Nikki Gadd v MSI WA Pty Ltd
[2024] APO 19
•20 May 2024
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Nikki Gadd v MSI (WA) Pty Ltd. [2024] APO 19
Patent Application: 2016259363
Title:Formation Stabilisation Apparatus
Patent Applicant: MSI (WA) Pty Ltd (now deregistered)
Requestor: Nikki Gadd
Delegate: Keith Wagg
Decision Date: 20 May 2024
Hearing Date: Written submissions filed on 26 September 2023
Catchwords: PATENTS — s 36 — entitlement where the Applicant has deregistered — evidence from named inventors — no evidence provided by the Applicant — inventorship established — MSI (WA) Pty Ltd was listed as the applicant under an incorrect assumption — Nikki Gadd is the inventor – declaration that Nikki Gadd is the eligible person
Representation: Patent attorney for the Requestors: Mann IP
Patent attorney for the Applicant: unrepresented, formerly represented by Wrays IP
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2016259363
Title:Formation Stabilisation Apparatus
Patent Applicant: MSI (WA) Pty Ltd (now deregistered)
Date of Decision: 20 May 2024
DECISION
The Requestors are successful. I declare that Nikki Gadd is the eligible person for patent application number 2016259363. I also declare that the applicant on record is not an eligible person for patent application 2016259363.
If the Requestor files a complete specification under s 36(4) the priority will be determined by the regulations.
Given that the previous applicant MSI (WA) Pty Ltd is now deregistered, I make no award of costs.
REASONS FOR DECISION
Background
Patent application 2016259363 (the application) was filed on 15 November 2016 in the name of MSI (WA) Pty Ltd (the Applicant). The application was based on provisional application 2015904718 filed on 16 November 2015 in the name of MSI (WA) Pty Ltd (MSI). The sole director and shareholder of MSI (WA) Pty Ltd was Mrs Anna Louise Gadd.[1]
[1] See NG-1.
The patent request on the provisional application lists Roger Wayne Moore and Trever Scott Land as the inventors. The patent request for the application lists both Mr Moore and Mr Land as well as Nikki Gadd as inventors.
The examination request for the application was due on 11 October 2020, along with the renewal fees. On 26 May 2022 the Commissioner received a request for examination, and a change of agent to Mann IP (the agents for the Requestor). Mann IP also filed a request for an extension of time under s 223(2)(a). On 21 July 2022 Mann IP filed a request under s 36 for the application proceed in the name of Nikki Gadd along with a further request under s 223(2)(a).
In the request Mann IP stated that MSI (WA) Pty Ltd was deregistered on 28 October 2020 and provided a copy of the Company Extract from ASIC of 5 July 2022 which stated an application for voluntary deregistration had been filed on 25 August 2020. Whilst no change of applicant had been recorded by the Commissioner, such that MSI (WA) Pty Ltd remained the applicant in the Commissioner’s records, I note that when a company is deregistered in this manner, ASIC becomes the nominated person by virtue of s 601AD of the Corporations Act. Consequently, correspondence in relation to the s 36 request was also sent to ASIC.
On 26 October 2022 a delegate of the Commissioner wrote to the listed address for MSI (WA) Pty Ltd as well as Mann IP who had made the requests on behalf of Nikki Gadd. The correspondence was also sent to MSI (WA) Pty Ltd’s first listed agent, Wrays. The delegate requested further information about the circumstances, particularly in relation to how Mann IP was appearing to be acting for both the Applicant and the Requestor.
A response from the Requestor was received on 4 November 2022. A delegate of the Commissioner also spoke to Anna Gadd on 17 November 2022.
On 8 December 2022 a delegate of the Commissioner wrote to all concerned informing them that ASIC would proceed as the applicant and invited ASIC for comment on whether or not they wished to defend their entitlement, though I note that ultimately the delegate did not direct that the application proceed in the name of ASIC. Each party was provided with an opportunity to respond. It is noted that Anna Louise Gadd did not respond to the letter, and messages were left on her phone on 17 January 2023 and the delegate attempted, unsuccessfully, to reach her by phone again on 20 January 2023.
ASIC responded to the delegates inquiry with the letter of 15 February 2023 stating that:
“I confirm the company was deregistered on 28 October 2020. Ordinarily as a result of deregistration: a) all property the company held on trust at deregistration belongs to the Commonwealth b) all non-trust property the company owned at deregistration belongs to ASIC c) ASIC is the only party legally able to deal with the company's property.”
In response to the inquiry about the s 36 request ASIC stated:
“I confirm that ASIC/the Cth will not take any steps to defend or renew the expired patent application and will not otherwise take any steps to assert any rights the company may have in relation to the lapsed patent application, nor contest/be heard on the ‘entitlement dispute application’ under s36. The company will need to be reinstated in order for it to do so.”[2]
[2] Letter dated 15 February 2023.
With ASIC confirming that it will not defend the entitlement the delegate requested further information from the Requestor with a letter of 14 March 2023. The information requested related to the identity of the inventive concept, who came up with it and when, then determination of whether any contractual or fiduciary relationships give rights to the invention.
Evidence
Evidence was filed as part of the s 223 request and also as part of the s 36 request with the Application to Commissioner for Declaration of an Eligible Person on 21 July 2022. This evidence filed as part of the s 36 request included declarations from the inventors and are outlined below:
Declarant Their role Date Reference Exhibit Nikki Gadd Requestor and Inventor 18 July 2022 Gadd #1 NG-1 Roger Moore Inventor 18 July 2022 Moore Trevor Land Inventor 18 July 2022 Land
On 20 July 2022 Nikki Gadd made a further declaration outlining the events in relation to the s 223 request. That declaration is herein referred to as Gadd #2, is also exhibited as NG-1 (which is the same ASIC extract filed as NG-1 with the 18 July 2022 declaration). In response to the letter of 14 March 2023 from the Commissioner, the Requestor filed a further declaration by Nikki Gadd as their evidence in support. This declaration is dated 5 May 2023 and will herein be referred to as Gadd #3.
Onus of Proof
As noted in Woodside Energy Limited v Richard John Moore[3] the Requestor bears the onus to prove their case on entitlement on the balance of probabilities. However the evidentiary burden may shift under some circumstances, especially when knowledge of relevant facts lie particularly with one party or the other; see Dunlop Holdings Limited's Application[4] (“Dunlop Holdings”).
[3] [2018] APO 82 at [37].
[4] [1979] RPC 523 at 542 to 544.
The Law on Entitlement
Section 36(1) of the Act reads as follows:
“If:
(a)a patent application has been made and, in the case of a complete application, the patent has not been granted; and
(b)an application for a declaration by the Commissioner is made by one or more persons (the section 36 applicants) in accordance with the regulations; and
(c)the Commissioner is satisfied on the balance of probabilities, in relation to an invention disclosed in the specification filed in relation to the application for the patent:
(i)that the nominated person is not an eligible person, but that the section 36 applicants are eligible persons; or
(ii)that the nominated person is an eligible person, but that the section 36 applicants are also eligible persons;
the Commissioner may declare in writing that the persons who the Commissioner is satisfied are eligible persons are eligible persons in relation to the invention as so disclosed.”
The Dictionary at Schedule 1 of the Act defines an eligible person as follows:
“eligible person, in relation to an invention, means a person to whom a patent for the invention may be granted under section 15.”
Section 15(1) of the Act reads as follows:
“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).”
That is, a patent may be granted to the inventor of an invention or someone who derives title to the invention from the inventor. Such a person is also an eligible person for the purposes of s36(1).
The law on inventorship/entitlement has been recently considered in University of Western Australia v Gray[5] (“UWA”) and Polwood Pty Ltd v Foxworth Pty Ltd[6] (“Polwood”). In particular, the Court in UWA at [253] noted with approval the following steps used by the primary judge for determining who is an eligible person:
i.identify the “inventive concept” of the invention as defined in the claims.
ii.determine inventorship including the person responsible for the inventive concept and the time of conception as distinct from its verification and reduction into practice.
iii.determine whether any contractual or fiduciary relationships give rise to proprietary rights in the invention.
[5] [2009] FCAFC 116.
[6] [2008] FCAFC 9.
The Full Court in UWA also found no fault in the reasoning of French J in his discussion of overseas authorities as quoted below in the first instance decision at [1426] of University of Western Australia v Gray (No 20)[7] (“Gray”).
“The inventive concept marks a boundary between invention and verification. An example arose in 1994 and 2002 in decisions reported in both the United States and Canada in relation to the use of the drug AZT to treat AIDS. Glaxo/Wellcome had identified a new use for an old compound in conceiving the idea that AZT would work in humans against the HIV retro virus. It used external scientists employed by the National Institutes of Health (NIH) to perform critical blind testing on the AZT and on other compounds (none of which were identified). The NIH scientists found that the AZT did inhibit HIV replication and so advised. The Glaxo/Wellcome patent was considered in the US Court of Appeals in Burroughs Wellcome Co v Barr Laboratories Inc (1994) 40 F 3d 1223. The argument had been raised there that the patent was invalid because of the wrongful exclusion as inventors of the NIH scientists. The argument focussed on when the inventors conceived the invention. Burroughs Wellcome said it was before they learnt the results of the NIH tests. The respondents argued that the NIH confirmation of the inventions operability from the NIH tests was an essential part of the inventive process. The Court of Appeals held that the NIH scientists were not joint inventors. It set out the following principles as established by US appellate courts:
1. Conception is the touchstone of inventorship, the completion of the mental part of inventions.
2. Conception is the “formation in the mind of the inventor of a definite and permanent idea of the complete and operative invention as it is hereafter to be applied in practice”. It is complete only when the idea is so clearly defined in the inventor’s mind that only ordinary skill would be necessary to reduce the invention to practice without extensive research or experimentation.
3. An inventor need not know that the invention will work for conception to be complete. The inventor need only show that he or she had the idea. The discovery that an invention actually works is part of its reduction to practice.
4. It is not the law that the inventor’s definite and permanent idea must include a reasonable expectation that the invention will work for its intended purpose even when it deals with uncertain or experimental disciplines where the inventor cannot reasonably believe that an idea will be operable until some result supports that conclusion.The propositions set out in Burroughs Wellcome (1994) 40 F 3 1223 define “invention” by reference to completion in concept which distinguishes the invention from its verification and reduction to practice.”
[7] [2008] FCA 498.
Polwood provides guidance with regard to determining the inventive concept at [60]:
“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.”
As far as contribution to the invention is concerned, a distinction is made between conception of the inventive concept and its mere reduction into practice. In this regard the Full Court in UWA commented in relation to Polwood as follows:
“The Full Court pointed out ... that the role of joint inventors is not necessarily equal and is qualitative rather than quantitative. The contributions may be joint or independent. The issue is whether a contribution is to the invention, as determined from the patent specification, including, but not limited to, the claims. In some cases, the reduction of a concept to practice or to a working apparatus may be part of the invention, in other cases it may not be.
Polwood does not change Australian law in respect of the identification of inventorship. The law remains that a putative inventor or putative joint inventor must have made a material contribution to the invention. What the case illustrates is that the reduction to practice of an inventive concept may or may not require an invention or inventive step. If not, reduction to practice does not demonstrate inventorship.”[8]
[8] UWA at [247] and [248].
Following the principles outlined in UWA, to decide the s36 matters, I need to first identify the inventive concept for the application in question and then determine the inventorship by determining who is responsible for the inventive concept. Finally I need to determine whether any contractual or fiduciary relationships give rise to proprietary rights in the invention. I will now consider each of these below, starting with the inventive concept for the application.
The Inventive Concept for the Application
Both the application and provisional outline a stabilisation apparatus for supporting and stabilising rock formations for use in structures such as the roofs and walls of mines. The prior art is said to include a rod which goes into the wall via pipe which is tapered at the end. There is also a slot at the end of the pipe inside the wall and a retaining plate on the outside. When the rod is inserted into to the pipe the rod exerts a radial pressure against the inner surface of the rock formation over the full length of the rod. According to the application, the radial pressure around the borehole in the rock formation may not be sufficient to stabilise the apparatus and this kind of apparatus can fail.[9]
[9] Requestors submissions at 14 as well as the Application at [0001]-[0002], [0006], [0009].
From my reading of the specification and the Requestor’s submissions the inventive concept is a similar apparatus but allows for cementing material to be injected into the borehole. This is said to be achieved by using a hollow rod. A schematic side view of the stabilisation apparatus is shown in figure 2 and this is provided below.
The rod (12) which facilitates delivery of the cement deep into the bore hole can be capped with a threaded cap (14) in the wall inside the borehole on the distal end of the rod.
A perspective view of the apparatus in the wall with the retaining piece is shown below:
The rod’s proximal end (20) also has retention means such as a retention plate (42) for bearing against the external surface of the rock face.[10]
[10] Requestors submissions at 15-16; the Application at [0022]-[0028]; [0064] Figure 2; [0058]-[0068]; Figure 5.
The current invention has not been examined, however, given that the inventorship is not disputed in this request, I consider that the adaptations for allowing the cementing material to be pumped into the borehole, e.g. through the rod allowing it to be delivered deep into the borehole, as well as allowing it to be capped, is the inventive concept.
Who was responsible for the inventive concept disclosed in the application? And when were the features of the inventive concept conceived?
The second step of the analysis according to UWA is to determine inventorship including the person responsible for the inventive concept and the time of conception as distinct from its verification and reduction into practice. The inventors listed on the patent request for the current application are Roger Moore, Trevor Scott and Nikki Gadd.
Both Roger Moore and Trevor Scott stated that when the application was prepared, they had been informed that Nikki Gadd was a director of the company (i.e. MSI).[11] They were later informed that Nikki Gadd was never in fact a director/shareholder of the company and that the application should not have been filed in that company’s name.[12]
[11] Land at [5]; Moore at [5].
[12] Land at [6]; Moore at [6].
There was no dispute between the inventors that Nikki Gadd was the sole person responsible for the inventive concept disclosed. With both Roger Moore and Trevor Land stating:
“The Invention was invented solely by Nikki Gadd. My name was included in the list of inventors when the Application was filed in error.”[13]
[13] Moore at [7]; Land at [7].
Nikki Gadd stated that he had extensive experience in the field:
“I have procured, tested and installed many different types of rock bolts throughout my career and I am familiar with their various advantages and disadvantages.”[14]
[14] Gadd #3 at [7].
Nikki Gadd then stated more specifically that when he was working in Brazil in February 2015 some of the rock bolts were anchored into boreholes using cement and that there were difficulties applying the cement.[15]
[15] Gadd #3 at [8].
Nikki Gadd also stated that it was in February 2015 that he came up with the idea for a rock bolt featuring a rod with an internal passage and slotted cap for delivering cement deep into a borehole.[16] He also created a sketch of the rock bolt that month with he called his “bolt design”.[17]
[16] Gadd #3 at [9].
[17] Ibid.
The “bolt design” was then put into practice in his own personal time and with his own resources while in Brazil.[18]
[18] Gadd #3 at [10].
The bolt design, which has the internal passage for delivery of cement and slotted cap, which I consider part of the inventive concept, was conceived by Nikki Gadd in Brazil in early 2015. Although this is not corroborated, the fact that both Roger Moore and Trevor Land, the other named inventors, have provided declarations that Nikki Gadd is the sole inventor is reassuring. Thus I am satisfied that Nikki Gadd is the inventor who came up with the inventive concept.
Were the rights to IP transferred to MSI (WA) Pty Ltd?
The question of whether the Requestor had any contractual or fiduciary relationship with MSI in this case can only be answered based on the declarations of the named inventors and ASIC records.
MSI was first registered with ASIC on 9 July 2009 in Western Australia as a propriety company limited by shares.[19] Anna Louise Gadd was the only ever listed director and shareholder before it was deregistered on 28 October 2020.[20]
[19] NG-1; ASIC Current & Historical Company Extract for MSI (WA) PTY LTD, ACN: 138200129.
[20] Ibid.
Nikki Gadd stated that he had asked his ex-wife, Anna Louise Gadd, to incorporate a company in 2009.[21] The company was needed so he could use it to deal with business partners, suppliers, customers, and investors.[22] He stated that he had specifically asked his ex-wife to handle the company application and process as he was busy at the time. He stated that she agreed to do this.[23] I note that the conception of the invention did not occur until 2015, which is 6 years after MSI was first registered. Therefore it does not follow that MSI was registered for the sole purpose of being a vehicle for the invention.
[21] Gadd #3 at [21].
[22] Gadd #3 at [20]
[23] Gadd #3 at [21].
The Requestor’s attorney submitted that Nikki Gadd did not conceive the inventive concept as an agent of MSI or in the pursuance of any contractual or fiduciary duty owed to MSI.
A Delegate of the Commissioner sent correspondence to Anna Gadd’s address and made several phone calls leaving messages on voice mail. Although evidence from Anna Gadd in this matter would have been of great significance, even if only to corroborate Nikki Gadd’s evidence, it is clear to me that she does not wish to be involved in these proceedings. Furthermore, if Anna Gadd wished to refute any of Nikki Gadd’s evidence she has had the opportunity to.
As outlined above, ASIC is currently the applicant as MSI was deregistered, and they did not wish to be involved either. I therefore must make my decision based solely on the evidence of the inventors.
I accept that the creation of MSI was done to give Nikki Gadd a means of doing business, such as attracting investors. I also find it plausible that Nikki Gadd tasked his wife with creating the company for that purpose.
After the conception of the invention, Nikki Gadd and the other two listed inventors, Roger and Trevor made a Prototype Bolt.[24] They then subsequently agreed to endeavour to manufacture a production ready rock bolt embodying the invention to sell.[25] The only agreement made between them was verbal and not recorded in writing. Nikki Gadd stated that the terms of that agreement were:[26]
[24] Gadd #3 at [13].
[25] Gadd #3 at [13].
[26] Gadd #3 at [13].
·Split Set Mining Systems[27] would manufacture the Commercial Rock Bolts at Split Set Mining Systems’ cost;
·Each of Split Set Mining Systems and I would endeavour to secure sales of the Commercial Rock Bolts to customers worldwide;
·Split Set Mining Systems and I would each receive a share of any profits obtained from any sales;
·Split Set Mining Systems would engage a patent attorney to seek patent protection for the Invention, in various countries to be decided, at Split Set Mining Systems’ cost.
[27] Noting that Split Set Mining Systems is a separate company to MSI with this agreement to commercialise the invention.
This agreement led to Nikki Gadd, Roger Moore and Trevor Land instructing the patent attorney firm, Wrays, to prepare and file the provisional patent application.
Nikki Gadd suggested they use MSI as the applicant which he assumed he was a director of.[28] This assumption was corroborated by both Trevor Land and Roger Moore when the Application was prepared with both Trevor Land and Roger Moore stating that Nikki Gadd had told them he was a director/shareholder.[29] I therefore accept that Nikki Gadd was not aware that Anna Gadd was the sole director/shareholder of MSI when the patent application was prepared and filed. It is clear that this incorrect assumption led to the patent application proceeding in the name of MSI.
[28] Gadd #3 at [23].
[29] Moore at [5]; Land at [5].
Nikki Gadd stated that there was no formal, written, contracts between himself and MSI regarding transfer of the invention.[30] Furthermore, Nikki Gadd was never an employee of MSI[31] and no resources from MSI were used in the conception or development of the invention.[32] In my view, it is also plausible that a husband and wife team did not see the need to draw up written IP contracts for the transfer of IP between them and it is unlikely that Nikki Gadd would have created one anyway given he assumed he was a director. Although the Commissioner does not have power of rescission of contracts,[33] it is necessary for the Commissioner to consider any agreements in place and the effect of those agreements upon eligibility. Fundamentally the assumption which led to the application proceeding in the name of MSI was false and MSI is not an eligible person for the patent application. In other words, it appears clear that Nikki Gadd intended to assign the rights of the invention to MSI on the basis that he had a controlling share in the company. Given the circumstances of the reasonably assumed controlling share as a term of any transfer, it appears clear to me that there is no effective agreement to transfer rights from him as the inventor to the company when he is not a director. Nikki Gadd as inventor remains the eligible person.
[30] Gadd #3 at [24].
[31] Gadd #3 at [24].
[32] Gadd #3 at [10] and [24].
[33] See Vahid Vakiloroaya v HVPS Holdings (Pty) Limited [2022] APO 10.
I therefore consider that, on the balance of probabilities and absence of any refuting evidence, entitlement to the inventive concept invented by Nikki Gadd lies with Nikki Gadd. Consequently, MSI and ASIC are not the eligible person according to s 36(1) of the Act. Nikki Gadd is the eligible person for the patent application.
I declare that the Requestor, Mr Nikki Gadd, is the sole eligible persons under section 36 of the Act and the Applicant of record is not an eligible person.
Determination
The Requestor sought a determination that enables a new complete application to be filed which claims the priority date of the application in suit given that the current application has lapsed.
Section 36(3A) states that the Commissioner may, after making a declaration under ss (1), make any determination the Commissioner thinks fit for enabling the application to proceed in the name of one or more of the declared persons. Such a determination would relate to the current application 2016259363 and not a new complete application.
Section 36(4) states that:
If a complete application is made under section 29 by one or more of the declared person, the priority date of the claims of a patent for the invention granted to the person, or persons, as the case may be, must be determined by the regulations.
The regulation which applies to this section is regulation 3.13. The Requestor can therefore file a complete application under s 36(4) citing this declaration and the priority date will be determined by that regulation.
Conclusion
I declare that the Requestor, Mr Nikki Gadd, is the sole eligible persons under section 36 of the Act and the Applicant of record is not an eligible person.
Costs
Costs usually follow the event. The request has been successful, however, in this case, MSI is deregistered and ASIC did not defend their entitlement. Consequently, I make no award of costs.
Keith Wagg
Delegate of the Commissioner of Patents
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