Re Preference Manufacturing (Aust) Pty Ltd and Commissioner of Patents
[2012] AATA 393
•27 June 2012
[2012] AATA 393
Division GENERAL ADMINISTRATIVE DIVISION File Number
2011/5005
Re
Preference Manufacturing (Aust) Pty Ltd
APPLICANT
And
Commissioner of Patents
RESPONDENT
And
Breezway Australia (Holdings) Pty Ltd
JOINED PARTY
DECISION
Tribunal Deputy President PE Hack SC
Date 27 June 2012 Place Brisbane The decision under review is set aside and a decision substituted that the application by Breezway Holdings (Australia) Pty Ltd for dismissal of the opposition by Preference Manufacturing (Aust) Pty Ltd be refused and that there be no order as to costs.
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Deputy President PE Hack SC
CATCHWORDS
PATENTS, TRADEMARKS AND REGISTERS – patents – opposition to the allowance of an amendment of notice of entitlement – opposition summarily dismissed – discordance in entitlement details – clerical error – matter not capable of being determined summarily – decision set aside and a decision substituted.
LEGISLATION
Patents Act 1990 (Cth) ss 29(1), 104(1), 104(2), 104(4)
Patents Regulations 1991 (Cth) Regs. 3.1(2), 5.3(3), 5.4, 5.5(1), 5.12, 10.1, 10.2, 10.3, 10.4, 10.5(1). 10.5(3), 10.6(3), 22.26(2)(a)(iii).
CASES
New England Biolabs Inc v Commissioner of Patents [2001] FCA 787; (2001) 110 FCR 357
REASONS FOR DECISION
Deputy President PE Hack SC
27 June 2012
Background
In March 2007 Cullen & Co, patent attorneys for Breezway Australia (Holdings) Pty Ltd (Breezway (Holdings)), the joined party in these proceedings, lodged a request with the respondent, the Commissioner of Patents, for the grant of a patent for an invention described as “a louvre system”. The request named four persons as being the inventors of the invention. Subsequently Cullen & Co lodged a Notice of Entitlement dated 3 April 2009. That document read,
We, Breezway Australia Pty Ltd, of 35 Cambridge Street, Coorparoo, in the State of Queensland, 4151, Australia, being the applicant in respect of the attached Application, state the following –
We have entitlement to the grant of the patent from the actual inventors as the invention was made by the inventors in the course of their employment duties with the applicant company.
We are the applicant of the original application.
Breezway Australia (Holdings) Pty Ltd
By their Patent Attorneys
CULLEN & CO
[signature]
This case concerns the inconsistency between the name in the first line, Breezway Australia Pty Ltd, and that at the foot of the document, Breezway Australia (Holdings) Pty Ltd. Breezway Australia Pty Ltd (Breezway) is a related corporation of Breezway (Holdings).
The patent application proceeded to acceptance and was sealed on 24 September 2009.
On 5 January 2011 Cullens (the new title of Cullen & Co) lodged a request on behalf of Breezway (Holdings) to amend the Notice of Entitlement. What was proposed was as follows,
We, Breezway Australia (Holdings) Pty Ltd, of 35 Cambridge Street, Coorparoo, in the State of Queensland, 4151, Australia, being the applicant in respect of the attached Application, state the following –
We have entitlement to the grant of the patent from the actual inventors as the invention was made by the inventors in the course of their employment duties with
the applicant companyBreezway Australia Pty Ltd and Breezway Australia Pty Ltd have assigned their rights to us Breezway Australia (Holdings) Pty Ltd.We are the assignees of the applicant of the original application.
Breezway Australia (Holdings) Pty Ltd
By their Patent Attorneys
CULLEN & CO
[signature]
The reason[1] for making the request was described within the request in these terms,
A clerical error or obvious mistake has been identified in the Notice of Entitlement. In particular, the Notice of Entitlement incorrectly identifies the owner of the parent application as the applicant in respect of the current patent. At all times, the owner of the application and patent, Breezway Australia (Holdings) has had the entitlement to the application and patent, but the Notice of Entitlement does not reflect the chain of title.
[1] The document used the word “reason”, not “purpose”.
On 4 February 2011 a delegate of the Commissioner completed a report on the proposed amendments in accordance with Reg. 10.2 (1). The report was “not an adverse report” and the delegate allowed the amendment proposed. The amendment was advertised for opposition purposes on 17 February 2011.
On 9 May 2011 Preference Manufacturing Pty Ltd (Preference), the applicant in these proceedings, filed a notice of opposition to the allowance of the amendment to the Notice of Entitlement. In its substantive parts the statement in support of the notice said,
The grounds of opposition are as follows:-
1.Opposition under Section 104(4)
That the amendment of the Notice of Entitlement requested on January 5 2011 to amend wording to change the nominated applicant and the chain of title does not comply with section 104 and hence is not allowable.
2.Opposition under Reg. 10.7 sub Reg (4) and/or Reg 10.5 sub Reg (3)
That the amendment of the Notice of Entitlement requested on 5 January 2011 to amend the name of the applicant and the chain of title does not comply with Section 228 and Regulation 10.7 sub Reg 1 and/or Reg 10.5 sub Reg 1.
That the amendment of the Notice of Entitlement to remove reference to Breezway Australia Pty Ltd as applicant to introduce an assertion of an assignment from Breezway Australia Pty Ltd to Breezway Australia (Holdings) Pty Ltd does not comply with Section 228 and Regulation 10.7 sub Reg (1) and/or Regulation 10.5 sub Reg (1) and is therefore not allowable.
The particulars are as follows:
1. Australian Patent Application No. 2007201165 was filed in the name of Breezway Australia (Holdings) Pty Ltd.
2. It is a divisional application of Australian Patent Application and subsequent Patent No. 200234406 filed in the name of Breezway Australia Pty Ltd (“Parent Application”).
3. Australian Patent Application was filed on 16 March 2007.
4. The applicant for a divisional application must be the same as the applicant of the parent application (S 79B).
5. As applicant includes a person entitled to make a request under Section 113 which states that where, before a patent is granted, the person would, if a patent was then granted be entitled under an assignment or agreement or by operation of law to the patent or an interest in it.
6. The Commissioner may, on a request made by the person according to the regulations direct that the application proceed in the name of the person so entitled. If the applicants are different there should be a clear entitlement under Section 113. The evidential requirement to warrant a Section 113 direction must be met when a divisional application is filed in a name other than that of the parent applicant. No such evidential requirement was satisfied by the nominated applicant.
7. The applicant states that there is an obvious error. There is no such error as the correction is not apparent on the face of the document. There is no reason to assume that Breezway Australia (Holdings) Pty Ltd is the assignee of Breezway Australia Pty Ltd.
8. The applicant states that there was a clerical error in the preparation of the Notice of Entitlement. There is no evidence of such a clerical error and the changes requested, on the face of the matter, do not constitute clerical error.
9. The applicant’s representatives state that “instructions to adjust the chain of title to correctly reflect the entitlement were issued by the applicant”. There is no evidence of such instructions.
10. The applicant’s representative states that “the reason for the clerical error is likely through the use of the Notice of Entitlement for the parent application being used as a base for the Notice of Entitlement prepared for the divisional application with the failure to adjust the change of title to reflect the different owner” (emphasis added). This is identification of a possibility rather than a reason. There is no evidence as to whom prepared the Notice of Entitlement or, how that person elected to use a faulty precedent and not check it.
11. There is no evidence from the person who signed the Notice of Entitlement and why the person did not detect any inconsistency and correct it.
12. The original Notice of Entitlement filed prior to sealing the patent is equally consistent with the divisional application being filed ion the incorrect corporate entity and that in fact, Breezway Australian [sic] Pty Ltd, is the party that would have been the rightful applicant.
13. The onus of establishing the clerical error is on the applicant for amendment and patentees. That onus has not been discharged.
Then on 18 August 2011 Cullens lodged a request for the dismissal of the opposition. The essence of its argument in support of taking that course appears from this passage:
In order to have statutory basis, the grounds for the present Opposition must lie either in Section 102, which deals with amendments that are not allowable, or in the Regulations. The Patentee submits that the Opposition has no reasonable prospect of success as the “grounds” relied on by the Opponent lack statutory basis.
Thereafter the parties and the Commissioner’s delegate agreed that this application to summarily dismiss the opposition would be dealt with by written submissions without an oral hearing.
On 25 October 2011, for reasons published that day[2] a delegate of the Commissioner decided that none of Preference’s grounds of opposition could stand and dismissed the opposition. Breezway (Holdings) was awarded its costs against Preference. The decision to dismiss the opposition was a decision that was, by virtue of Reg. 22.26(2)(a)(iii) of the Patents Regulations 1991 (Cth), reviewable in this Tribunal. Preference commenced these proceedings on 18 November 2011. On 21 February 2012, on its application, Breezway (Holdings) was made a party to the proceedings. It did not, however, participate in the hearing.
[2] See Preference Manufacturing (Aust) Pty Ltd v Breezway Australia (Holdings) Pty Ltd [2011] APO 81.
The statutory scheme
Reference now needs to be made to the legislation – the Patents Act 1990 (Cth) and the Patents Regulations. The starting point is s 29(1) of the Act which is in these terms,
(1)A person may apply for a patent for an invention by filing, in accordance with the regulations, a patent request and such other documents as are prescribed.
It will suffice for present purposes to note that Reg. 3.1(2) of the Patents Regulations requires that “a notice by the applicant stating the entitlement of the nominated person to the grant of the patent” be filed before acceptance. It was that notice which was lodged by Cullen & Co on 3 April 2009.
The power to amend is contained in s 104 of the Act. It provides, so far as is presently material,
(1)An applicant for a patent or a patentee, may, subject to this Act, and subject to and in accordance with the regulations, ask the Commissioner for leave to amend the relevant patent request or complete specification, or any other filed document, for any purpose including either or both of the following:
(a)removing a lawful ground of objection to the request or specification, whether that objection is raised in the course of an examination or re‑examination or otherwise;
(b)correcting a clerical error or an obvious mistake.
(2)Where an applicant or patentee asks for leave to amend a patent request or complete specification, or any other filed document, the Commissioner must consider and deal with the request in accordance with the regulations.
(4)The Minister or any other person may, subject to and in accordance with the regulations, oppose allowing an amendment.
(5)The Commissioner must not allow an amendment that is not allowable under section 102.
…
Amendment is dealt with in Chapter 10 of the Patent Regulations. Relevantly excerpted, Reg. 10.1 provides,
(1)For the purposes of subsection 104 (1) of the Act, an applicant or a patentee may ask the Commissioner for leave to amend a patent request or complete specification or another filed document by filing a request for leave to amend in the approved form together with a statement of proposed amendments.
…
(3)The Commissioner may require an applicant or a patentee to file, within 3 months of being asked to do so, a statement of the reasons for the request being made and any evidence in support of the request.
(4)The Commissioner may, before granting leave to amend, require a patentee to file within 1 month of being asked to do so, a statement that, to the best of his or her knowledge, relevant proceedings are not pending in relation to the patent.
The requirement of s 104(2) of the Act, that the Commissioner consider and deal with a request for amendment in accordance with the Regulations, leads then to Reg. 10.2 which provides,
(1)For the purposes of subsection 104 (2) of the Act, the Commissioner must report on whether:
(a)the request for leave to amend and the statement of proposed amendments do not comply with regulation 10.1 and Schedule 3; and
(b)any proposed amendment of a complete specification is not allowable under section 102 or 103 of the Act; and
(c)the proposed amendments are not allowable under regulation 10.3 or, if made, would not otherwise be allowable under the Act or these Regulations;
and may, if the request for leave to amend relates to a PCT application, and a copy of an international preliminary examination report relating to the application has not been provided to the Commissioner:
(d)report on that fact; and
(e)ask the applicant to provide a copy of the international preliminary examination report, or to advise that no amendments were made under Article 34 of the PCT, or to abandon any amendments that may have been made under Article 34 of the PCT.
(2)The Commissioner must give a copy of each report made under subregulation (1) to the applicant or patentee.
Reg. 10.3 deals with amendments that are not allowable. It has no present relevance and refers only to amendments proposed to provisional specifications, patent requests or complete specifications. The circumstances under which the Commissioner must refuse leave to amend are set out in Reg. 10.4 in these terms:
The Commissioner must refuse the request for leave to amend, if:
(a)he or she reasonably believes that a proposed amendment is not allowable, other than for the reasons mentioned in subregulation 10.3 (4); or
(b)the applicant or patentee has not complied with a request of the Commissioner under subregulation 10.1 (3); or
(c)in the case of a proposed amendment of a complete specification relating to a patent — the patentee has not complied with a request of the Commissioner under subregulation 10.1 (4).
Conversely, the circumstances in which the Commissioner must grant leave are dealt with in Reg. 10.5(1). It provides,
(1)The Commissioner must grant leave to amend a patent request, complete specification or other filed document:
(a)if the report on the proposed amendments under subregulation 10.2 (1) is not an adverse report; and
(b)in the case of amendments that are proposed in anticipation of, or in response to, a report relating to an examination under section 45 or 48 of the Act and that do not relate to matters mentioned in paragraph 6 (c) of the Act — if the Commissioner believes on reasonable grounds that the proposed amendments would remove all lawful grounds of objection to the patent request and complete specification; and
(c)in the case of amendments that are proposed in anticipation of, or in response to, a report relating to an examination under section 101B of the Act — if the Commissioner believes on reasonable grounds that the proposed amendments would remove all lawful grounds for revocation of the innovation patent.
If the proposed amendments are in respect of “another filed document”, the proposed amendments would materially alter the meaning or scope of the document and the Commissioner grants leave to amend, notice of that fact must be published in the Official Journal[3]. If notice is published under that subregulation the Minister or another person may oppose allowance of the amendment[4].
[3] Reg. 10.5(2).
[4] Reg. 10.5(3).
Opposition is dealt with in Chapter 5 of the Regulations. By virtue of Reg. 5.1, that Chapter has present application because Preference has filed a notice of opposition for the purposes of s 104(4) of the Act. Any person who intends to oppose the amendment must file a notice of opposition within three months of publication in the Official Journal[5]. Thereafter the opponent must,
(a)within 3 months of filing the notice of opposition, serve on the applicant a copy of a statement that sets out the grounds of opposition, and the particulars relating to each ground; and
(b)as soon as practicable after the copy of the statement has been served on the applicant, file the statement.[6]
[5] See Reg. 5.3(3).
[6] See Reg. 5.4.
Within one month after service on it of the opponent’s statement, the applicant may request the Commissioner to dismiss the opposition[7]. That is the step which Breezway (Holdings) took in the present case on 18 August 2011. The regulations do not prescribe a test for summary dismissal however the Commissioner has adopted the approach taken in the Federal Court of Australia when dealing with an application for summary judgment and considers whether there are prospects of success that are real and not fanciful or merely arguable. Preference did not suggest that any other test should be applied.
[7] See Reg. 5.5(1).
Consideration
Breezway (Holdings) was entitled to seek leave to amend. And, as the Commissioner pointed out in submissions, it was not limited to the purposes specified in s 104(1)(a) or (b) of the Act. So much may be accepted, however, Breezway (Holdings) did identify the purpose of the amendment. The stated purpose for the amendment (although described in the application for amendment as the reason), was to correct a clerical error or obvious mistake. Subsequently, and in response to the Commissioner’s request for further information, the expression “obvious error [which] came about due to a clerical error” was used.
Once the application had been lodged the Commissioner was bound to prepare a report in accordance with Reg. 10.2. In New England Biolabs Inc v Commissioner of Patents[8] Emmett J said of Reg. 10.2(1)(c) that its intention was,
to require the Commissioner to embark on the purely administrative task of checking whether there is any provision in the 1990 Act or the Regulations that would impede the proposed amendment.
In that case his Honour went on to conclude that the Commissioner had no discretion to refuse to grant leave provided the report was not an adverse report. He said,
[66]Regulations 10.4 and 10.5 must be presumed to cover the field in their effect, although they do not do so in their language. If the Commissioner reports that any of the negatives applies, the Commissioner must make an adverse report. Thus an adverse report signifies that the Commissioner reasonably believes that the proposed amendment is not allowable. As a result, reg 10.4(a) must be read as meaning that the report is an adverse report. If reg 10.4 is not so read, circumstances could arise that do not fall within either reg 10.4 or 10.5. Theoretically, it would be possible that a report be adverse, but the Commissioner, notwithstanding that fact, not believe that the proposed amendment is not allowable. There is nothing in the 1990 Act or the Regulations to suggest that is intended.
[67]All of the considerations outlined above lead to the conclusion that the Commissioner's delegate did not misconceive his function. The Commissioner had no discretion to refuse to grant leave to amend on the basis of the conduct of Roche prior to requesting such leave. The Commissioner had no discretion to decline to allow the amendments requested on the basis of the conduct of Roche prior to making its request for leave to amend. Accordingly, the relevant grounds of review are not made out and declarations (d) and (e) sought by NEB should be refused.
All this may be accepted however it seems to me that the decision has no bearing on the present case. His Honour’s reference to the absence of discretion must be read as subject to the express regulations regarding the time of effect of the amendment. This amendment, being one to which Reg. 10.5(2) applies, i.e. one where there is a requirement to publish a notice in the Official Journal, and one where there is opposition, does not take effect until after the determination of opposition proceedings[9].
[8] [2001] FCA 787; (2001) 110 FCR 357, at [60].
[9] See Reg. 10.6(3).
The question is not whether the Commissioner made the correct decision on 4 February 2011 when the delegate determined to allow the amendments; the question is whether the delegate was correct in summarily dismissing the opposition by Preference. That question arose at the second of the two steps involved in the process. The process was described by Emmett J in these terms in New England Biolabs[10],
Thus, the Regulations clearly draw a distinction between the granting of leave to amend on the one hand and the allowing of an amendment on the other hand. The two steps occur at different times. A patent applicant may ask for leave to amend and the Commissioner must either allow the amendment or not allow the amendment. However, before deciding whether to allow an amendment, any person who wants it must be given the opportunity of opposing the allowance of the amendment. In so far as the Regulations contemplate an anterior grant of leave to amend before opposition proceedings are commenced, they must be taken to be doing no more than specifying the procedure that leads to any person being afforded the opportunity to oppose the amendment. That procedure, however, permits the Commissioner to refuse leave to amend whether or not the amendment is opposed.
[10] At [23].
The delegate had no discretion in February 2011 however, as it seems to me, the position was different once Preference filed its notice of opposition. Subject only to the question of summary dismissal of the opposition, the Commissioner was obliged to determine the opposition, by holding a hearing in accordance with Reg. 5.12 and considering such evidence as the parties put on. Implicit in the statutory scheme is recognition that it is open to an opponent to demonstrate why, in a case such as the present, amendment of another document ought not be allowed despite the Commissioner’s original view. It is open to an opponent to demonstrate that the factual basis on which an amendment is sought is not made out.
Here Preference sought to demonstrate a factual controversy. There was, it contended in its grounds and particulars, an evident discord between the entitlement claims made in the patent application and the divisional application. And, it said, there was no evidence to support the assertions of the fact of clerical error, only a statement as to the “likely” reason for the claimed error.
The difficulty in Preference’s approach in its grounds of opposition was that it appears to have considered itself bound to cite specific statutory provisions that had not been complied with. Those provisions were, as it now accepts, irrelevant; they were false issues that could play no role in determining whether this amendment ought to have been allowed in opposition proceedings.
Unfortunately the raising of those false issues led Breezway (Holdings) to seek, and the delegate to grant, summary dismissal. Both focused on the irrelevant false issues and concluded, correctly, that those matters afforded no basis for opposing the amendment. But, as I have said, the matter did not stop there. The text of the matters in Preference’s notice warranted further consideration. In my view the conclusion reached that no grounds of opposition could stand was not the preferable decision although it is understandable how the delegate reached that view.
Behind the façade of the false issues Preference had two points of apparent factual substance – the discordance in entitlement details between the two applications and the absence of evidence that raised a prima facie case that there was a clerical error or obvious mistake to be corrected. It may well be that Breezway (Holdings) can and will present evidence that explains the discordance and circumstances that demonstrate error or mistake at a hearing. But I do not consider that the matter was capable of being determined summarily; there were factual matters that warranted investigation and proper consideration.
I would then set aside the decision under review and substitute a decision that the application for summary dismissal be refused. The parties made no submissions to me regarding costs. In the absence of any suggestion that costs lie outside the jurisdiction of the tribunals I would be minded to make no order as to costs. Preference was at fault in raising false issues in its notice of opposition; Breezeway was at fault in seeking summary dismissal. Justice is best served, in my view, by leaving the costs lie where they fall.
I certify that the preceding 23 (twenty -three) paragraphs are a true copy of the reasons for the decision herein of Deputy President PE Hack SC ........................................................................
Associate
Dated 27 June 2012
Date of hearing 28 May 2012 Advocate for the Applicant Fisher Adams Kelly, Patent & Trade Mark Attorneys Solicitors for the Respondent Australian Government Solicitor Advocate for the Joined Party Cullens, Patent and Trade Mark Attorneys
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