Re Lazer Safe Pty Ltd and Commissioner of Patents
[2001] AATA 967
•28 November 2001
DECISION AND REASONS FOR DECISION [2001] AATA 967
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W2001/49
GENERAL ADMINISTRATIVE DIVISION )
Re LAZER SAFE PTY LTD
Applicant
And COMMISSIONER OF PATENTS
Respondent
AndTIROPS SAFETY TECHNOLOGY LTD
Party Joined
AndTHOMAS JOHN APPLEYARD
Party Joined
DECISION
Tribunal The Hon C R Wright QC., (Deputy President)
Date28 November 2001
PlacePerth
Decision The decision under review is affirmed.
[Sgd Hon C R Wright QC ]
Deputy President
CATCHWORDS
Patents – cessation of patent due to non-payment of renewal fee – whether jurisdiction to grant extension of time for payment of renewal fee due to error or omission after anniversary date.
Patents Act 1990 – ss143, 223
Patents Regulation –13.6, 22.11
REASONS FOR DECISION
28 November 2001 The Hon C R Wright QC., (Deputy President)
At all relevant times Thomas Appleyard was the holder of Australian Patent No. 667057 ("the patent") relating to an industrial safety mechanism. Tirops Safety Technology Ltd (formerly known as Romcrest Holdings Pty Ltd ) ("Tirops") was the exclusive licensee of the patent. Thomas Appleyard was, and is, a director of Tirops. Pursuant to s143 of the Patents Act 1990 ("the Act') and the Patents Regulations ("the Regulations") clause 13.6(1), a renewal fee of $315 in respect of the patent was due for payment on 16 October 1999. The fee was not paid on that date, nor was it paid within the period of 6 months thereafter ("the grace period") provided for in r 13.6(2). Consequently, pursuant to s143(a) of the Act, the patent ceased on 16 April 2000. On 5 May 2000 Thomas Appleyard applied to the Commissioner of Patents for an extension of time to pay the renewal fee (and penalty fees which had accrued during the grace period). The application was heard by the Commissioner's delegate, Geoffrey Mark Cox who caused the application to be advertised, as prescribed on 19 October 2000. No notice of opposition to the application was filed within the relevant time limit and, upon considering the evidence placed before him, Mr Cox granted the application on 1 December 2000. In his published reasons Mr Cox said (inter alia):
"3. I considered the declarations and formed the view that:
(i)that there was a causative relationship between the errors or omissions and the failure to pay the renewal fee before 16 October 1999;
(ii)there was a full and frank disclosure of the facts (Kimberly-Clark Ltd v Commissioner of Patents & Anor (No. 3) 13 IPR 569); and
(iii)that there was nothing in the evidence to suggest that I should not exercise the discretion under s223 adverse to the patentee."
The present applicant, Lazer Safe Pty Ltd, having sought and obtained leave to proceed out of time, now seeks a review of Mr Cox's decision. Lazer Safe Pty Ltd is a company in which Mr Thomas Appleyard's son, Robert has a substantial interest. It is claimed by Mr Thomas Appleyard and Tirops that Robert and Lazer Safe Pty Ltd have infringed numerous patents (including Patent 667057) and Tirops has instituted discovery proceedings against Lazer Safe Pty Ltd, Lazer Safe Investments Pty Ltd and Omnitronics Pty Ltd in the Supreme Court of Western Australia, with a view to considering the discovered material and then deciding whether or not to sue and claim damages or other relief in respect of such infringements.
Tirops and Mr Thomas Appleyard have both been joined as parties to the present application to review.
In accordance with usual practice the Commissioner of Patents, who has been named as respondent to the application, has not sought to take any active role in the proceedings. Counsel for the parties joined, Mr R J L McCormack, did not seek to challenge the locus standi of the applicant and I think it plain enough that the applicant is a person whose "interests are affected" by the decision under review within the meaning of s27(1) of the Administrative Appeals Tribunal Act 1975, notwithstanding its failure to object to the Commissioner's delegate, Mr Cox, when the application to extend time was before him.
The opposition of Lazer Safe Pty Ltd to the granting of time to Tirops to pay the renewal fee in respect of the patent is based essentially upon the argument that the Commissioner had no power or jurisdiction to give leave for the payment of such fee if the causative error or omission which resulted in failure to pay occurred after the anniversary date. It was contended that any relevant error or omission occurring during the "grace period" would be insufficient to found jurisdiction.
To understand this argument it is necessary to have regard to the pertinent provisions of the Act and Regulations which I set out hereunder:
Section 143 of the Act
"143 Ceasing of Patents
A standard patent ceases if the patentee:(a)does not pay a renewal fee for the patent within the prescribed period; or
(b)does not file the prescribed documents (if any) within the prescribed period."
Regulation 13.6
"13.6 Time for payment of renewal fee for standard patent
(1) For paragraph 143(a) of the Act:
(a)a renewal fee for a standard patent is payable for a relevant anniversary at the last moment of the anniversary; and
(b)the period in which the renewal fee must be paid is the period ending at the last moment of the anniversary.
(1A) (Not relevant) …
(2) However, if the period mentioned in paragraph (1)(b) is not taken to be extended under subregulation (1A), and the renewal fee is paid within 6 months after the end of the relevant anniversary (6 month period):
(a)the period mentioned in paragraph (1)(b) is taken to be extended until the fee is paid; and
(b)the additional fee stated in column 3 of item 7 of Part 2 of Schedule 7 is payable from the first day of the 6 month period.
…
(6) In this regulation, relevant anniversary for a standard patent, means an anniversary:
(a) of the date of the patent; and
(b) that is mentioned in column 2 of item 7 of Part 2 of Schedule 7."Section 223 of the Act:
…
(2) Where, because of:
(a)an error or omission by the person concerned or by his or her agent or attorney; or
(b)circumstances beyond the control of the person concerned;
a relevant act that is required to be done within a certain time is not, or cannot be, done within that time, the Commissioner may, on application made by the person concerned in accordance with the regulations, extend the time for doing the act.
(3) The time allowed for doing a relevant act may be extended, whether before or after that time has expired.
…
(11) In this Section:
"relevant act' means an action (other than a prescribed action) in relation to a patent, a patent application, or any proceedings under this Act (other than court proceedings), and includes the making of a Convention application within the time allowed for making such applications." (my emphasis)Regulation 22.11 Extension of Time
"…
(3) For the purposes of the definition of "relevant act" in subsection 223(11) of the Act, each of the following actions is prescribed:
(a) …
(b)paying a fee in the 6 month period stated in subregulation 13.3(1A) or 13.6(2)."
Counsel for the applicant drew my attention to the Patents Amendment Regulations 2001 (No. 1) dated 16 May 2001 ("the amending Regulations") which came into effect on the commencement of the Patents Amendment (Innovation Patents) Act 2000 ("the amending Act"). The amending Act came into effect on 24 May 2001 (i.e. on a date after Mr Cox's decision as delegate of the Commissioner).
The amending Regulations, which also commenced on that date, substituted a new regulation 22.11(3) for that which has been set forth above. The relevant effect of the new regulation was to repeal regulation 22.11(3)(b).
It was contended by Mr Cuerden (and not disputed by Mr McCormack) that this change in the law did not accrue to the benefit of the respondent or the parties joined because, in reviewing the decision of the Commissioner's delegate I am obliged to exercise the powers and discretions vested in him at the time of making his determination and cannot call in aid for the benefit of the defaulting patentee any changes to the substantive law occurring thereafter. In my opinion this contention is correct. (see Re Hare and Commissioner for Superannuation 1978, 2 ALD 233 at 236).
Within these limits I am, of course, re-hearing the matter and will form my own conclusion as to matters of fact and inferences to be drawn after assessing the evidentiary material placed before me, which obviously differed in material respects from that presented to the delegate.
Submissions were made by Mr McCormack that if jurisdiction is established and I am called on to exercise my discretion, that discretion is "unconfined". There are however some guiding principles to be found in decided cases, which include the following:
"(a)the statutory provision to extend time is beneficial in nature, and should be applied beneficially; (Re Sanyo Electric Co Ltd and Commissioner of Patents (1996) 36 APR 470 at 480)
(b)while the applicant has the burden of placing before the Tribunal the circumstances which it claims will justify the grant of an extension of time, that does not amount to a burden of proof and it is not appropriate that it should be so described; (Re Sanyo supra at 479)
(c)(i) for an extension to be granted, there must have been "an obvious error or omission". Although there is no clear or complete meaning for the words "error or omission", (Kimberley-Clark v Commissioner of Patents & Anor (No.3) 13 IPR 56 (Federal Court of Australia) at 583-4) a distinction should be drawn between:
(A)errors or omissions affecting the carrying out of the parties' intentions; and
(B)the consequences of deliberate decision; (Total Peripherals Pty Ltd v IBM & Commissioner of Patents, AAT No. 13336 (1998) AATA 784 (30 September 1998)
(ii)an error or omission involves some type of flawed mental function in the carrying out of the parties' intentions and does not have to be "accidental or due to an inadvertent source"; (Outokumpu Harjavalta Metals Oy v WMC Resources Ltd (1996) 37 IPR 55 at 58).
(iii)errors or omissions resulting from faulty reflection, deliberation or mistake in judgment fall within the scope of s223; (Outokumpu; supra at 58)
(iv)error or omission may include a breakdown in procedure or a failure to exercise due diligence; (Oz Technology v Boral Energy Ltd (1999) APO 18 (2 March 1999)
(d)there must be a causal or connection between the error or omission and the relevant act that is required to be done within the stipulated time. In addition, the applicants for an extension must demonstrate that they had an intention to do the relevant required act, and than an error or omission on their, or their agent's behalf, reasonably could be said to have caused the failure to complete the relevant act in the time prescribed; (see Kimberly-clark, supra at 579)
(e)(i) the balance of the relevant factors must favour the exercise of the discretion in favour of the applicant for an extension. The Commissioner, in balancing these factors, is entitled to proceed on the basis that it is "more important to consider the consequences of extending or refusing to extend time than to debate the reasons why the act was not done in time; (Re Sanyo, supra, at 479)
(ii)relevant factors include:
(A)whether there has been a frank, comprehensive and clear disclosure of all the circumstances relevant to weighing the discretionary consideration;
(B)whether a serious opposition has been foreshadowed;
(C)whether there has been undue delay in seeking an extension of time;
(D)the interests of the parties in refusing or granting an extension;
(E)the public interest in refusing or granting an extension. (refer Lahore, Patents, Trademarks and Related Rights, Butterworths Service, at para.10223)"
I accept that these submissions should inform the exercise of any discretion.
Counsel for the applicant submitted however that the evidence disclosed or led to the clear inference that Mr Thomas Appleyard and the relevant officers or agents of Tirops had decided to allow the renewal fee to remain unpaid by the relevant anniversary because available funds were extremely limited, and they chose instead as a matter of deliberate policy to take advantage of the 6 months grace period intending to make the payment during that time.
It was not contested by Mr Cuerden that an "error or omission" had been made during the grace period which resulted in the payment being overlooked until after the grace period had expired but, it was contended no extension of time could be granted to remedy this oversight. The critical issue is therefore whether or not a deliberate policy decision was made to defer payment until the grace period was operating or a relevant error or omission had been made prior to that time which had a causal effect in the non payment of the fee.
In his statutory declaration (Exhibit A1) made on 17 August 2000, Thomas Appleyard stated (inter alia) as follows:
The Patent is one of many patents and patent applications covering several inventions for related subject matter that make up an international portfolio of patents and patent applications (hereinafter "the Patent Portfolio"), all in my name, but which are jointly owned by me and the Other Owners as tenants in common.
In early 1998, Romcrest Holdings Pty Ltd ACN: 081 412 553, which changed its name to Tirops Safety Technology Limited on 7 October 1999 (hereinafter "Tirops"), was engaged by the owners of the Patent to take over the handling of all of the administrative and decision making duties in relation to the maintenance of the Patent Portfolio for the purposes of commercialising the same on behalf of the owners of the Patent.
(a) As well as being a joint owner of the Patent and Patent Portfolio, I was, and still am, also a director of Tirops.
(b)During 1998 and 1999, I personally handled and managed all of the correspondence associated with the Patent Portfolio for Tirops and so I am apprised of the facts and circumstances that led to the renewal fee in relation to the Patent not being paid by the due date of 16 October 1999.
On 23 April 1998, Tirops instructed Wray & Associates, the patent attorneys engaged by Tirops for service of the Patent, to address all correspondence and accounts to Tirops at the following address, namely:
Romcrest Holdings Pty Ltd
Level 18, Central Park
152-158 St Georges Terrace
Perth WA 6000(hereinafter "the Central Park Office").
Consequently all correspondence and instructions in relation to the renewal of the Patent were undertaken between Tirops at the Central Park Office and Wraymark Services, the service entity of the patent attorneys Wray & Associates for the purposes of renewing the Patent.
(a) Until Tirops completed a capital raising in April 2000, Tirops encountered severe financial problems with being able to meet the due payment of some of the fees associated with the handling and prosecution of the Patent Portfolio.
Despite these problems, Tirops has always endeavoured to maintain its Patent Portfolio, and apart from deciding to abandon one application in an obscure country and the present oversight in connection with the Patent, has kept all of the patents and patent applications in the Patent Portfolio alive.
Unfortunately, these financial problems affected me directly, and it was necessary for me to sell my house, which I did, under sufferance and take up rented premises, which I did in April 1999.
(a) The Central Park Office of Tirops was a serviced office requiring little upkeep and so Tirops was able to maintain it until mid July 1999, before financial problems finally caused Tirops to relinquish the service and the office.
(b)On closing the Central Park Office, I arranged with the management company of that office (hereinafter "the Managers") to hold all mail received by them and addressed to Tirops, for me to collect periodically.
(c)Although this arrangement initially seemed to work well, I subsequently discovered that some of the mail received by the Managers was not actually held by them for me to collect and was returned to the sender. Hence sometimes when I attended the Central Park Office to collect the mail, unbeknown to me, I was only receiving some of the mail.
(c)In order to offset this problem, I started to go in and collect the mail more frequently, such as every one or two days, however, I still found that some of the mail was not being held for me to collect and was not being forwarded onto me.
(a) In view of these problems, I decided that the only thing I could do was to contact all of the relevant people who were corresponding with Tirops to address their correspondence to c/- my new residential address.
(b)Although I do not specifically recall contacting Wray & Associates about the matter, I have been informed by them that they effected a change of the address of Tirops to c/- my residential address on or about September 1999, although this was not completed across all of the files until 12 October 1999.
(a) During July and August 1999, Tirops negotiated and reached a preliminary agreement with an investment group to commercialise the inventions the subject of the Patent Portfolio.
(b)As a temporary arrangement, Tirops was provided with some initial funding from the investment group to use in a manner deemed appropriate by the directors.
(c)This money was used by the directors, amongst other things, to keep various intellectual property matters in the Patent Portfolio alive.
(d)Consequently, various payments for maintaining and prosecuting patent applications in Europe and Canada that were due or outstanding and of which I was aware, were paid throughout July to October 1999.
(a) I largely based my actions in relation to making payments to Wray & Associates and Wraymark Services on a letter dated 21 July 1999 from Wray & Associates addressed to Romcrest Holdings Pty Ltd at the Central Park Office address that I collected after Tirops ceased its occupancy of the Central Park Office.
(b)Due to the many pressures that were impacting on me at that time, including my wife's health, my financial situation, moving house, my general health (I am 73 years of age and underwent heart surgery in 1997), my younger son and his girlfriend living with my wife and me, and a terrible breakdown in my wife's, my younger son's and my own relationship with my eldest son, and being confronted with directly managing the large Patent Portfolio of Tirops being handled by Wray & Associates, it was usual for me to rely upon these communications to clearly identify required payments and action that I needed to undertake in relation to the Patent Portfolio.
(c)Insofar as its relevance to the present matter is concerned, the letter contained a first section addressing renewal matters to my name that were overdue at the time of the letter, and enclosed a schedule specifying the details of these matters.
(d)The remaining contents of the 21 July letter are confidential and deal with certain matters that are extra to the renewal of patents and patent applications of the Patent Portfolio, and are the subject of a claim of privilege under s200(2) of the Patents Act 1990 (cth).
(e)Without waiving privilege to the remaining contents of the letter, I have annexed hereto a copy of the letter with the matters unrelated to the present matter and to which privilege is claimed, blanked out from the letter, together with a copy of the Schedule enclosed therewith, at my Attachment TJA-1.
(a) At the time of receiving the letter of 21 July 1999, I believe that I misinterpreted it to denote all of the renewals in relation to the Patent Portfolio in respect of which I had to take action at that time and in the near future, instead of only those renewals that were overdue.
(b)In this respect, it gave me what I now appreciate was a false sense of security that I had all renewals under control.
(a) After conducting a thorough check of the records of Tirops, I have located a letter dated 24 August 1999 from Wraymark Services addressed to Romcrest Holdings Pty Ltd at the Central Park Offices, reminding Tirops of the need to pay the renewal fee due in respect of the Patent on 16 October 1999.
(b)Annexed hereto at my Attachment TJA-2 is a copy of this letter.
(c)I do not recall receiving this letter, although evidently I must have received it.
(a) As indicated, the letter of 24 August suggests that there was an earlier reminder sent by Wraymark Services.
(b)I have been advised by Wray & Associates that Wraymark Services actually did send an earlier reminder to Tirops in relation to the payment of the renewal fee for the Patent by way of a letter dated 2 August 1999, which was addressed to the Central Park Office.
(c)I do not recall receiving this earlier letter and my search of the records of Tirops has not located such.
(a) Although I have now located the letter dated 14 August 1999 shown at Attachment TJA-2, as previously stated, I do not recall receiving this letter and cannot explain why I have been able to now locate the letter but did not act on it if I received it last year, suffice it to say that it appears that an inadvertent error or omission was made by me in handling and dealing with the said letter.
(b)My normal practice in handling correspondence from Wray & Associates or Wraymark Services was to read the letter, determine whether any action was required, make a mental notice of the action required, file the letter in a Wray & Associates correspondence file where I kept all of the correspondence received from Wray & Associates, and attend to the appropriate action in due course, making reference back to the letter in the Wray & Associates correspondence file as necessary.
(c)In this instance, although I cannot recollect precisely all the circumstances, based upon my present recollection, I believe that it is likely that I received the letter and placed it in my Wray and Associates correspondence file without reading it properly, with a view to considering it later.
(d)As I did not have a system of consolidating all matters in relation to the Patent Portfolio that required action into a single sheet at that time, and that I did not request Wray & Associates to provide me with such, I primarily relied upon the schedule attached to the letter of 21 July 1999 referred to at Attachment TJA-1.
(e)Tirops has now introduced a system of consolidating matters requiring action into a summary sheet to assist in maintaining the Patent Portfolio.
(a) Given the:
(i)importance of the Patent to the investment group, the comparatively small amount that needed to be paid compared to other matters concerned with the Patent Portfolio that I attended to paying in October 1999 ($1,000 on 7 October 1999 and $178 on 11 October 1999); and
(ii)fact that Tirops had access to capital to make such payments at that time,
I can categorically state that the non-payment of the renewal fee for the Patent was an inadvertent oversight and did not arise from a deliberate or intentional act on my part or that of Tirops to not pay the renewal fee by 16 October 1999 or to defer such payment.
(b)One of the reasons why I am particularly sure about the non-payment being an oversight was that I was fairly certain that the Patent was being infringed by a competitor operated by my oldest son, and that the Patent was critically important to be maintained to enable me to still negotiate a settlement with my son, or if necessary, to commence infringement proceedings against the competitor.
(a) By late October 1999, Tirops had completed its negotiations with the investment group and it was agreed that the main coordinator of the investment group, Robert Davis, would take up a directorship in Tirops and attend to the financial matters concerning Tirops.
(b)Consequently, a consent was obtained in later October 1999 for Robert Davis to become a director of Tirops and was subsequently recorded with the Australian Securities Commission on 8 November 1999.
(a) Prior to Robert Davis taking up his directorship in Tirops, I endeavoured to keep him informed of what was occurring with respect to the Patent Portfolio by providing him with copies of letters I received from Wray & Associates and Wraymark Services on behalf of Tirops, whenever he visited Perth, which was about once a week every Thursday.
(b)From my review of the correspondence held by Tirops, the last letter I received and retained from Wray & Associates is dated 12 October 1999 and the next letter that I have a copy of is dated 25 January 2000.
(c)I can only assume that I misplaced the correspondence received in the intervening period or passed them on to Robert Davis.
(a) I have been advised by Wray & Associates that Wraymark Services sent a third letter to Tirops in relation to the renewal of the Patent dated 12 November 1999 addressed c/- my residential address.
(b)I have undertaken a thorough search of my correspondence file for Tirop's patent matters and the company records I have for Tirops, however I cannot now locate this letter.
(c)Annexed hereto at my Attachment TJA-3 is a copy of Wraymark Services file copy of this letter that they have now supplied me with for the purposes of this declaration .
(a) I have reviewed this letter and recall discussing its contents with the accounts receivable clerk of Wray & Associates back on 17 and 18 November 1999.
(b)I was surprised and alarmed b y the receipt of this letter as it indicated to me that I had forgotten to pay the renewal fee by 16 October 1999, which was an oversight by me and was quite unintentional.
(c)At that time both Robert Davis and my younger son Bradley Appleyard were away overseas, in attendance at a trade show in Chicago, USA.
(d)I recall advising the accounts receivable clerk of Wray & Associates that Bradley Appleyard would be back home on Tuesday 23 November 1999 and that the payment would be sorted out then, particularly given that Robert Davis was handling the financial affairs of Tirops at that time.
(e)I telephoned Bradley Appleyard and Robert Davis whilst they were in Chicago about the matter and advised them that they needed to attend to the matter on their return.
(a) After the return of Bradley Appleyard and Robert Davis from their trip to the USA, I was advised by Robert Davis that he had met with Stephen Krouzecky of Wray & Associates on or about 2 December 1999 and made a payment to Wray & Associates for them to attend to outstanding matters.
(b)I thought that the matter of payment of the outstanding renewal fee for the Patent was attended to at that time, and so I did not think any further about the matter.
(a) I have recently be advised by Stephen Krouzecky that a further letter dated 14 December 1999 addressing the matters raised at the 2 December meeting between Robert Davis and Stephen Krouzecky of Wray & Associates, including the requirement to pay the renewal fee in relation to the Patent, was sent to Tirops by Wray & Associates c/- my residential address by mail and by facsimile.
(b)I have conducted a thorough search of the company records for Tirops and cannot locate the letter.
(c)I have been advised by Stephen Krouzecky that this letter is the original of the letter shown at Attachment RMD-1 of the Davis Declaration.
(a) Although I do not recall specifically receiving this letter, and especially anything concerning the overdue requirement to pay the renewal fee in relation to the Patent, if I did receive the letter, I believe that, in accordance with my usual practice at that time, I probably would have passed a copy of it on to Robert Davis.
(b)In any event, given that the letter was apparently in relation to matters covered at the 2 December meeting, I would not, in any event, have paid too much attention to it and would have assumed that Robert Davis would have had everything under control, as he seemed to me, based upon my day to day dealings and discussions with him, to be a very methodical person and thorough with the Tirops matters that he handled.
(a) With respect to the alleged facsimile of this letter, I believe that in all probability I did not receive it.
(b)(i) The reason for this is that after shifting to my new residence back in April of 1999, I had a duet phone/facsimile line installed.
(ii)I made inquiry of and was informed by Telstra, that under this system the telephone receiver was able to distinguish between an incoming telephone call and an incoming facsimile call, and switch between the telephone ringing to alert someone if there was an incoming telephone call and the facsimile machine if there was an incoming facsimile call.
(iii)Furthermore, I was informed by Telstra that if the facsimile machine did not answer the facsimile call, then the facsimile call would be diverted and stored in a queue termed a Faxbank, where the facsimile was received and from which it could be retrieved some time later.
(iv)Unfortunately our facsimile system did not do what it was supposed to do and whilst I believe I received many facsimiles on the Faxbank, we had problems retrieving these until the problem was eventually solved by Telstra in February 2000.
(v)Apparently, up to the time when the fault was finally repaired, an unknown number of faxes that were diverted to the Faxbank were not stored by the Faxbank and were never able to be retrieved by me.
(c)After I became aware of the problem, I advised people not to send us facsimiles or to ensure that I was home to receive them, before sending them.
(d)I believe I did advise Wray & Associates of the problem, however, I can't recall whether that was prior to 17 December 1999 or not.
(e)In all probability, I believe that the alleged facsimile of the letter of 14 December sent to Tirops by Wray & Associates was received by Faxbank and was never able to be retrieved by me.
...
(a) In summary, after having given careful consideration to all the facts, matters and circumstances which I refer to above, I believe I was unaware or simply forgot the need to pay the renewal fee in relation to the Patent leading up to 16 October 1999.
(b)Subsequent to 16 October 1999, although I was informed of the non-payment of the renewal fee of the Patent by virtue of the 12 November letter and my telephone conversation with the accounts receivable clerk of Wray & Associates, my recollection and belief is that I informed Robert Davis of this requirement during my telephone conversation with him and Bradley Appleyard, whilst they were in the USA, on or about 18 November 1999. As a result, I formed the view, and believe, that Robert Davis had dealt with the matter during the 2 December meeting with Stephen Krouzecky.
(c)If I had known, that the renewal fee still had not been paid, I certainly would have followed the matter up with Robert Davis to ensure that Wraymark Services were instructed to attend to the payment in due time. This is because, at that stage, Tirops did have access to the funds to make the necessary payment and I knew that the Patent being maintained was an extremely crucial part of the business plan that Tirops was following at that time and still is.
In the present circumstances where the Patent is in a state of lapse, I verily believe that Tirops and each of the individual shareholders and investors will suffer significant and irreparable prejudice in not being able to derive any financial benefit, which otherwise I believe would be available from exploiting the invention the subject of the Patent for the remainder of the statutory term of 20 years, namely until 16 October 2012."
Insofar as these allegations concern dealings between Thomas Appleyard, Robert Max Davis and Stephen Krouzecky the facts alleged in Mr Appleyard's declaration have been corroborated in all material respects by Mr Davis and Mr Krouzecky both of whom also made statutory declarations upon which they were cross-examined during the hearing. Furthermore, during the course of proceedings, a memorandum from the accounts receivable clerk of Wray and Associates which formed part of that firm's file, was produced and became Exhibit A5. That memorandum tended to confirm the matters stated by Thomas Appleyard in paragraph 21(a) of his declaration.
I am in no doubt that Thomas Appleyard telephoned Robert Davis with concerns over the non-payment of the patent's renewal fee, whilst Davis and Bradley Appleyard were in Chicago USA. This call has some significance because its subject matter does not appear to be consistent with a determination by Thomas Appleyard to defer payment until some time close to the end of the grace period which at that time (17 and 18 November 1999) still had 5 months to run.
Mr Cuerden, counsel for the applicant conducted a searching cross-examination of Thomas Appleyard, Robert Davis and Stephen Krouzecky and although he was able to demonstrate that both Thomas Appleyard and Tirops were in poor financial circumstances around 16 October 1999 and, further, that Thomas Appleyard was quite wrong in his assertions as to how he came to be in possession of TJA-2 (letter of 24 August 1999 from Wraymark Services), I am not persuaded that any of the 3 deponents named set out to deliberately mislead me.
On the other hand, the evidence clearly demonstrates an extraordinary confusion and lack of proper business attention to detail which contributed to the concatenation of events which attended the non-payment of the renewal fee both before and, particularly, after 16 October 1999.
Warning after warning was given by Wraymark & Associates as to the need to pay the renewal fee and the consequences of not doing so. These warnings, though not deliberately flouted, were overlooked not only as a result of Mr Thomas Appleyard's inattention (which is largely explicable by the distressing personal tribulations he was experiencing), but also as a consequence of Mr Davis' repeated failure to grasp the enormity of the developing crisis and, on one occasion, (the meeting following Davis' receipt of the letter of 14 December 1999 (RMD-1)) Stephen Krouzecky's failure to follow through with Davis on the issues raised in pages 2 and 3 of that letter).
Mr McCormack made much of the fact that the applicant called no evidence to directly contradict the evidence adduced by the parties joined,and referred to some of the remarks in the well known decision of Purkess v Crittenden 1965, 114 CLR 164 to support his contention that in the absence of such material, adverse findings should not be made contrary to facts alleged by the witnesses, Appleyard, Davis and Krouzecky. However, I do not accept this submission. If a witness asserts a fact which is shown by cross-examination or otherwise not to be true, an inference inconsistent with the fact stated may sometimes be drawn. It is not necessary to pursue this argument in detail, however, as I am prepared to accept that Mr Appleyard's evidence as to his intent to pay the renewal fee on or before 16 October 1999 is, in all material respects, correct. This being so, it seems to me to be unnecessary to pursue the subsequent events in detail except to the extent that they may illuminate the circumstances which led to the failure to pay on 16 October. It seems to me that even if I should find that after 16 October 1999 responsible officers of the parties joined became aware of the erroneous failure to pay on or before that date, and thereafter failed to take steps to pay immediately or even determined to postpone payment until towards the end of the grace period, such findings would not deprive me of jurisdiction to exercise the discretion created by s223(2) of the Act on the basis that the error or omission occurring prior to 16 October was a "relevant act", but was not a "prescribed action" within the meaning of s223(11) and regulation 22.11(3)(b). Mr Cuerden did not seek to argue to the contrary of these propositions.
I find that:
(a)The failure to pay the relevant renewal fee on or before the anniversary date was the product of an error or omission, and was not the consequence of a deliberate decision.
(b)There has been a frank and comprehensive disclosure of all relevant circumstances bearing upon the exercise of the discretion which thus arises.
(c)There was no undue delay in seeking an extension of time.
(d)There is no public interest outweighing the granting of an extension of time.
(e)The refusal to exercise the discretion in favour of the parties joined would have serious adverse consequences upon their ability to pursue the applicant and associated companies for alleged breaches of the patent.
(f)This latter consideration is not outweighed by the probable advantage to the applicant in any such proceedings if the application to extend time were to be refused.
In my opinion the attribution of serious fault to Mr Appleyard and Mr Davis in making relevant errors should not stand against the exercise of discretion favourably to the patentee.
Mr Cuerden, properly in my opinion, did not seek to address me specifically on issues going to the exercise of the discretion.
In my opinion the discretion should be exercised favourably to the patentee and in consequence I affirm the decision of the Commissioner's delegate which was the subject of these proceedings.
Since the hearing counsel have provided me with what is in effect a joint submission as to costs. I agree with that submission that I have no power to award costs, save as to witnesses expenses. As to such expenses I direct that the applicant meet the costs of subpoenaing the witnesses Appleyard, Davis and Krouzecky and a reasonable sum for their expenses. If these amounts cannot be agreed between the parties they are to be the subject of a determination by a member of the Tribunal.
I thank counsel for their considerable assistance and their willingness to confine their attention to relevant issues and to avoid unproductive contentions.
I certify that the 26 preceding paragraphs are a true copy of the reasons for the decision herein of The Hon C R Wright QC., (Deputy President)
Signed: K L Miller
Personal AssistantDate/s of Hearing 25 and 26 October 2001
Date of Decision 28 November 2001
Counsel for the Applicant Mr Martin Cuerden
Solicitor for the Applicant Hammond Worthington Lawyers
Counsel for Parties Joined Mr Richard McCormack
Solicitor for Parties Joined Richard Payne & Associates
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