SomnoMed Limited v Atul S. Mehta - [2005] APO 32

ABSTRACTS OF DECISIONS
DECISION OF A DEPUTY COMMISSIONER OF PATENTS
Application : No. 44431/02 in the name of SomnoMed Limited, and an application under s.36 by Atul Mehta

Title: A mandibular advancement device

Action: Directions as to evidence

Decision: Issued 6 July 2005
Abstract

In a s.36 matter, a delegate of the commissioner directed the parties to serve their evidence concurrently. The patent applicant objected, arguing that the requestor should be required to serve his evidence before the applicant should be required to serve theirs. The applicant requested a statement of reasons in the event the Commissioner was not prepared to require the evidence be filed in the manner they requested.
The direction of the delegate – to require the evidence to be served concurrently, was confirmed. The reasons for requiring concurrent serving of evidence in s.36 matters (as a general proposition) discussed.
PATENTS ACT 1990
DECISION OF A DEPUTY COMMISSIONER OF PATENTS
Re:No. 44431/02 in the name of SomnoMed Limited, and an application under s.36 by Atul Mehta

BACKGROUND

This matter concerns the order of filing evidence with respect to an application under s.36 of the Patents Act on patent application 44431/02, which has now lapsed through not being accepted by the due date of 27 May 2005. [The requestor also filed a request under s.32, but since the application has now lapsed, this request is not proceeding.]
Atul Mehta filed a request under s.36 claiming that he was a person entitled to the grant of the patent. [Curiously, this was filed on 27 May 2005 – the final date for acceptance of the application.] The subject matter of the invention is a mandibular advancement device for treatment inter alia of orthodontic conditions, snoring and sleep apnoea. The request included a statement of facts on which the applicant relies. In summary:
- The patent application was originally filed in the name of Richard George Palmisano, who is the named inventor.
- Prior to the priority date, the requestor was conducting research at St George Hospital as part of a Masters degree in Orthodontics with the University of Sydney. The thesis was entitled ‘Treatment of Snorting and Sleep Apnoea Using A Mandibular Advancement Splint’.
- The requestor asserts that during this time he contributed to the initial design of a mandibular advancement device being developed by Palmisano. Those contributions are stated to be the provision of a screw adjustment mechanism, and an alteration of the upper and lower engagement surfaces from the lingual to the buccal side of the posterior teeth.
- The requestor asserts that these two suggestions provided a significant contribution to ‘the reduction to practice’ of the invention disclosed in the application, and are included in the design of the device being commercially pursued by the present applicants SomnoMed – to whom the patent application has been assigned.
The practice and procedure for disputes under s.36 are as determined by the Commissioner (see reg 22.24). In the present case, a delegate of the Commissioner advised the parties that each party would have a concurrent period of two months to file its evidence in support, after which both parties would have an opportunity to file responding evidence.
The patent applicant has objected to this evidentiary process. They want the requestor to file his evidence first, with the applicant filing its evidence in response thereto. They assert that this best provides for procedural fairness. The applicant requested that should I not agree to their proposal, that I provide a statement of reasons. I do not agree with the applicant’s request that the evidence be provided seriatum for the following reasons – which I have set out on an ex parte basis given my rejection of the applicant’s submissions and the absence of objection to the delegate’s directions by the requestor.
In setting the environment for evidence in s.36 matters, the Commissioner is necessarily obliged to provide procedural fairness for all parties to the proceedings. Inevitably the issues that may call for consideration will vary from one case to the next. But generally speaking a range of issues will typically arise in most cases, as follows.
Has the requestor indicated a plausible basis for a claim to entitlement?
Under regulation 3.7, a requestor under s.36 must set out the grounds on which the request is made. It would generally be inappropriate to deal with a clearly spurious claim to entitlement in the same manner as a plausible claim to entitlement; a spurious claim should not be allowed to put the applicant to unnecessary expense. In the present case, the claim to entitlement is prima facie plausible. There is a clear assertion of contribution to the invention under plausible circumstances consistent with the nature of the invention. It may be that there are a number of answers to the assertion – such as agreements signed by the requestor as part of his studies, and the exact nature of the contribution (including the nature of the relationship between the requestor and the named inventor). But this does not detract from the plausibility of the asserted entitlement.
The application has recently lapsed. Has the applicant lost interest in the patent, such that they do not want to be subject to unnecessary expense in defending the action?
Section 36 came about as a recommendation of the Working Party on streamlining patent legislation. [The Working Party arose from Recommendation 23 of the IPAC report that led to the 1990 Act.] In the report of the Working Party, the initial discussion about ‘Applicants and Patentees’ states:
The Working Party is also of the opinion that the current law does not adequately provide for the rights of the owner of the invention where a person with no right to the invention obtains that invention and applies for a patent for it and then allows the application to lapse after it has become open to public inspection.
In recognition of this situation, s.36(2) makes clear that a declaration under s.36 can be made even though the application has lapsed or been withdrawn. Accordingly, proceeding on the basis that the applicant has ‘lost interest’ in the application needs to be treated with some caution.
Where a patent applicant has truly lost interest in the subject matter of an application, it may be appropriate to follow a seriatum approach to the evidentiary process where there is a clear indication of acquiescence to the requestor’s assertions of entitlement – on the basis of cost minimisation and the lack of a real dispute to be resolved.
However in the present case, while the application has lapsed the applicant has not lost interest in the subject matter of the application. Patent Application 2005201456 was filed 6 April 2005 (3 weeks before the present application lapsed through failure to gain acceptance) as a divisional application. This application also names Palmisano as the only inventor. On a cursory comparison, I note that while several passages of the text have been changed (in particular, to provide more statements about what the invention discloses), the text is substantially the same as the present application. Similarly the drawings (while having been redrawn) appear to be identical in all material respects. Consequently it would seem that the applicant has a continuing desire to obtain a patent for the subject matter of the present application. And there is no apparent acquiescence with regard to the assertions of the requestor.
Is it appropriate for the patent applicant to set out the basis for its claim to entitlement?
Is s.36 disputes there can be situations where a party to the proceedings is not fully familiar with the circumstances of the invention. This can particularly arise with inventions made by former employees – with questions about whether the inventor hid their activities from their employer at the relevant time. There is no indication that this type of situation applies here. The named inventor was the original applicant, with entitlement being assigned to the present applicant by way of an assignment to Amelia Blue Pty Ltd (with Palmisano signing the assignment deed both as assignor, and as director of the assignee) and thence to the present applicant SomnoMed Limited. In this situation, it is reasonable to expect the applicant to know the full factual basis on which they claim entitlement to the invention – and in particular the basis on which it asserts that the named inventor was the only inventor of the invention.
In Stack v Davies Shephard 34 IPR 117 I stated:
A patent may only be granted to an eligible person (section 15). When granting a patent, the Commissioner normally does not require proof of entitlement; rather the patent is granted on the basis of the prima facie claim to entitlement that the applicant provides in the `notice of entitlement' required by regulation 3.1(2). In my view, where there is proper cause to query the entitlement of the patentee it is incumbent upon them to provide substantiation of their asserted entitlement to the grant of a patent. Inability to substantiate entitlement must prima facie leave it open to find that the patentee was not entitled to be granted the patent.
In the present case I think it is reasonable, given the request under s.36, for the applicant to set out the basis on which it asserts entitlement. I would expect (given the grounds of the s.36 request) that this would include the basis on which it asserts that Palmisano alone was the inventor.
What approach provides both parties with procedural fairness?
In many matters before the Commissioner (e.g. s.59 opposition proceedings) the applicant does not properly understand the case it has to mount until it has been served with the opponent’s evidence.
Ownership/inventorship issues are significantly different. The s.36 requestor has to set out the grounds on which the request is made in order to initiate the proceedings (regulation 3.7). That statement of grounds will need to set out a plausible case before the Commissioner would be prepared to put either party to the expense and inconvenience of putting evidence together in the matter. In my view the requestor has clearly met this threshold. The consequence of this is that the applicant has an outline of the case it has to answer, and the requestor has no knowledge about the basis of the applicant’s claim to entitlement other than the unsubstantiated assertion that is usually provided on the Notice of Entitlement. It might therefore be suggested that the patent applicant should be the first party required to file evidence – on the basis that they know (in broad terms) the allegation they have to answer, and that it is appropriate that they substantiate their asserted claim of entitlement.
However other considerations arise. Firstly, while the requestor cannot prepare any evidence to deal with the applicant’s assertion of entitlement until the basis of that assertion is set out in detail, the patent applicant is in a somewhat similar position with respect to dealing with the requestor’s assertions of entitlement. And this situation is open to accusations (rightly or wrongly) that whoever is second to provide evidence in the proceedings can merely ‘tailor’ their evidence to rebut the other person’s assertions, rather than establish the basis on which their entitlement rests.
Having regard to these considerations, I think that generally speaking the approach that best gives rise to procedural fairness to both parties (assuming a plausible claim to entitlement) is for both parties to concurrently file their evidence in support of their claim to entitlement. In this manner, both parties have to set out the basis of their claim to entitlement prior to the other party having the opportunity to rebut that claim. In my view it is quite fair for a patent applicant, faced with a plausible challenge to their entitlement, to be required to set out their claim to entitlement. Similarly, it is quite fair for a s.36 requestor to be required to set out their claim to entitlement. And in my view it is quite fair and appropriate for both parties, in the first instance, to substantiate their claim to entitlement without the benefit of a detailed knowledge of the other party’s claim to entitlement – after all, the necessary information establishing their own entitlement ought to be inherently within their own knowledge. In my view, to require one party to substantiate their claim to entitlement before the other party is required to file its evidence has the real prospect of providing procedural advantage to the party that is second to file evidence.
Accordingly, I confirm the direction given by the delegate – that each party is to prepare its evidence to substantiate their claim of entitlement concurrently. I specifically reject the applicant’s desire of the requestor having to file his evidence before the applicant needs to prepare its evidence in response – as potentially denying procedural fairness to the requestor. [Indeed, if it was appropriate for the evidence of one party to be filed before that of the other party, I think it would be most appropriate for the first party to be the patent applicant – such that the basis of their claim to entitlement that they assert in the patent application is substantiated.]
Having regard to the need to resolve this issue, and the time that has elapsed since the delegate issued the direction about when evidence was to be served, it is appropriate that I re-set the time for serving evidence in these proceedings. Accordingly the time for both parties to file their evidence in support (in two copies) is re-set to 7 September 2005. The remainder of the proceedings will proceed (unless otherwise directed) on the basis of the directions contained in the delegate’s letter of 9 June 2005.
D Herald
Deputy Commissioner of Patents
6 July 2005
Patent attorneys for the applicant : Spruson & Ferguson, Sydney
Patent attorneys for the opponent : Davies Collison Cave, Sydney