RE Watson
[2020] APO 28
•16 June 2020
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Dale Cameron Watson [2020] APO 28
Patent Application: 2011349052
Title:Surfing device and method
Patent Applicant: Stephen Con Kriticos
Requestor: Dale Cameron Watson
Delegate: O L Haggar
Decision Date: 16 June 2020
Hearing Date: Written submissions filed on 23 March 2020
Catchwords: PATENTS – section 223(2)(a) – request for an extension of time in which to pay the acceptance fee – patent applicant not a party to the proceedings – request for a stay in proceedings – stay not granted – whether the payment of acceptance fees is a relevant act that is required to be done within a certain time – whether the request has been made by the person concerned – deliberate decision not to pay the acceptance fee – no causative error or omission – undue delay in making the request – request for an extension of time refused
Representation: Patent attorney for the applicant: Applicant not a party to the proceedings
Patent attorney for the requestor: Dale Watson of Bellator Patent and Trade Mark Attorneys
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2011349052
Title:Surfing device and method
Patent Applicant: Stephen Con Kriticos
Date of Decision: 16 June 2020
DECISION
I refuse the request for an extension of time made under section 223(2)(a) on 2 September 2019.
REASONS FOR DECISION
Background
Patent application 2011349052 (the present application) was filed by Stephen Con Kriticos on 21 December 2011 under the provisions of the Patent Cooperation Treaty as international application PCT/AU2011/001665 (the international application). Examination of the present application was requested on 4 August 2015, and its acceptance advertised on 5 January 2017.
On 20 December 2016, the Office issued an Invitation to Pay (the ITP) which specified that the acceptance fee and the excess claims fee (collectively the acceptance fees) itemised by the ITP were due to be paid by 5 April 2017. In a letter dated 20 April 2017, the Office advised Mr Kriticos that the present application had lapsed as a result of the failure to pay the acceptance fees by the due date.
A request under section 223(2)(b) to extend the time for paying the acceptance fees was filed on 25 June 2019 (the first extension request). This and subsequent requests for an extension of time, which I will come to shortly, were not filed by or on behalf of Mr Kriticos. The requests were instead filed by Dale Cameron Watson, patent attorney and principal of the firm Bellator Patent and Trade Mark Attorneys, who the evidence has established was acting contrary to the express wishes of Mr Kriticos despite being recorded by the present application as his attorney. The first extension request was accompanied by a declaration by Mr Watson also dated 25 June 2019 (the first Watson declaration).
By letter dated 3 July 2019, a delegate of the Commissioner advised Mr Watson that the evidence provided in the first Watson declaration did not justify an extension under section 223(2)(b). Mr Watson was nevertheless given the opportunity to provide additional supporting evidence. On 2 September 2019, he filed a replacement request for an extension of time under section 223(2)(a) (the second extension request) and a declaration by him also dated 2 September 2019 (the second Watson declaration).
In a letter dated 9 October 2019, a delegate of the Commissioner advised Mr Watson that the evidence provided in the first and second Watson declarations did not justify an extension under section 223(2)(a), but gave him the opportunity to provide further information in support of the second extension request.
On 2 December 2019, Mr Watson filed (i) a request to be heard together with the requisite hearing fee, (ii) further information in response to the delegate’s letter of 9 October, and (iii) a request under 223(2)(a) to extend the time for providing the further information (the third extension request). In brief, the further information comprises copies of documents that have been served in the Federal Court in relation to proceedings brought by Mr Watson against Mr Kriticos (NSD970 of 2019) seeking inter alia a declaration by the Court that Mr Watson be registered as a part-owner of the present application (the Court proceedings).
In a letter dated 17 January 2020, a delegate of the Commissioner advised Mr Watson that the third extension request was unnecessary. However, the delegate maintained that even when considered together with the further information, the evidence provided in the first and second Watson declarations did not justify an extension under section 223(2)(a). The delegate accordingly also advised that, as requested by Mr Watson, the matter would be set for hearing by written submissions.
Written submissions for the hearing together with another declaration by Mr Watson (the third Watson declaration) were filed on 23 March 2020.
It is to be understood that this decision relates solely to the second extension request which, as I have said, seeks to extend the time for paying the acceptance fees under section 223(2)(a). The extension sought is for a period of 27 months ending on 5 July 2019.
It is also important to note that the applicant, Mr Kriticos, is not a party to these proceedings.
The evidence
The first Watson declaration was originally filed in support of the first extension request which has since been replaced by the second extension request. However, it is clear that Mr Watson continues to rely on the first Watson declaration for the purposes of this decision.
Mr Watson has relevantly declared as follows:
“1. I have an ownership share of [the present application] by virtue of my conditions for entering national phase of [the international application].
2. An email dated 30 March 2017 from me to Mr Kriticos notifies that money owed to me needs to be paid in order for me to pay [the acceptance fees].
3. An email from Mr Kriticos to me dated 1 April 2017 states that Mr Kriticos doesn’t wish to proceed with acceptance of the [present] application.
4. An email from Mr Kriticos to me dated 5 April 2017 states that I think I will pay the acceptance fee in view of my interest in the [present] application.
5. An email from Mr Kriticos to me dated 5 April 2017 states: ‘My instruction is to not pay or pursue the Australian patent [sic]. It’s not your call and keeping the patent in force may irreparably harm my business.’
6. Another email from Mr Kriticos to me dated 5 April 2017 and sent shortly after threatens that a third party, Whitewater West Industries Ltd (Whitewater), will take action if the acceptance fee is paid and indicates that by allowing the [present] application to lapse Whitewater will be able to exploit the corresponding invention(s) …
7. An email from me to Mr Kriticos dated 30 June 2017 declares a potential conflict of interest in relation to the [present] application and other patent applications and patents.”
Mr Watson goes on to state that these and later events led to the commencement of the Court proceedings on 14 June 2019.
As can be seen, Mr Watson’s evidence relies heavily on a series of emails allegedly sent between him and Mr Kriticos, and yet none of these emails have been exhibited by the first Watson declaration. Nevertheless, and given his professional standing as a patent attorney, I think it highly unlikely that Mr Watson would be prepared to fabricate evidence regarding the intentions of his client at the time in proceedings before the Commissioner, particularly when that evidence has proven to be unhelpful to him. Overall I am prepared to accept the uncorroborated evidence provided by the first Watson declaration.
The second Watson declaration is set out in full below:
“1. On or shortly before 5 April 2017 I decided, in spite of my financial interest in [the present application], to comply with Mr Kriticos’ instructions to me as his patent attorney and not pay [the acceptance fees].
2. Contrary to item 1 … on or before 5 April 2017 I should have determined that in view of my financial interest in [the present application] I shouldn’t and couldn’t comply with Mr Kriticos’ instructions and should have immediately declared a conflict of interest in relation to [the present application] and ceased to represent Mr Kriticos in relation to that application.
3. Upon declaring a conflict of interest I then should have, also contrary to item 1… and also on or before 5 April 2017, paid [the acceptance fees] to preserve my financial interest in [the present application].”
The third Watson declaration is also noticeably brief, and does not add anything of substance to the first and second Watson declarations.
The law
Section 223(2) provides:
“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.”
The meaning of the term “relevant act” is defined by section 223(11) when read in conjunction with regulation 22.11(4).
In Knauf Plasterboard Pty Ltd v CSR Building Products Limited [2018] APO 64 at [6], a delegate of the Commissioner provided the following useful summary (with citations omitted) of the principles arising from the authorities that apply to section 223(2):
The statutory provision to extend time is beneficial in nature and should be applied beneficially.
While the applicant has the burden of placing before the tribunal the circumstances 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 be so described.
For section 223(2)(a) to be enlivened, it must be shown that an error or omission had contributed to cause the failure to perform the relevant act, i.e., there must be a causal connection between the error or omission and the relevant act that is required to be done within the stipulated time.
The applicants for an extension of time must demonstrate that they had an intention to do the relevant act within the time prescribed, and that an error or omission on their, or their agent’s, behalf reasonably could be said to have frustrated that intention. However, there will be exceptional circumstances where the relevant error precluded the formation of a specific intention. In such cases the required causal connection is satisfied if the error contributed to the failure to form the intention to perform the relevant act.
“In order to make out the ‘proper case ... justifying an extension’ ... an applicant would ... have to go beyond a disclosure of the processes by which an agent’s errors came to be committed and would have to expose frankly, inter alia, all the conduct, knowledge, beliefs and mental processes of the applicant ... relevant to an understanding of the way the failure to do the act or take the step occurred, or relevant to an evaluation of the reasonableness of that conduct.”
Furthermore, the ambit of the term “error or omission” in section 223(2) is sufficiently wide to encompass accidental slips, inadvertences and errors caused by faulty reflection, deliberation or mistaken judgement; a failure to exercise due diligence and/or a flaw in mental function in carrying out an intention; and a breakdown in procedure in effecting an intention. However, as cautioned by Jenkinson J in Kimberly-Clark v Commissioner of Patents (No 3) [1988] FCA 421 (Kimberly-Clark) at [10], “[b]y no means every judgment by ‘the person concerned’ or by ‘his agent or attorney’ which can be shown to have been mistaken will answer the description ‘error or omission’ in the ordinary meaning of those words, which in their context carry, in my opinion, a connotation of obviousness in error”.
In contrast, the failure to perform the relevant act cannot itself be the “error or omission” by which the failure occurred, and a deliberate policy or decision that leads to the failure to perform the relevant act does not constitute an “error or omission”.
Consideration
The terms of section 223(2)(a) impose a number of requirements: first, that the request for an extension of time relates to a “relevant act” that was required to be done “within a certain time”, second, that the request to extend the time for performing the relevant act has been made by the “person concerned” and, third, that the failure to perform the relevant act in time was because of an “error or omission” on the part of the person concerned or their agent or attorney.
I now turn to consider whether the second extension request satisfies each of these requirements.
Is the payment of acceptance fees a relevant act that is required to be done within a certain time?
The term “relevant act” is defined by section 223(11) as meaning “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) …” It is evident from regulation 22.11(4) that the prescribed actions that are excluded by section 223(11) do not include the payment of acceptance fees. To the contrary, and as explained below, the regulations further establish that the payment of acceptance fees constitutes “an action in relation to a patent application” within section 223(11), and is an act that is subject to statutory time constraints.
The payment of fees is generally governed by regulation 22.2 which relevantly provides as follows:
“(1) For the purposes of subsection 227(1) of the Act, there is payable to the Commissioner in respect of a matter specified in an item of Part 1 or 2 in Schedule 7 a fee of the amount specified in that item.
(2) The fees are payable as follows:
…………
(d) the fee for acceptance of a patent request and complete specification, under section 49 of the Act, is payable when the application is accepted”.
Items 213(a) and (b) of Part 2 in Schedule 7 specify that the acceptance of an application is a matter in respect of which fees are payable to the Commissioner. The present application was advertised as accepted on 5 January 2017 which, in accordance with regulation 22.2(2)(d), is when the acceptance fees initially became due for payment. The acceptance fees were not paid at this time. However, the failure to pay a fee specified in item 213 of Schedule 7 when it is payable under regulation 22.2(2)(d) does not of itself determine the fate of an application, and instead has the beneficial effect of enlivening the provisions of regulation 22.2I:
“(1) This regulation applies if:
(a) a fee for acceptance mentioned in item 213 of Schedule 7 is not paid when it is payable; and
(b) within 1 month after the fee is payable, the Commissioner invites the person by whom the fee is payable to pay the fee within 3 months after the date that the notice of the acceptance is published under paragraph 49(5)(b) of the Act; and
(c) the fee is not paid within the 3 month period.
(2) The application lapses.”
Thus where acceptance fees are not paid when they become payable under regulation 22.2(2)(d), the above provisions enable the Commissioner to issue an invitation to pay the acceptance fees within the 3 month period allowed in the invitation. As said earlier in connection with the present application, the acceptance fees were not paid within the period allowed by the ITP, that is, by 5 April 2017, as a consequence of which the present application lapsed.
It is clear from the foregoing that the second extension request relates to a relevant act that was required to be done within a certain time.
Has the second extension request been made by the person concerned?
The nature of the person described by the term “person concerned” was considered by a delegate of the Commissioner in The University of Newcastle Research Associates Limited [2001] APO 64 (UNRA). The delegate adopted the findings made by Jenkinson J in an equivalent statutory context (see Atomic Skifabrik Alois Rohrmoser v Registrar of Trade Marks [1987] FCA 22 (Atomic)) that the “person concerned” is the person by whom the relevant act is to be done, and does not include an agent or attorney of the person in whose name such an act was to be done even where responsibility for doing the act had devolved to the agent or attorney. The delegate accordingly concluded that, in terms of section 223(2), the “person concerned” means the applicant or patentee of record.
I accept the correctness of this decision.
Mr Watson has on the other hand submitted that the reasons underlying the decision do not apply here. According to Mr Watson, the “person concerned” is for the purposes of the second extension request the person seeking an extension of time. He argues that this is evident in the fact that:
- Section 223(2)(a) “explicitly states that where the person concerned isn’t the applicant, for example, then the person concerned can also be the applicant’s agent or attorney” [and therefore] “an application for an extension of time isn’t limited to being made by the owner of the application”.
- The decision in UNRA “relates to national phase entry and is based on the wording of S 89 of the Patents Act 1990 as to the onus being on the applicant to take the steps and pay the fees. According to the Act and corresponding Regulations there is no such onus on the patent applicant to pay the acceptance fee”.
- “Contrary to Mr Kriticos’ instructions to not pay the acceptance fee, I could have paid it. IP Australia would not have refused to accept payment … If I was a person who could have paid the acceptance fee, I must therefore also be a concerned person of S 223(2)(a) ”.
- “As noted above, I, and not Mr Kriticos, would have been the person paying the acceptance fee, or in this case requesting an extension of time. Mr Kriticos is therefore not the person concerned because he is not the one that failed to pay the extension [sic] fee”.
Mr Watson also relies for support on Kimberly-Clark at [4] in which reference is made to the predecessor to section 223, namely, section 160 of the 1952 Act:
“The words ‘an act or step in relation to an application for a patent’ are in my opinion apt to comprehend the lodging of notice in writing of opposition for which s.59(1) provides. Neither in sub-section (1) nor in sub-section (2) of s.160 do I discern any reason to restrict the application of those words to acts and steps by the applicant. The misfortunes with which the two sub-sections are concerned may befall any of the several classes of persons to which the Act accords opportunities to participate in ‘the whole process of seeking patent protection in Australia’, and I see no ground, either in the text of the Act or in the policy which s.160 seems to disclose, of distinction between those classes.”
Mr Watson is correct in saying that the Act or regulations do not specify the person by whom acceptance fees are payable which I consequently agree may be paid by a person other than the applicant.
However, Mr Watson’s principal contention that it also follows that the person applying for an extension of time in which to pay the acceptance fees is not restricted to the applicant disregards the language of section 223(2)(a). To reiterate, and with added emphasis, section 223(2)(a) stipulates that the Commissioner may on application made by the person concerned extend the time for doing a relevant act that is required to be done within a certain time where the relevant act has or cannot be done in time by reason of an error or omission on the part of the person concerned or by his or her agent or attorney. As is apparent from the use of the term “or”, section 223(2)(a) clearly draws a distinction between the only person it authorises to apply to extend the time for doing the relevant act, that is, the “person concerned”, and their agent or attorney. They cannot be the same person as effectively submitted by Mr Watson.
The decision in Kimberly-Clark is of no assistance to Mr Watson either since it merely confirms that, as said in UNRA, a “relevant act” does not exclude an act performed by an agent or attorney of the applicant.
The request for a stay of the present proceedings
Mr Watson has alternatively submitted that:
“By asserting … that I am not a person concerned, and therefore not entitled to request an extension of time, the Commissioner is implying that such a person is limited to persons having an ownership interest in the patent application. If that were so, then that decision would have to await the outcome of [the Court proceedings]. And in that case, I would therefore request that this matter be held over to await the outcome of that proceeding. If the Commissioner declines to hold this matter over then that would confirm that the person concerned is not so limited … Under sec 34 of the Act, I can be declared an ‘eligible person’ by the Court under sec 15, thus bringing myself within the ‘class of persons’ referred to above.”
I see no justification for deferring a decision on the second extension request pending the outcome of the Court proceedings.
In the first instance, Mr Watson’s reliance on section 34 is misguided so far as the present application is concerned. The orders that may be made by a Court under section 34 only apply to a person found by it to be an eligible person in respect of a patent. In other words, section 34 does not provide a mechanism by which a person may be declared to be a person who has derived entitlement to a patent application under section 15(1).
Secondly, and given the background to the Court proceedings, it is not apparent to me that the Court has the power to determine whether Mr Watson is entitled to the grant of a patent on the present application, or has in fact been called upon by him to make such a determination.
The Court proceedings have arisen from the relief sought by Mr Watson in relation to a number of patents and patent applications in the name of Mr Kriticos, including those that are directed to what has been designated by Mr Watson’s statement of claim as the Surf Machine Invention. This invention is the subject of the present application. The alleged facts that are said to justify the statement of claim can be relevantly summarised as follows:
Between in or about June 2010 and 21 June 2013, Mr Watson provided patent attorney services to Mr Kriticos in connection with the Surf Machine Invention. The work undertaken by Mr Watson during this period chiefly related to the PCT application.
On 14 June 2013, Mr Kriticos instructed Mr Watson to file national and regional patent applications for the Surf Machine Invention in a number of countries, including Australia.
On 21 June 2013, Mr Watson and Mr Kriticos entered into an agreement (the Patent Share Agreement). The terms of this agreement covered the Surf Machine Invention and other inventions as instructed by Mr Kriticos. The relationship between Mr Watson and Mr Kriticos was one whereby Mr Kriticos held a 12.5% share of the Surf Machine Invention on trust for Mr Watson (the Trust Property), and owed fiduciary duties to him in respect of the Trust Property:
(a) to act in the best interests of Mr Watson; and
(b) to avoid a conflict between his personal interest and his duties to Mr Watson (together the Fiduciary Duties).
- As at 21 June 2013, Mr Kriticos:
(a) had not taken, nor intended to take, any steps towards registering Mr Watson’s 12.5% share of the Surf Machine Invention; and
(b) had not taken, nor intended to take, any steps to put in place a mechanism to compensate Mr Watson for his share of the Surf Machine Invention going forward.
From 21 June 2013 to on or about 4 August 2017, Mr Watson continued to provide patent attorney services in accordance with his obligations under the Patent Share Agreement. This included a significant amount of work during prosecution of the present application.
On or about 11 November 2014, in breach of the Patent Share Agreement and the Fiduciary Duties, Mr Kriticos agreed to sell his business to Whitewater, including royalties from the exploitation of the Surf Machine Invention. The business sale also involved a restraint of trade in relation to the Surf Machine Invention.
On 9 December 2014, Mr Kriticos represented to Mr Watson that he would receive 2.5% of the business sale and 12.5% of the restraint of trade portion of the sale.
On 23 May 2017, Mr Watson demanded reimbursement for the fees he had incurred under the Patent Share Agreement. Mr Kriticos refused to pay the money owed. Mr Watson also remains unpaid for other work he has performed on behalf of Mr Kriticos in connection with the Surf Machine Invention.
On 28 July 2017, or in the alternative on 3 November 2017, Mr Watson notified Whitewater of his ownership interest in the Surf Machine Invention.
On 4 August 2017, in breach of the Patent Share Agreement and the Fiduciary Duties, Mr Kriticos instructed Mr Watson to take no further action in relation to the Surf Machine Invention. The present application was as a consequence allowed to lapse.
On 11 October 2017, Mr Kriticos executed an intellectual property assignment which purportedly assigned his interest in the Surf Machine Invention to Whitewater.
In breach of the Patent Share Agreement and the Fiduciary Duties, Mr Kriticos:
(a)did not ensure that Mr Watson was recorded as a 12.5% owner of the Surf Machine Invention;
(b)has not compensated Mr Watson for the purported assignment of his 12.5% share of the Surf Machine Invention;
(c)has not compensated Mr Watson for Whitewater’s use of his share of the Surf Machine Invention; and
(d)has not put in place a mechanism to compensate Mr Watson for his share of the Surf Machine Invention going forward.
- As a consequence of Mr Kriticos’ breaches of the Patent Share Agreement and the Fiduciary Duties, Mr Watson has suffered loss and damage since he is unable to gain any benefit from the exploitation of the Surf Machine Invention in Australia.
The claims pursued by Mr Watson on the basis of the above assertions include:
- A declaration that Mr Kriticos at all relevant times held 12.5% of the Surf Machine Invention patents and patent applications on trust for Mr Watson.
- Mr Kriticos pay Mr Watson:
(a)12.5% of all income or revenue obtained by Mr Kriticos in relation to or in connection with the Surf Machine Invention;
(b)12.5% of all consideration (other than income or revenue) or any other benefit obtained by Mr Kriticos in relation to or in connection with the Surf Machine Invention; and
(c)2.5% of the sale price of any and all machines falling within the scope of any claim of any patent or patent application in respect of the Surf Machine Invention.
- Damages for Mr Kriticos’ breaches of the Patent Share Agreement and the Fiduciary Duties.
- A declaration that Mr Watson is entitled to be registered as a 12.5% owner of the patents and patent applications, including the present application, relating to the Surf Machine Invention.
It is thus clear that the Court proceedings are not in the nature of an appeal against a decision of the Commissioner regarding Mr Watson’s entitlement to the present application. This issue has never in fact been brought before the Commissioner for determination. On my understanding of the scheme of the Act (specifically, sections 154 and 160), the Court does not in these circumstances have the jurisdiction to determine Mr Watson’s eligibility at first instance. The original jurisdiction appears to instead lie exclusively with the Commissioner prior to grant. Furthermore, the claims and alleged facts on which Mr Watson relies do not suggest to me that he is seeking to be recognised by the Court as a person falling within section 15(1). Rather, the case made by Mr Watson is entirely consistent with the prime objective of being awarded a financial share of the present application (and, more widely, the Surf Machine Invention) as compensation for the loss and damage he has suffered as a result of Mr Kriticos’ alleged breaches of the Patent Share Agreement and the Fiduciary Duties. The reference in the second Watson declaration to Mr Watson’s desire to preserve his “financial interest” in the present application is also supportive of this view.
And lastly, whatever the outcome of the Court proceedings might be will not alter the fact that the failure to pay the acceptance fees in time was not, as discussed below, due to an error or omission by Mr Watson when acting in any capacity.
Returning then to the requirements of section 223(2)(a), Mr Watson cannot on the basis of the foregoing be regarded as the “person concerned” for present purposes. The only person meeting this description is Mr Kriticos who, as said earlier, did not make the second extension request.
Was the failure to pay the acceptance fees in time due to an error or omission on the part of the person concerned or their agent or attorney?
Mr Watson’s evidence establishes that Mr Kriticos had made a deliberate decision not to pay the acceptance fees. This clearly does not constitute an error or omission on the part of Mr Kriticos. To this extent there was no error or omission on the part of Mr Watson either who, as the attorney for Mr Kriticos, had simply complied with his client’s instructions not to proceed with the present application.
However, Mr Watson has submitted that the failure to pay the acceptance fees in time was otherwise due to errors made by him as a person having an interest in the present application. In essence, Mr Watson argues that based on legal advice initially provided to him, he “falsely” believed that his primary duty to Mr Kriticos precluded him from paying the acceptance fees on his own account. He more particularly says that rather than adhering to this advice, he should have instead elected to “declare to Mr Kriticos a conflict of interest … to allow me to act in my interests and contrary to Mr Kriticos’ explicit instructions, and pay the acceptance fee.”
I am not persuaded by this line of argument. On 5 April 2017 Mr Watson received final instructions from Mr Kriticos not to pay the acceptance fees. This is the date on which the period allowed by the ITP for paying the acceptance fees expired. Mr Watson sought legal advice on the same day “regarding me paying the acceptance fee” and was advised “that I shouldn’t”, and that “I couldn’t declare a conflict of interest because that would void my agreement with Mr Kriticos” (the initial advice). He submits that he would have paid the acceptance fees “but for” the initial advice. It is most surprising then that Mr Watson proceeded in any event to advise Mr Kriticos on 30 June 2017 of his interest in the present application. I therefore fail to see why Mr Watson could not have declared a conflict of interest almost three months earlier on 5 April 2017 which he submits would have “allowed” him to pay the acceptance fees on time. The failure to do so is consequently not suggestive of an error or omission on the part of Mr Watson that is causally linked to the initial advice.
Mr Watson has also characterised the errors allegedly made by him as “circumstances beyond his control”. Mr Watson is implicitly referring to the provisions of section 223(2)(b) which are separate to those of section 223(2)(a) on which the second extension request is based. This fundamental distinction aside, I note that as said by Jenkinson J in Atomic at [18]:
“In the context in which it is found, the expression ‘circumstances beyond the control of the person concerned’ does in my opinion designate - and designates only - occurrences which neither the person concerned nor any person acting on his behalf to do the act or take the step could prevent … The section is, I think, correctly described as a force majeure provision.”
It is clear that the initial advice did not “prevent” Mr Watson from paying the acceptance fees on the due date.
I further note in this regard that Mr Watson met with senior counsel on 17 November 2017 and was advised, in direct contrast to the initial advice, that “I should have paid the acceptance fee” (the subsequent advice). Mr Watson had by then already declared a conflict of interest, and it was only on retrospection that he discounted the initial advice in preference for the subsequent advice which ultimately led to the first extension request. However, it is improper to identify actions that, in hindsight, could have been carried out and ascribe to them the characteristics of an error or omission. As said by a Deputy Commissioner in Amicus Therapeutics Inc [2020] APO 4 at [34] (with original emphasis):
“The concerns raised by the delegates go to the point that Amicus appears to have followed a particular strategy for patent protection, but the benefit of hindsight suggested an alternative or additional strategy could have been employed. Section 223(2)(a) is a beneficial provision and it should be exercised beneficially, but it is not a general power of extension to enable potentially mercurial changes in strategy as new information or circumstances come to light or, as it appears in the present case, hindsight suggests a missed opportunity.”
In view of the foregoing, the failure to pay the acceptance fees in time was not caused by an error or omission in any sense on the part of Mr Watson.
This brings me to the final issue to be considered.
The Commissioner’s discretion
The grant of an extension of time under section 223(2) is discretionary: “the Commissioner may … extend the time for doing the act”. The factors to be considered in the exercise of this discretion were summarised in Vangedal-Nielsen v Smith (Commissioner of Patents) [1980] FCA 163, and include whether there has been undue delay in seeking an extension of time. Put simply, the present proceedings have been motivated by Mr Watson’s intention in acting on the subsequent advice to pay the acceptance fees. As a patent attorney, Mr Watson would have been aware that section 223(2) was available to him to give effect to this intention, and of the need to act promptly, yet he waited for over a year and a half before filing a request to extend the time for paying the acceptance fees. Mr Watson has made no attempt to explain the circumstances that have contributed to what otherwise strikes me as an inordinate delay on his part.
This unsatisfactory state of affairs clearly does not justify the exercise of the discretion conferred by section 223(2) in Mr Watson’s favour.
CONCLUSION
I am somewhat sympathetic to Mr Watson’s interests in extending the time in which to pay the acceptance fees. Nevertheless, I have found that the second extension request was not made by the “person concerned”, and that the failure to pay the acceptance fees by the due date cannot be attributed to an “error or omission” on the part of Mr Watson (or, for that matter, Mr Kriticos), as required by section 223(2)(a). The undue delay in seeking an extension of time also weighs against granting the second extension request.
Accordingly, I refuse the second extension request.
O L Haggar
Delegate of the Commissioner of Patents
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