subsequently arranging repairs to be carried out locally was between May and August 2013 (WB-1 at [22]). JM and WB may have had some disagreements in choosing and following an appropriate direction to remedy the situation. There may well have been other disagreements on other issues between JM and WB. For example, Trentman mentioned a deterioration in the relationship from the handling of the request for examination of the patent application whilst the requestors suggested the relationship changed after a follow-up meeting with a patent attorney. However lesser disagreements, that may or may not be resolved, do not necessarily mean the parties were in dispute at that point.
Irrespective of the decision in choosing a local repairer for the faulty products, WB had the view that Austworld should honour its obligations relating to its supply of faulty products and hoped for compensation from Austworld to MainRain (WB-2 at [19]). On the other hand, WB indicated that, at this point, JM told WB that MainRain would need to attend to rectification by dealing directly with the local repairer (WB-1 at [22]). JM went further in stating that WB and JM had agreed that all the responsibility of repair and expenses be accepted by MainRain. This evidence presents a strong indication of the conflict of interest facing JM, noting that he was a manager at Austworld.
Clearly at this point the parties were in dispute. WB laid the responsibility for rectification of the faulty products clearly with Austworld. JM indicated the responsibility should be accepted by MainRain. I place the earliest point at which I am satisfied that a dispute had arisen as the month of August 2013. This is after the commencement date of the Amendment Act.
Section 32, as amended by the Amendment Act and applicable in this case, provides as follows:
(1)If a dispute arises between any 2 or more joint applicants in relation to a patent application whether, or in what manner, the application should proceed, the Commissioner may, on a request made in accordance with the regulations by any of those applicants, make any determinations the Commissioner thinks fit for enabling the application to proceed in the name of one or more of the applicants alone, or for regulating the manner in which it is to proceed, or both, as the case requires.
(2)The Commissioner may make a determination under subsection (1) whether or not the application has lapsed.
(3)The Commissioner must not make a determination under subsection (1) without first giving each joint applicant a reasonable opportunity to be heard.
Sunny Daze is not an applicant or a joint applicant. Consequently Sunny Daze cannot be a party to the present proceedings under Section 32.
In Robert Dommett v Zebra Research Pty Ltd, [2011] APO 53 at [32], the delegate referred to University of Western Australia v Gray, [2009] FCAFC 116, to discuss the law governing disputes over entitlement. The delegate stated that the court accepted that entitlement is assessed by considering three matters:-
1)identify the “inventive concept” of the invention as defined in the claims;
2)determine inventorship including the person responsible for the inventive concept and the time of conception as distinct from its verification and reduction into practice; and
3)determine how many contractual or fiduciary relationships give rise to proprietary rights in the invention.
In submissions, Trentman described the reasons for the present action being to establish the true and just inventor of the terminator stop. The requestors on the other hand described the reasons more broadly as obtaining a determination under Section 32 on the future processing of the patent application. Nevertheless the identity of the inventor(s) remains at the centre of the present dispute. Additionally, as made clear in Gray at [255], the person who made the invention is to be ascertained by reference to the inventive concept.
Inventive Concept
Both sides’ evidence and submissions appeared to share a common view that the alleged inventive concept lay in the particular embodiment as shown in Figure 3 of the specification (JM-1 at [3] and MW-1 at [3]). That is, as described at the top of page 3 of the specification, an isolating stop cock valve with a swivel nut with an internal screw thread with a rubber cone grommet inserted to form a seal adapted to receive an external screw thread. This is a narrower description than the broadest form of the alleged invention I described earlier from the patent specification. The latter description did not include a swivel nut at the inlet. Nonetheless the parties both appeared to take the position that the inlet with a swivel nut with a rubber grommet was the crux of the invention. Figure 3 and claim 4 of the specification reflect this concept. A variant where a fibre gasket is used instead of a rubber grommet is shown in Figure 4 and claimed in claim 5 of the specification. JM stated in evidence (JM-1 at [3]) that he added this variant as well as the variant without the swivel nut to the patent application to discourage others from manufacturing similar products. I will adopt the position of both parties that the inventive concept lay in the inclusion of the swivel nut at the inlet.
Credibility of Evidence
The evidence is noteworthy for the absence of any written agreement between the parties. Agreements to set up MainRain and the nature of its ownership, directorships, structures and its operations for bringing selected products to the market have all appeared to be verbal agreements between JM and WB. It especially appears to be remiss that JM did not pursue a written agreement with WB arising from a meeting CM and JM claimed had taken place at their home with WB at which no less than thirteen (13) terms were supposedly put to WB in respect to the terminator stop.
Both parties have presented evidence that has been less than forthright. Elements of the evidence have been contradictory, both against each of the parties as well as within each party’s own evidence. Other elements have been ambiguous, careless and even plainly incorrect in some cases. The following are some examples affecting the reliability of the evidence as a whole from both sides.
From MainRain’s side, WB was adamant throughout his evidence that the first he knew of PM being identified as an inventor instead of JM was after a meeting JM and WB had with a patent attorney on 7 March 2013 (WB-1 at [18] and WB-2 at [4]). WB’s contention was that, following a conflict of interest raised by the attorney in respect to JM’s involvement with the patent application, MainRain and Austworld, JM wanted to remove himself from the patent application as inventor and applicant. WB exhibited evidence of an email and attachment (Exhibit B3) from JM sent in the evening of 7 March 2013 which asked WB to check and advise on a drafted letter to the Patent Office requesting changes to the patent request. On the other hand the request received by the Patent Office on 12 March 2013 was signed and dated 4 March 2013 by all three of WB, PM and JM. The witness to the signatures also signed and dated the document as 4 March. Moreover the request received by the Patent Office and the email attachment are significantly different in at least one respect. The former is written in the first person by PM as formally making a request while the latter is written as a letter to a staff member of the office.
I conclude two requests to amend the patent request were prepared. One was prepared prior to 4 March 2013, which is the one filed with the Patent Office, and the other after the meeting with the attorney. I consider that JM had decided to remove himself from the patent application prior to any conflict issue raised by the attorney. I also conclude WB knew PM was identified as an inventor prior to that meeting.
From Trentman’s side, examples include JM’s conflict of interest with both MainRain and Austworld. Additionally one or other of JM and PM has been nominated as inventor of the alleged invention at various times. Trentman now seeks directions to have JM re-nominated as a co-inventor. Furthermore PM’s declaration states that he was the inventor. He also states that, about March 2013, JM approached PM about proceeding with the terminator stop and that PM gave JM the authority “to file a Patent”. However this time period coincides with the time that the request to amend the patent request was made. The patent application had been filed about 15 months earlier in December 2011. I conclude that JM had concealed this information from PM.
In JM-1 at the top of page 8, JM states that it “was decided that the patent application and addressing the examiner’s report was more important than the issue of the faulty stock”. In suggesting the prioritising of patent prosecution over customer relations, and the rectification of faults with stock in such circumstances, I find JM’s statement incredible.
CM-1 contains statements of terms and conditions in respect to the terminator stop that are substantially the same as in JM-1. Some of those statements are in the first person. For example, “Bill and I would both remain as the directors of MainRain”, where “Bill” means WB. While the remainder of the evidence from both sides appears to contradict if and when JM held a directorship with MainRain, I am satisfied that evidence overwhelmingly indicates that CM was never a director of MainRain.
Overall I have been unimpressed by elements of Trentman’s evidence.
Establishment of Facts
Whilst the evidence from both parties has to varying extents been compromised for the reasons indicated above, many points in the evidence in this case are peripheral and do not need a resolution. I establish the relevant facts in this case to be as follows.
The Inventor(s)
In March 1997, PM came up with the idea of a loose nut connection on the inlet of a stop cock valve with a rubber grommet to provide a seal when the stop cock valve is screwed onto a male threaded nipple (JM-1 at [2] and JM-2 at [1] and PM-1). PM made a prototype (PM-1) and it was stored in the garage of his parents’ home (JM-1 at [2] and JM-2 at [1]). The prototype consisted of a stop tap valve with the female end removed using a hacksaw and ground flat. The end of a flexible hose connection was also removed and fitted to the cut end of the stop tap valve (PM-1). The prototype merely had the components placed adjacent each other (JM-1, Exhibit B1). That is, the ferrule around which the seal for the inlet was located was not fixed to the body of the valve (Exhibit B1 and WB-3 at [4]). This means that PM’s prototype was a rather crude device.
JM sought patenting advice from a firm called Royal Ideas and Inventions but shelved the patenting process due to costs. Approximately three years later, in April 2000, JM had communicated with Royal Ideas and Inventions again. In May 2000, that firm produced technical drawings of the alleged invention and advice for JM and PM to take to a patent attorney. JM and PM decided not to proceed further at that time due to insufficient funds (JM-2 at [1]). The drawings indicated that significant developmental work had been undertaken from PM’s original conceptual prototype to a workable stop cock valve (WB-3 at [8]). For instance, the ferrule to which the seal in the inlet was mounted was, in the prototype, a short nipple to which the washer of a hose connection may be mounted by being stretched over a slight lip. On the other hand, in the drawings of Royal Ideas and Inventions, the ferrule had a nipple for receiving the sealing ring or grommet that was quite elongated (WB-3 at [7]). The evidence is insufficient to clearly establish which of PM, JM or any other person, was responsible for this developmental work. On the other hand, in various parts of his evidence (JM-1 at [2] and JM-2 at [1]), JM has stated that PM was the inventor. I conclude that, more likely than not, PM was responsible for the developmental work leading up to what JM presented to Royal Ideas and Inventions.
The variant of the fibre gasket was not part of PM’s prototype or in the drawings made by Royal Ideas and Inventions. The evidence suggests JM came up with this variant much later (WB-1 at [16]). However, as noted earlier, the inventive concept lay in the inclusion of the swivel nut at the inlet, and not in any particular sealing means. I find that JM did not contribute to the inventive concept.
In February or March 2009, WB discussed, in confidence with MW, a “nut and tail” connection on the inlet of a mini stop (MW-1 at [3] and [6]). Figure 3 of the present application is exactly like the construction of the mini stop WB had described to MW (MW-1 at [3]).
Having seen the drawings in the Royal Ideas and Inventions report of May 2000 for the first time in evidence in these proceedings, WB described them as a feasible construction of a stop cock according to the invention described in the present patent specification. He further stated that those drawings provided details of the inlet assembly with the swivel nut that JM and WB could have most usefully adopted and used when preparing the present patent specification (WB-3 at [6]). WB has implicitly conceded that those drawings constitute a prior invention in respect to the present specification (WB-3 at [8]).
It would also be apparent from the above that JM had concealed the drawings made by Royal Ideas and Inventions from WB. JM and WB subsequently collaborated to file the patent application without making any use of those drawings.
From the above, I firstly conclude there was no collaboration between PM and WB in coming up with the alleged invention. In fact the evidence indicates PM and WB had very little to do with one another at all. Thus PM and WB independently came up with substantially the same alleged invention, albeit with WB doing so around nine years after the production of the drawings by Royal Ideas and Inventions following JM’s return to that firm with the developments from PM’s original concept. JM was the only common link between PM and WB in respect to their independent alleged inventions potentially making up the subject matter of the present application.
Secondly PM clearly was the first to invent in the present case. On the other hand, the patent system is not based on who was first to invent. Rather the system is based on the first to file. The patent application was filed after both alleged inventors had independently come up with the alleged invention. Thus it is possible in this case for either or both of PM and WB to be declared as inventors of the subject matter of the present application. It thus needs to be next established what PM, JM and WB contributed to the subject matter of the application.
As mentioned earlier, PM’s evidence indicates that he was not even aware the patent application had been filed at the relevant time. PM stated he gave JM the authority “to file a Patent” in about March 2013. The giving of this authority was about 15 months after the application had been filed. Consequently PM cannot be said to have contributed to the subject matter of the application. It thus may only be possible in this case for PM to be named an inventor in respect to the present application if JM conveyed PM’s alleged invention when collaborating with WB to file the application.
In respect to collaboration between JM and WB about filing the patent application, the evidence is contradictory as to the nature and timing of discussions around the terminator stop. WB indicated that discussions with JM concerning three of WB’s product ideas occurred concurrently around July 2010. The products were a device known as a changeover valve, the terminator stop the subject of the present application and one other product (WB-1 at [6]-[8]).
On the other hand JM stated that he first raised the terminator stop with WB as PM’s invention after commercial success with the changeover valve (JM-1 at [6]). No date or time period was provided by JM at this point as to when this supposed discussion took place. WB indicated the changeover valve was introduced to the Australian market in about September 2011 and achieved sales success reasonably quickly (WB-1 at [13]). Noting also that the present application was filed on 15 December 2011, I would place the timing of such discussion, if it occurred according to JM’s version of events, as sometime between those two dates. This is more than a year after WB stated he discussed his terminator stop invention with JM around July 2010.
CM and JM further stated the nature of the meeting with WB was such that, once WB had agreed to several terms put to him, JM disclosed the terminator stop to WB. I have earlier mentioned a meeting CM and JM claimed had occurred where no less than thirteen terms were supposedly put to WB for agreement.
I have difficulty accepting that this is what occurred. As I have already mentioned, there is no written agreement in evidence that these thirteen terms were put by JM or CM and accepted by WB. It seems implausible that JM or CM would put such a relatively large number of terms to WB only verbally and expect WB to retain all those terms by memory alone. Moreover, CM and JM claimed that one of those terms was that PM “must be named as the inventor”. On the other hand, the patent application was filed shortly after the supposed meeting naming JM as an inventor and not PM. While JM claimed that WB was responsible for filing the patent application and got the details wrong, JM on the other hand was a co-applicant at the time. One would thus presume he would have had an interest in checking the application details after the application had been filed. If it were correct that an agreed term was that PM “must be named as the inventor” (my emphasis), I find it extraordinary that it took 15 months before JM took any action to amend the application details.
Moreover, the period of time between the supposed meeting about the thirteen terms claimed by CM and JM and their declarations was about three years. Given this elapsed period of time and the absence of any written record, I wonder how accurate CM’s or JM’s recollection of all the supposed agreed terms could be. The evidence from both CM and JM on these terms is substantially the same, even to the point of being in the first person on the same things. I have already mentioned the difficulty with CM’s declaration being in the first person on at least one point that did not apply to her. Rather than their evidence being corroborative, I find it more plausible in the present circumstances that CM and JM prepared their evidence together.
I conclude the nature of discussions at the supposed meeting as put by CM and JM is implausible. From this, it would now be evident that the nominated date of the supposed meeting, as put in Trentman’s submissions, is irrelevant.
I have no doubt that at least one meeting in some form took place between JM and WB in respect to the introduction of the terminator stop and the filing of the patent application in respect to that stop. WB indicated that his original proposals and drawings formed Figures 1 to 3 of the drawings of the patent application (WB-1 at [16]). MW independently corroborated that Figure 3 exactly reflected the stop WB had described to MW (MW-1 at [3]). Figure 1 is different. It does not show the swivel nut. This figure also does not show any sealing means. Moreover, Figure 1 is substantially the same as an illustration of a prior Austworld cistern stop, designated TH73 (JM-1 at [3] and Exhibit A10). Since JM was employed by Austworld, I conclude that JM contributed at least Figure 1 to the patent specification.
JM further stated (JM-1 at [3]) that he alone commissioned an engineering draftsman to produce detailed drawings “for the purpose of procuring a patent”. In an email (Exhibit A9) sent to the draftsman on 5 December 2011, that is ten days before the application’s filing date, JM attached illustrations of the TH73 product for the draftsman to use to produce modified drawings illustrating the terminator stop. On the other hand, the draftsman’s drawings (Exhibit A11) could not have formed the basis for the remaining Figures 2-4 of the patent specification. Although the smallness of some text makes it difficult to read the date, some of the draftsman’s drawing sheets appear to show the date of 1 May 2012. The draftsman’s invoice though is clearly dated 12 May 2012. This is about five months after the application’s filing date. I think the more plausible explanation for commissioning the draftsman at this time was to produce engineering design drawings for commercial production (WB-2 at [10]).
I have concluded above that at least Figure 1 of the specification was contributed by JM. However that figure does not reflect the inventive concept. Moreover there is a paucity of clear evidence of what, if anything, JM adapted of Figure 1 to reflect PM’s alleged invention or of what JM conveyed of substance about PM’s alleged invention when collaborating with WB to file the patent application. Furthermore I have already noted at least two other circumstances where JM had concealed relevant information from relevant parties. Consequently I think the nature of what JM discussed about PM’s alleged invention with WB when preparing the patent application would be speculative. I conclude there is no clear evident causal link from JM of the inventive concept from PM to the contents of the patent specification. The default position then must be that WB was the sole inventor of the subject matter of the present application.
I conclude that WB was the sole inventor of the alleged invention the subject of the present application.
Potential Public Availability
Irrespective of who the inventor was, there may be a hindrance in obtaining patent protection for the subject matter of the patent application. The filing date and earliest priority date of the present application is 15 December 2011. This is more than a decade after the alleged invention was first conceived by PM and then discussed by JM with Royal Ideas and Inventions. The prototype was stored in the parents’ garage. Whilst a garage may be private property and somewhat removed from the public generally, it is easily conceivable that other family members or friends may have accessed the garage and its contents, including the terminator stop prototype, over more than the decade preceding the filing of the patent application. Such a length of time would appear to be a long time to keep a device secret, especially in the absence of agreements of confidentiality with personnel that may have had access to the device.
I accept the alleged invention is more refined than PM’s original prototype. On the other hand, the alleged invention had been substantially arrived at from PM’s side (JM-2 at [1] and WB-3 at [6]-[8]) by the time JM returned to Royal Ideas and Inventions in April 2000. While there is no evidence in these proceedings on the point, I am prepared to accept that JM’s discussions with Royal Ideas and Inventions were, more likely than not, to have been in confidence. In any case, if any device relating to the alleged invention beyond the prototype, or documents or drawings in respect thereto, had been similarly stored in the garage, or otherwise loosely stored, over more than the decade before the priority date, then there is the possibility that the alleged invention may be deemed to have been made publically available before the priority date.
The same may apply from WB’s side. While the evidence indicates WB took some steps in having discussions in confidence with some parties, for example with MW (MW-1 at [6]), I would note that WB also conceived the alleged invention well before the priority date of the present application. In WB’s case, the time period was nearly three years, from at least February or March 2009 (MW-1 at [3]).
A conclusion on the public availability of the alleged invention is not required in the present proceedings. Nonetheless the parties should be aware that the above circumstances may affect the novelty and inventiveness of the alleged invention.
Entitlement to the Alleged Invention
Earlier I mentioned the absence of evidence in these proceedings of any written agreements amongst the parties. For example, in the case of potential patent rights, there are no arrangements in writing before me in evidence as to the entitlement of any alleged invention(s) made by any of PM, JM or WB to either of the parties in these proceedings. The closest evidence before me in this respect are statements from JM (JM-1 at [4] and [5]) and from WB (WB-1 at [10] and [11]) that MainRain was jointly set up by JM and WB to bring new plumbing products to the Australian market and that patent protection would be sought and/or exploited. This could suggest a fiduciary relationship existed between JM, WB and MainRain that would give rise to entitlement to MainRain for all new plumbing products brought to bear by JM or WB.
Around July 2010, JM and WB met to discuss the provision of new plumbing products to the market. The formation of a partnership was also subsequently discussed for commercially exploiting the new products (WB-1 at [8] and [9]). As a result MainRain was registered as a company on 16 November 2010. The first item brought to the market under MainRain was the changeover valve. Innovation Patent 2011100154, now ceased, covered this device (WB-1 at [12] and JM-1 at [4] and [5]).
WB indicated in evidence that the agreement was that MainRain would be established with JM and WB (or their respective companies) each having a 50% interest with MainRain owning all patent rights (WB-1 at [10]). On the other hand, in respect to the terminator stop, JM and CM suggested a different arrangement had been agreed. Since they asserted that PM was the inventor, they stated that Trentman and MainRain would each have equal share (JM-1 at [7] and CM-1 at [3]). These paragraphs though discuss equal share in respect to profits, not the distribution of patent rights. In respect to patent rights, CM, who was not a direct participant in the business dealings of MainRain or the terminator stop, was nonetheless the most specific person from Trentman’s side. In mentioning patent ownership in CM-1 at [5], she asserted that Trentman and MainRain owned 50% each of the terminator stop, and since Trentman also owned 50% of MainRain, then Trentman’s share in respect to the terminator stop was 75%. On the other hand, I have found that PM was not the inventor in this case. Rather, WB was the sole inventor.
In a case that discussed the fiduciary duties of a director of a company, Rein J in Breakout Barrier Release Systems Pty Ltd v Breakout Barrier Release Systems Australasia Pty Ltd, [2013] NSWSC 1815, considered whether an invention made by a director fell within the ambit of a patent licensing agreement between the parties, and whether the director’s attempt to obtain a patent for that invention in his own right involved a breach of his fiduciary duty. Rein J stated at [84] that there was a sufficient proximity between another device covered by the agreement and the director’s invention to require the director to have brought the inventive concept to the company and give the company the opportunity to exploit it.
While there are no written agreements on patent entitlement or licensing in evidence in the present case, it seems the principles from the Breakout case may be applied in this case. The evidence clearly shows the terminator stop was a MainRain product as it was imported into Australia for MainRain. Moreover, contrary to the situation in the Breakout case where there was a breach of fiduciary duty by the director, WB as director of MainRain appears to have met his fiduciary obligations to MainRain at all times in respect to the patent application. He has stated consistently in evidence that MainRain owns the patent rights. Furthermore, from WB’s side, the application was filed and has remained in the name of MainRain throughout.
I conclude the rights of WB in the present case have passed to MainRain. MainRain is therefore entitled to the alleged invention the subject of the present application.
Conclusion
I determine that Mr William Breen was the sole inventor of the subject matter that comprises application 2011254059. I also determine that application should proceed solely in the name of MainRain.
Both parties appeared to be of the view that there was an irreconcilable breakdown of the business relationships involving MainRain, noting that MainRain is 50% owned by Trentman. This may present an obstacle for MainRain to further prosecute the present patent application. MainRain’s submissions thus requested that the present application proceed solely in the name of Sunny Daze. This would appear to be unattainable as it would seemingly require an assignment mechanism from MainRain across to Sunny Daze. It would also appear that Section 32 is unable to assist in this regard. Section 32 relates to disputes between joint applicants, not to disputes between joint owners of a single applicant. There may be a remedy in WB’s directorship of MainRain. If it is correct that WB is the sole director of MainRain then he may have sufficient control to further progress the patent application.
In any case, I refer the parties back to my earlier comments about the circumstances in this case that may affect the novelty and inventiveness of the alleged invention.
Costs
Both parties submitted that costs should follow the event. I see no reason to depart from this usual practice.
I award costs in accordance with Schedule 8 against Trentman.
M. G. Kraefft
Delegate of the Commissioner of Patents