Rock Engineering Pty Ltd v a. Noble & Son Limited

[1990] APO 38

PATENTS ACT 1952

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Application for restoration of patent application No. 558348 by ROCK ENGINEERING PTY. LTD. and opposition thereto by

A. NOBLE & SON LIMITED

Background
         The Office advertised the acceptance of 558348 in the Official Journal of 29 January 1987.  Subsequently, A. Noble & Son Limited lodged notice of opposition under s.59.  Rock Engineering Pty Ltd failed to pay the continuation fee falling due on 21 May 1988; as a result, the application lapsed on that date.  The Office advertised the lapsing in the Official Journal of 15 June 1989, and advertised an application made pursuant to s.47E by Rock Engineering in the Official Journal of 13 July 1989.  Noble opposed the application for restoration but lodged no evidence in support of the opposition within the time allowed by the regulations.  In fact, the only evidence on file in this matter is a single statutory declaration lodged by Rock Engineering constituting its evidence in answer.  I heard the matter during the scheduled Melbourne sessions, in August 1990.  Mr Peter Smith, Patent Attorney of Smith Shelston Beadle, appeared for the applicant.  Mr H.K. Schulze, Patent Attorney of Collison & Co, sent submissions by facsimile transmission to me at Melbourne on behalf of the opponent in lieu of making an appearance.

The Application for Restoration
         On 15 June 1989, A. Tatlock & Associates*, Patent Attorneys, lodged at the Office an application for restoration of 558348 which had lapsed pursuant to s.47D(1).  A statutory declaration made by Mr Tatlock accompanied the application.  This declaration is quite brief, but makes the following points:

.in May 1988 A. Tatlock & Associates were instructed to pay the "renewal fee in respect of this patent" (sic);

.prima facie, the firm's records show that the fee was paid;

.in March 1989 the firm was instructed to pay the next year's "renewal" (sic) fee, which was then paid;

.the Office subsequently notified the firm that the "patent" (sic) had lapsed the preceding year through non‑payment of the "renewal" (sic) fee;

.on checking the firm's records, Mr Tatlock was not able to find an indication that the fee due in May 1988 had been forwarded to the Patent Office;

.it was never the intention of the applicant to permit this "patent" (sic) to lapse, "and the fact that it did so lapse was due to an error in this Office".

The evidence in answer consists of a single statutory definition by Mr Tatlock which is much more detailed than his first declaration.  The latter includes the following paragraphs:

_________________________________________________________________

*At this time A. Tatlock & Associates were prosecuting the application.  Subsequently, the applicant changed the address for service to Smith Shelston Beadle.

"6.Each month, amongst other reminders printed, we also print a list of patents and applications on which annuities are payable, but for which we have not

received instructions.  These are checked by my assistant, and if necessary individual contact is made with the client.

7.Patents and applications which should be on the "Fee Due" list are not incorporated onto this list as, when the instructions are received, the annuity date for the particular patent or application is automatically updated.

8.In mid 1988, we were in the process of changing computer systems, and as the records from one system were not compatible with those of the other system, it was necessary to transfer the data from the first system, in a completely unformatted form to the second system and then to re‑write this data into records which could be read on the second system.

9.Whilst there was an endeavour to duplicate the systems for a period this was very difficult to do because of the continual updating so, effectively, as particular record groups were transferred, so the updating was mainly effected on the new rather than the old records, although the Fee Due list was prepared from both computers.

10.Also, a member of staff maintained a list of matters which were done on the old system notwithstanding the fact that the records had been transferred, or were in the process of transfer to the new system and these were subsequently updated onto the new system.

11.My personal assistant, who had been with the firm for some twelve (12) years left her employment later in 1988 so it is not possible to obtain from her any indication of what she may believed to have happened in this particular case.

12.Prima facie as indicated earlier if the payment of the fee was placed on the fee due record this should have been checked both before the event and also after the event as it should not be removed until a check has shown that a particular fee has been paid."

In his submissions Mr Schulze attacks both of Mr Tatlock's declarations, and argues that they do not support the grounds of restoration specified in s.47E.  About the first declaration he concludes that it is:

"... vague, and does not give any supporting evidence to support the statements made therein ... Overall the former Statutory Declaration is so vague and insubstantial that it should be complegely ignored."

About the second declaration, Mr Schulze makes various submissions, of which the following is probably the most important, and is typical of the character of the remainder:

"In paragraph 15 Mr Tatlock positively states that "instructions were received" but does not give any proof or evidence or even a hint or suggestion as to what form of from where an instruction, if any, might have come.  It would appear to be open to the Hearing Officer to decide that in fact no such instruction was ever received. ...

No evidence has been adduced as to the intentions of Rock Engineering Pty Ltd or the state of mind of any person associated with that company at the relevant time.  Without positive evidence the only conclusion that can be drawn is that there was no intention to pay the fee at the necessary time to continue the Patent Application.  The fact that this matter is now being pursued does not mean that at that time there was the necessary intention."

From this Mr Schulze concludes that as a case has not been made out to the effect that the failure to pay the continuation fee by the due date was, in terms of the Act, unintentional there can have been no error or omission involved in that failure, again in terms of the Act.
         Mr Schulze also criticises Mr Tatlock's declaration on the matter of error or omission.  He contends:

"On the matter of the error or omission or alleged error or omission it is necessary to distinguish between these terms.  Both of the words are used in the Act and therefore they must be intended to mean something different from each other.  In my submission "error" means the situation when something has been done but has been done wrongly, a mistake.  An "omission" occurs when something is not done at all.  It is our further submission it is not justified to say that an omission has occurred if there was no intention to do the act in the first place.

Clearly the fact that there was no continuation fee paid or application to pay a continuation fee lodged means that no error could have occurred in the making of that continuation.  As we have indicated earlier there is no proof that there was an intention to continue the Patent Application and hence it is difficult to see how there could have been an omission as is required in the Act."

Finally, Mr Schulze's submissions are critical of the manner in which both declarations have been drawn; for example, he makes these points:

.Mr Tatlock incorrectly refers to the application in suit as a "Patent", and to the continuation fee as a "renewal fee" (both declarations);

.in paragraph 5 (first declaration) Mr Tatlock uses the word "application" in a context where the word "applicant" should have been used;

.Mr Tatlock uses the first person plural "We" in both declarations which tends to indicate that he was not in a position to personally testify on the reasons which led to the non‑payment of the continuation fee.

Decision
         For the purposes of this action, the relevant portions of s.47E read:

"(4)If the Commissioner is satisfied that the failure to make the request or to pay the continuation fee, as the case may be, within the prescribed time was unintentional and resulted from an error or omission on the part of the applicant or of his agent or attorney or from circumstances beyond the control of the applicant and that there has been no undue delay in the making of the application for restoration, the Commissioner shall advertise the application for restoration in the Official Journal, but if he is not so satisfied, he shall refuse the application for restoration.

(5)A person interested may, within such time as is prescribed, give notice to the Commissioner of opposition to the restoration and shall serve a copy of the notice on the applicant.

(7)If notice of opposition is so given, the Commissioner shall hear the case and either restore the lapsed application or refuse the application for restoration."

Mr Schulze's criticisms of the first Tatlock declaration are not relevant to this action, the applicant's supporting evidence is constituted by the second Tatlock declaration.  It is true that the first declaration is somewhat brief.  However, in my view, advertisement of an application for restoration is, in effect, a conditional acceptance of the application for restoration subject to review in the light of further evidence which may be lodged on opposition.  Accordingly, an application for restoration must be accompanied by sufficient evidence to enable the Commissioner to satisfy himself that the requirements for restoration have ‑ prima facie ‑ been complied with.  In this case the Commissioner (i.e. his delegate) was so satisfied in regard to the first declaration.  Accordingly, the delegate advertised the application for restoration.
         It is clear from s.47E(4) that certain conditions are precedent to a successful action for restoration of an application which has lapsed pursuant to s.47D.  These are:

(i)that the application has lapsed due to failure to pay a continuation fee within the prescribed time;

(ii)that the failure to pay the fee was unintentional;

(iii)that the failure to pay the fee resulted from an error or omission on the part of the applicant or of his agent or attorney or from circumstances beyond the control of the applicant;

(iv)and that there has been no undue delay in the making of the application for restoration.

It is clear from the facts that the first condition is satisfied.
         Earlier in this decision I have quoted from Mr Schulze's submissions concerning the second condition.  In brief, Mr Schulze concedes that Mr Tatlock positively states that "instructions were received" (to pay the continuation fee) but concludes that in the absence of evidence to the contrary, the failure to pay was not unintentional.
         I take an opposite view to this.  Mr Tatlock deposes ‑ in a statutory declaration ‑ that he did receive instructions to pay the fee.  In my view, it would be better if he could have indicated how and when the instructions were received, and if received in writing, annexed a copy thereof to his declaration.  Alternatively, the attorneys presently prosecuting the case could have obtained a declaration from the relevant officer in the applicant company.  That they did not do so is not evidence that the applicant had no intention to pay at the relevant time, as stated by Mr Schulze.  Briefly put, absence of evidence is not evidence of absence.  That is, Mr Tatlock has made a positive statement about receipt of instructions, and in the absence of any evidence to the contrary (the supply of which falls upon the head of the opponent in actions such as this), I must conclude that the failure to pay the fee was indeed unintentional.
         The third condition concerns the circumstances leading to the actual failure to pay the fee by the due date.  It is clear from Mr Tatlock's declaration that the concern is with error or omission, and not circumstances beyond control.  The declaration sets out information on the systems used in Mr Tatlock's firm ‑ see (for instance) paragraphs 6‑12 quoted earlier in this decision.  From a study of the declaration I conclude that the systems would normally have been adequate to ensure payment by the due date.  The fact that such payment did not occur is clearly the result of an error or omission, even though Mr Tatlock is unable (in the declaration) to identify the particular error or omission (whether one or more).  I have pointed out earlier in this decision that Mr Schulze has argued that the absence of intention to pay the fee, there can have been no in error or omission involved in not paying.  No doubt this conclusion is correct, however it is based on a premise which I have already rejected.
The fourth condition to be considered is that of undue delay in making the application for restoration. In determining whether the condition that the application for restoration was made without undue delay, the relevant period of delay to be assessed is that commencing from the time when the application for restoration could first be made and extending until the time the application for restoration was made: see Board of Control of Michigan Technological University v Commissioner of Patents (1982) 52 AOJP 1992 (AAT); 34 ALR 529 (Federal Court); (1982) 40 ALR 577 (HC).
         Under the terms of s.47E, the entitlement to apply for restoration arises immediately an application for a patent has lapsed.  However an application cannot be deemed to have lapsed under s.47D.(1) until the expiry of the extension period provided in s.47D.(2) ‑ a period of six months.  Therefore, the entitlement to apply for restoration does not commence until the expiry of that extension period.
         In the present case therefore, the date upon which an application for restoration could first be made was 21 November 1988.  However, the notice of lapsing appeared in the Official Journal of 15 June 1989.  The situation is similar to that considered by the Administrative Appeals Tribunal in the University of Michigan case, supra, where an application for restoration of the patent application was lodged two years after the date of advertisement of lapsing in the Official Journal.  The Tribunal stated:

"Advertisement in the Journal may not be notice to an applicant personally, but, nevertheless, it was notice to the world at large including the applicant.  Its effect was to give public notification of the lapsing of the patent.  If an application for restoration was to be made thereafter, it had to be made without undue delay".

Therefore, while the delay can be said to commence on 21 November 1988, that delay could not possibly be said to be undue, until some time after the date of advertisement of lapsing in the Official Journal, i.e. 15 June 1989.
         In my view, Mr Schulze's submissions on the matter of undue delay are somewhat simplistic.  They are (in toto) as follows:

"Another matter to be decided is whether there has been undue delay.  It would seem to us that with the system described by Mr Tatlock in his latter Statutory Declaration as there was a "letter to the client" prepared then when the Certificate of continuation had not been received within a few months of the correct time for the continuation to be paid then alarm bells should have rung.  It is too late a year later to find out that the act has not been done.  It is our submission that there has been an undue and unnecessary delay in making application for restoration and that it should not be allowed on this ground."

As I understand the judgements of the Administrative Appeals Tribunal, Federal Court and High Court in the Michigan case, supra, a delay constitutes undue delay if it was unreasonable in all the circumstances.  In this instance the circumstances can conveniently be listed:

.due date for payment of continuation fee (s.47D.(1)) ‑

21 May 1988

.extension period expiry date (s.47D.(2)) ‑ 21 November 1988

.date lapsing advertised in the Official Journal (s.47E.(1)) ‑ 15 June 1989

.date of application for restoration (s.47E.(2)) ‑ 15 June 1989

.date application for restoration advertised in the Official Journal (s.47E.(4)) ‑ 13 July 1989.

Thus the applicant applied for restoration on the same day that lapsing was advertised.  I agree with Mr Schulze that the applicant ought to have been aware of the date of lapsing some time prior to the advertisement thereof, if Mr Tatlock's office systems were functioning as stated.  However, having regard to the law to which I have referred above, I cannot agree with his conclusion.  I find that there has been no undue delay.
Conclusion
         I have found that the applicant's application for restoration meets the requirements of s.47E, and therefore I restore the application, as of the date of this decision.  Consequentially, the s.59 opposition resumes as of that date.  I award costs against A. Noble & Son Limited.

(J.L. ROVETA)