NOEL CARROLL and DAVID CHRISTOPHER HARPER

[1983] APO 47

IN THE MATTER of the Patents Act 1952

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IN THE MATTER of Patent Applications No. 12421/83 and No. PF5180 in the name of NOEL CARROLL and DAVID CHRISTOPHER HARPER

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IN THE MATTER of Determination under Section 63

DECISION OF AN ASSISTANT COMMISSIONER OF PATENTS
     In the period from 4 March 1982 to 10 August 1982 six applications, each accompanied by a provisional specification, were lodged in the name of Noel Carroll and David Christopher Harper by their patent attorneys, Davies & Collison, Melbourne.  One of these is application No. PF5180, the others were cognated by a complete specification lodged on 3 March 1983, also in the name of Mr Carroll and Mr Harper, and treated as application No. 12421/83.
     On 26 April 1983, Davies & Collison on behalf of Noel Carroll lodged a letter in the Patent Office requesting that the Commissioner determine, under the provisions of Section 63 of the Patents Act, the manner in which the above applications are to proceed.  It was stated in the letter that "in consequence of cessation at least by 15 February 1983 of arrangements as to joint ownership of the inventions the subject of the applications, and of the applications themselves, Noel Carroll then became solely entitled to the benefit of the said inventions and applications, and the applications are to proceed solely in the name of Noel Carroll".  An affidavit by Noel Carroll and dated 18 April 1983 accompanied the letter.
     A request for determination under Section 63 (Form 15), as prescribed

by Regulation 24(1), was lodged on 31 May 1983.  Copies of the request, the letter by Davies & Collison and the affidavit were served on Mr Harper in United Kingdom on 18 July 1983, thus satisfying the requirements of Regulation 24(2)(a).  The request was advertized in the Official Journal on 25 August 1983 as prescribed by Regulation 24(4).  Consequently, the period within which a person interested in the application could give a notice if he desires to be heard, as prescribed under Regulation  24(5), expired on 6 October 1983.
         Since no notice was received in the Office within the above period, and because Mr Carroll wanted to finalize the matter as soon as possible in order to secure the earliest priority date to his related applications in other countries, the matter was set down for hearing in Canberra on 28 October 1983, the earliest practical date.
         At the hearing Noel Carroll was represented by Mr Keith Leslie, a patent attorney of Davies & Collison, Melbourne and Mr G. Browne, Mr Carroll's solicitor.
         At the outset of the hearing Mr Browne pointed out that the Patents Act and Regulations lack procedural requirements relating to a hearing of this type.  However, he submitted that his client, Mr Carroll, had satisfied all the requirements having complied with Section 63 and Regulations 24 and that it is proper to proceed with this hearing based on the material available.
         He made an observation, before discussing the Mr Carroll's affidavit in detail, that in common law, if there is a hearing, both parties should be given the opportunity to be heard.  In the present case Mr Harper has been served with a copy of the request (Form 15), a copy of the affidavit sworn by Mr Carroll, and a copy of the letter to the Office by Davies & Collison.  These documents, he submitted, clearly show that Mr Carroll contests Mr Harper's right to the applications.  Mr Harper could have made submissions in support of his claim to the application but he did not do so.  Mr Browne further submitted that Mr Harper, by not making any submissions in support of his claim to the applications to the Office in the face of Mr Carroll's request and the sworn affidavit, tacitly admitted a lack of case in his favour as a co‑applicant.  He pointed out that, as shown in the affidavit, Mr Carroll is the inventor of the invention which is the subject of the applications and that Mr Harper played no part as the inventor.  The complete specification in support of application No. 12421/83 supports this by naming Mr Carroll as the only inventor, although no declaration in support of the application had been lodged to further confirm this.
         Having attempted to establish that Mr Carroll is the inventor, thus having the inherent right to the application, Mr Browne relied upon the remainder of the affidavit and the evidence attached thereto to show that an agreement had existed between Mr Harper and Mr Carroll by which Mr Harper was entitled to be the co‑applicant only so long as he honoured his part of the agreement.  Mr Browne tried to show that Mr Harper had not met his part of the agreement.
         A close examination of the affidavit and the evidence revealed a number of important omissions and apparent inconsistencies which were not resolved at the hearing.  In fact it surfaced at the hearing that, for the allegedly most serious breach of the agreement by Mr Harper, there was no evidence at all.
         Since all the alleged relevant facts and evidence were not available to me, Mr Browne requested an adjournment of the hearing.  I decided that the hearing was to be adjourned to 25 November 1983, that Mr Harper was to be informed of the adjournment, and that any new evidence was to be sent to Mr Harper by 8 November 1983 to allow him time to respond to that evidence.
         On 4 November 1983 a copy of an additional affidavit by Noel Carroll was sent to Mr Harper by recorded delivery mail posted from London.  It was accompanied by a letter from Mr Browne informing him that the hearing had been adjourned to 25 November 1983 and that Mr Harper was entitled to lodge an affidavit in reply by 17 November 1983 and attend the hearing.  No reply has been received from Mr Harper.

Mr Carroll was represented at the hearing on 25 November 1983 by Mr G. Browne and Mr A. Duncan of Davies & Collison, patent attorney, Melbourne.
         The essence of this dispute is that Mr Carroll entered into an agreement with Mr Harper which, Mr Carroll alleges, Mr Harper has not honoured.  Part of this agreement was that Mr Carroll would allow Mr Harper to be joined as a co‑applicant for the present invention.  Mr Carroll now wishes the application to proceed only in his name because Mr Harper has not honoured his part of the agreement.
         It appears from the evidence supplied that prior to any agreement being made, Mr Carroll and his companies were involved in marketing automatic door opening equipment and Mr Harper and his companies were involved in marketing hydrocyclones and pollution control equipment.  It had occurred to Mr Harper and Mr Carroll that joining forces would be mutually beneficial.
         According to the two affidavits by Mr Carroll and their supportive documented evidence and as explained by Mr Browne at the hearing, Mr Harper and Mr Carroll entered into an oral agreement in early 1981.
         According to the agreement Mr Harper and Mr Carroll would enter into a joint venture for the purpose of marketing world wide the invention called "Hydrocyclone" and other anti‑pollution equipment and any improvements thereto.  This invention was owned by the British Technology Group (formerly called the National Research and Development Corporation), and believed by Mr Carroll to be available under licence to Mr Harper and/or his company Harrier Marine Limited.
         Under the terms of the agreement:

‑Mr Carroll was to buy and Mr Harper was to allot to Mr Carroll 50% of the issued shares in another company owned by Mr Harper called Harrier Limited which was to carry out the marketing of the invention.

‑Mr Carroll was to pay $14000 to Mr Harper as a premium to share equally in the sub‑licence to market the invention which at the time of the agreement was not firmly granted to the Harrier Marine Limited.

‑Mr Harper and Mr Carroll would contribute equally to the Harrier Limited such funds as required by the company for the venture.

‑Mr Harper would purchase half of the issued share capital in Mr Carroll's company B.W.N. Cyclones Pty. Ltd. (which changed its name to Harrier B.W.N. Australia Pty. Ltd.) which company was to carry out marketing of anti‑pollution equipment. 

‑Mr Carroll would include Mr Harper as a co‑applicant of the patent applications in dispute.

Thus as a result of the agreement, Mr Harper and Mr Carroll and their respective companies would participate in the venture on an equal partnership basis.
         It is of interest to note that application 12421/83 under consideration is for an improvement in the hydrocyclone, the invention at the centre of the agreement, and application PF 5180 is for an oil recovery system.
         In addition to the joining of Mr Harper as a co‑applicant in 6 patent applications, the evidence used to show that Mr Carroll had honoured his part of the agreement was:

‑a receipt for money sent to Mr Harper on 5 April 1981, for the sum $A10152 equivalent to 6000 pounds sterling which, so Mr Carroll alleges, was to be appropriated toward the joint venture (500 pounds for purchase of 500 shares in the Harrier Limited and 4500 pounds towards the premium for sub‑licence and 1000 pounds for other purposes).

‑Two telexes addressed to Mr Harper sent by Mr Carroll indicating that 25000 pounds sterling was transmitted to Harrier Limited's bank account in January 1982.  Mr Carroll explains that out of this 25000 pounds, 2500 pounds was nominated toward the premium for the sub‑licence, 4500 pounds for 4500 shares in the Harrier Limited, and 18000 pounds, the balance, for the funding of the marketing of the said invention.

‑Two certificates of share ownership in the Harrier Limited by Mr Carroll, one for 500 and the other for 4500 shares.  Both certificates were issued by Mr Harper.

Evidence purportedly showing that Mr Harper had failed to honour his part of the agreement was in the form of numerous letters addressed to Mr Harper and Harrier Limited sent by Mr Carroll and his solicitors in Australia and in United Kingdom.
         These letters illustrate that:‑

(a) Mr Harper had failed to pay for his shares in B.W.N. Cyclone Ltd. (Harrier B.W.N. Australia Pty. Ltd.) as specified in the agreement. 

(b)The money Mr Harper had received from Mr Carroll for purchase of the shares in the Harrier Limited apparently were not used for the agreed purposes, since the shares to Mr Carroll, evidenced by the share certificates, were not entered in the Harrier Limited company's register by Mr Harper who had issued the shares to Mr Carroll.  A letter requesting an explanation of these circumstances was sent to Harrier Limited by Mr Carroll's solicitors in April 1983, however no response was received by 28 October 1983.

Although no documentary evidence is supplied, Mr Carroll testifies in his second affidavit that he had been informed by the British Technology Group that Mr Harper had "persistently failed to supply information requested by the BTG Group and that unless and until he did supply that information the sub‑licence would be withheld".  Mr Browne said at the hearing that the licence had still not been granted.
         I am concious of the fact that Mr Harper has not been represented in this matter.  However, I cannot ignore that the necessary documents were served on Mr Harper on 18 April 1983 and again, on 4 November 1983, and that a letter of explanation and the second affidavit were posted to Mr Harper by registered mail.  Therefore I cannot assume that Mr Harper has not been aware of these proceedings and was not aware how to respond to these if he so desired.  Furthemore the fact that Mr Carrolls' claims were made under oath must also be taken into account.
         After weighing the evidence that has been lodged I am satisfied that an agreement existed substantially in the form as presented by Mr Browne at the hearing and in Mr Carroll's affidavits, and that in pursuance of this agreement Mr Carroll had made Mr Harper a co‑applicant in the six patent applications.  I am also satisfied that while Mr Carroll had honoured his part of the agreement, Mr Harper has failed to pay for his shares in Harrier B.W.N. Australia Pty. Ltd., had not entered Mr Carroll's name in Harrier Limited's share register, and had not secured rights from the British Technology Group to licence the hydrocyclone invention.  In consequence I believe that any agreement between Mr Carroll and Mr Harper has been broken and that Mr Harper is not entitled to continue to be joined as a co‑applicant.  Therefore I direct that, under section 63(2), these applications proceed in the name of Noel Carroll only.

(G.J. BAKER)
Assistant Commissioner