Stephen Dall v Transpiro Pty Ltd
[2023] APO 4
•24 January 2023
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Stephen Dall v Transpiro Pty Ltd [2023] APO 4
Patent Application: 2017268701
Title:Non-invasive sampling
Patent Applicant: Transpiro Pty Ltd
Opponent: Stephen Dall
Delegate: L. F. McCaffery
Decision Date: 24 January 2023
Hearing Date: Written submissions filed on 26 September 2022, 6 October 2022 and 17 October 2022
Catchwords: PATENTS - extension of time to request examination – Opponent’s actions led to the failure to request examination – extension is appropriate – opposition is unsuccessful – extension under s223(2)(a) granted – parties given opportunity to provide detailed submissions on costs.
Representation: Patent attorney for the Applicant: Spicer Spicer Pty Ltd
The opponent represented himself
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2017268701
Title:Non-invasive sampling
Patent Applicant: Transpiro Pty Ltd
Date of Decision: 24 January 2023
DECISION
The opposition is unsuccessful.
I grant an extension of 6 months under section 223(2)(a) to request examination.
Parties provided 2 weeks to make detailed submissions on costs.
REASONS FOR DECISION
Background
Australian application 2017268701 (the application) in the name of Transpiro Pty Ltd (the Applicant) was filed under the provisions of the PCT on 22 May 2017 and has an earliest priority date of 21 May 2016. The application entered the national phase on 21 December 2018. On 22 September the Commissioner directed that the Applicant request examination (the Direction). As no request was received by 22 November 2020 the application lapsed.
On 23 April 2021, the Applicant filed a request for an extension of time for 6 months to request examination (the extension), pursuant to the section 223(2)(b) (circumstances beyond the control of the person concerned). The request was advertised for opposition purposes on 3 June 2021.
Mr Stephen Dall filed a notice of opposition to the grant of the extension on 29 July 2021. A statement of grounds and particulars was filed on 27 August 2021.
On 23 September 2021 the Applicant filed an application for dismissal of the opposition on the grounds that it had no reasonable prospect of success. On 13 October 2021 a delegate of the Commissioner refused the application for dismissal, stating that Mr Vitale was reappointed as Director on 30 June 2020 and it was at least plausible that Mr Vitale could have investigated the status of the application and made any necessary changes to the address for correspondence. They therefore did not consider the opposition had no reasonable prospects of success. The Applicant responded on 19 October 2021 and stated that the reasons provided by the delegate led them to seek a direction that the application for an extension proceed under both s223(2)(a) (error or omission) and s223(2)(b). A direction to this extent was made on 14 December 2021, together with a revised timetable for evidence. Evidence in the matter was completed on 16 June 2022, and the matter was subsequently set for hearing by written submissions. These were completed on 17 October 2022.
On 18 November 2022 I wrote to the parties requesting further information and/or clarification of several issues and invited the parties to provide such material within 2 weeks. Both parties provided a submission in response to my queries. A further week was available for parties to provide a response to the material provided by the other party. The Applicant provided a response to Mr Dall’s submissions. Mr Dall did not respond to the Applicant’s submissions.
The evidence
The following evidence has been relied on in the opposition:
| Request for s223(2)(b) | |
| 23 April 2021 | Mr Neal Schutte (Schutte) and Annexures NS-1 to 14. |
| 23 April 2021 | Mr Santino Vitale (Vitale 1) and Annexures SAV-1 to 4. |
| Request for s223(2)(a) | |
| 14 January 2022 | Mr Santino Vitale (Vitale 2) and Annexures SAV-5 to 7. |
| Evidence in Support | |
| 13 September 2021 | Mr Stephen Dall (Dall 1) and Annexures A to D. |
| 19 March 2022 | Mr Stephen Dall (Dall 2) and Exhibits A to C. |
| Evidence in Answer | |
| 17 May 2022 | Mr Santino Vitale (Vitale 3) and Annexure SAV-8. |
| Evidence in Reply | |
| 16 June 2022 | Mr Stephen Dall (Dall 3) and Annexures SMD-1 to 30. |
The relevant law
The present matter is governed by section 223(2) which states:
“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.”
A “relevant act” for the purposes of section 223 is defined in section 223(11) and means:
“an action (other than a prescribed action) in relation to a patent or patent application, or any proceedings under this Act (other than court proceedings), and includes the making of a Convention application within the time allowed for making such applications.”
A convenient summary of the principles pertaining to the application of s223 was given by the delegate in Knauf Plasterboard Pty Ltd v CSR Building Products Limited as follows:[1]
[1] Knauf Plasterboard Pty Ltd v CSR Building Products Limited [2018] APO 64 at [6] – [8].
“The following principles for applying the provisions of section 223 are derived from decided cases:
(i) The statutory provision to extend time is beneficial in nature and should be applied beneficially.[2]
[2] ReSanyo Electric Co Ltd and Commissioner of Patents [1996] AATA 832, (1996) 36 IPR 470 at 479 [16].
(ii) 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.[3]
[3] Ibid.
(iii) 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.[4]
(iv) 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.[5] 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.[6]
(v) ‘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.’[7]
The term ‘error or omission’ in section 223 encompasses accidental slips, inadvertences and errors caused by faulty reflection;[8] an unexpected failure to exercise due diligence and/or a flaw in mental function in carrying out an intention;[9] and a breakdown in procedure in effecting an intention.[10] Accordingly, the phrase ‘error or omission’ has a broad scope.
In contrast, the failure to perform the relevant act cannot itself be the ‘error or omission’ by which the failure occurred[11] and a deliberate policy or decision that leads to the failure to perform the relevant act does not constitute an ‘error or omission’.”[12]
[4] Kimberly-Clark Ltd vCommissioner of Patents (No 3) [1988] FCA 421; (1988) 13 IPR 569 at 579 [9], 582 [15]; Re Lazer Safe Pty Ltd and Commissioner of Patents [2001] AATA 967 at [11].
[5] Ibid.
[6] Re Apotex Pty Limited and Commissioner of Patents [2008] AATA 226 at [21].
[7] Kimberly-Clark Ltd v Commissioner of Patents (No 3), supra at 583-584 [17].
[8] Ibid at 579 [9].
[9] Total Peripherals Pty Ltd v Commissioner of Patents [1998] AATA 784 at [14].
[10] Oz Technology, Inc v Boral Energy Ltd [1999] APO 8.
[11] Kimberly-Clark Ltd v Commissioner of Patents (No 3), ibid at 580 [11].
[12] Re Weir Pumps Ltd and Commissioner of Patents and Stork Pompen BV [1988] AATA 331; (1988) 13 IPR 163 at 166-167 [9].
10. In Johnson v Weingarth,[13] the Deputy Commissioner further observed that an error or omission does not include changes of mind with the benefit of hindsight,[14] and misapprehension or ignorance of the law does not constitute an error by itself.[15]
[13] Mark Johnson v Paul Weingarth, Spiro Rokos and Paul Scully-Power [2020] APO 32 at [6].
[14] Amicus Therapeutics, Inc. [2019] APO 4 at [34] and Magnum Magnetics Corporation [2019] APO 3 at [33].
[15] Kmart Australia Limited [2011] APO 2.
11. Turning to the issue of ‘circumstances beyond control’, Jenkinson J considered circumstances beyond control in Re Atomic Skifabrik Alois Rohrmoser v Registrar of Trade Marks in the context of the Trade Marks Act, and concluded:[16]
“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 operations of nature and the activities of strangers may result in such occurrences. So, too, may the acts and omissions of certain independent contractors engaged by the person concerned or by his agent, as for example the carrier of mail or the office cleaner, either of whom causes the loss or destruction of a document to be filed. But the acts or omissions of the agent who on behalf of the person concerned is to do the act or take the step are not occurrences of the description specified in paragraph 131(1)(a), in my opinion. Nor, in my opinion, are the acts or omissions of that agent’s servants. The section is, I think, correctly described as a force majeure provision.”
[16] [1987] FCA 22 at [18].
12. This approach was cited with approval by the Administrative Appeals Tribunal in Jiejing Pty Ltd v Commissioner of Patents and Ron Thomas and Allan Garnham.[17]
[17] [1995] AATA 100 at [104].
13. These are the principles that I will apply in the present determination.
A timeline of events
14. As an initial point I note that the present matter is unusual inasmuch as the opposition to the grant of the extension of time is being made by a former director in the company who, based on my analysis of the circumstances, appears to be responsible for the actions that led to the failure to request examination. Indeed, as noted by the Opponent’s own solicitor, “the professional relationship between Mr Dall and Mr Vitale is long and problematic”.[18] This is perhaps reflected in the present case, and much of Mr Dall’s evidence has little direct relevance to the issue in question. This, together with, at times, unclear and inconsistent statements by Mr Dall, who was unrepresented in his opposition, has not assisted in the present determination.
[18] Dall 1, exhibit D.
15. Based on the evidence from the parties, a timeline of key events is as follows:
Mr Dall and Mr Vitale were joint shareholders and co-Directors of Transpiro.[19] Mr Vitale was the majority shareholder. Mr Vitale had devised the present invention towards the end of 2014 and the company was formed to commercialise and exploit the technology.[20] The present application appears to be the only IP owned by Transpiro.
[19] Vitale 1 at [4]-[5].
[20] Vitale 1 at [3]-[4].
Patent application 2016901926 was filed on 21 May 2016 and PCT patent application PCT/AU2017/050476 was filed on 22 May 2017.[21] Both were in the name of Transpiro and Mr Vitale was named as sole inventor. Mr Neal Schutte of Patenteur Pty Ltd was the Applicant’s patent attorney at the time.
[21] Schutte at [3].
The business relationship broke down around August 2017. No specific details of this breakdown were provided, but I do not consider these relevant to the present matter in any case. Mr Dall subsequently removed Mr Vitale as a Director of Transpiro on 12 September 2017.[22]
[22] Vitale 2 at [9].
Around the beginning of December 2017, Mr Schutte became aware of a possible conflict of interest due to the breakdown of the business relationship.[23] He sought clarification of the situation with Mr Dall and Mr Vitale, and following their conflicting responses advised them of the need for agreement for future instructions if Patenteur were to continue to represent Transpiro.[24]
[23] Schutte at [4].
[24] Exhibit NS-1.
Innovation patent 2018102030 was filed on 7 December 2018 by Mr Dall. Mr Dall indicated that the subject matter of this patent is closely related to the invention, to the extent that he considered it would be an “infringement” of the present application.[25] The email contact given for the patent was Mr Dall’s Transpiro email address,[26] but Mr Dall is named as the inventor and applicant/patentee.
[25] “Covering letter basis for opposition” filed 2 September 2021.
[26] “Opponent’s response to further information 03-12-22” filed 3 December 2022.
The due date for entry of the present application into the national phase in Australia was 21 December 2018.[27] During November/December 2018, Mr Schutte received conflicting instructions from Mr Dall and Mr Vitale regarding the intention to proceed with national phase entry of the application.[28] At this time, Mr Schutte was unable to obtain formal clarification as to who the authorised representatives of Transpiro were.[29]
[27] Schutte at [7].
[28] Schutte at [4]-[9].
[29] Schutte at [6].
Following an email from Mr Vitale on 20 December 2018 in which Mr Vitale reiterated his desire that national phase entry proceed, Mr Schutte advised the parties that he would act to retain the rights by proceeding with national phase entry irrespective of the dispute. Mr Vitale confirmed his instructions in a phone call on 21 December 2018 and provided the necessary funds.[30]
[30] Schutte [7]-[9].
Mr Schutte attempted to file a request to enter the national phase later on 21 December 2018 but received an error message stating that the request was not valid as the application was already entering or had already entered the national phase.[31] Mr Schutte stated that he thought this was a system error as he was not aware of the application being handled by any other party. He therefore used an alternative route in the eServices system[32] to file the necessary documents and ensure timely national phase entry was achieved.[33]
[31] Exhibit NS-5.
[32] The eServices system was replaced around October 2020 by the Online Services system. The previous system name has been used in this decision. The system change did not require any additional or different actions by customers and had no impact on the present case.
[33] Schutte at [10].
On 26 December 2018, Mr Dall emailed Mr Schutte to reiterate that Mr Vitale had no authority in Transpiro matters. Mr Schutte noted that he had discussed the national phase entry with IP Australia and that Patenteur was not the agent for the national application. In the email exchange Mr Dall confirmed that a new agent had been recorded.[34]
[34] Schutte at [11].
On 2 January 2019 Mr Schutte sent an email to Mr Vitale forwarding a copy of IP Australia’s national phase entry filing receipt. Mr Schutte also informed Mr Vitale that Patenteur was not the agent on record for the application and therefore could not act for Transpiro unless formally recorded as agents for the case. Mr Schutte also advised Mr Vitale that the final due date for requesting examination (being 5 years from the filing date) was 22 May 2022 and that the first renewal fee was due on 22 May 2021.[35]
[35] Exhibit NS-8.
In February 2019, Mr Vitale commenced actions to be reinstated as director. This culminated in the Supreme Court of Western Australia making orders to reinstate Mr Vitale as a Director, cancel shares issued to third parties, and restore Mr Vitale’s shareholding to 51% effective 30 June 2020. This was to be done within seven days of the orders.[36]
[36] Exhibit SAV-3.
During July 2020, Mr Dall notified ASIC that Mr Vitale was appointed as Secretary rather than Director. This was rectified in July 2020 to record Mr Vitale as a Director. An extension was sought by Mr Dall in August 2020 to comply with the orders to rectify the shareholdings. The shareholdings were eventually rectified in October 2020.[37]
[37] Ibid.
Mr Vitale commenced action to pursued indemnity costs in August 2020. These were awarded to Mr Vitale in November 2020.[38] Between December 2020 and April 2021, Mr Vitale sought access to financial records for Transpiro but encountered difficulties obtaining access to the documents.[39]
[38] Ibid.
[39] Vitale 2 at [10].
A Direction to Request Examination was issued by IP Australia on 22 September 2020. The application lapsed as the request for examination was filed not filed by 22 November 2020.
The first renewal fee was due in May 2021, and Mr Vitale contacted Mr Schutte on 6 April 2021 to enquire about the status of the patent application. He was informed the patent application had lapsed due to non-compliance with the Commissioner’s direction before its due date.[40]
A request for an extension of time under section 223(2)(b) to request examination was filed on 23 April 2021. A request for a change of agent and address for service/correspondence was filed at the same time. Following consideration by the delegate, the request for an extension of time was advertised for opposition purposes on 3 June 2021.
A notice of opposition was filed on 29 July 2021 by Mr Dall. The contact email address and customer account used by Mr Dall to file the notice were the same ones used for the present application at that time. IP Australia queried this with Mr Dall, and on 9 August 2021, he provided a different customer account and email contact for the opposition.
[40] Exhibit NS-9.
16. Details of the evidentiary process are provided in the background above.
17. In their submissions for the hearing, the Applicant noted the difficulties encountered by Mr Schutte in requesting entry into the national phase and submitted that that based on the address listed on the filing receipt, being the post office box established by Mr Dall, this difficulty resulted from Mr Dall filing an earlier request without informing Mr Schutte or Mr Vitale.[41] In response, Mr Dall did not directly address whether he had actioned the national phase entry of the present application, but submitted that the Applicant had provided no evidence that he was receiving correspondence from IP Australia and wilfully hiding it from the Applicant.[42]
[41] Applicant’s submissions in answer for the opposition, dated 10 October 2022, at [22].
[42] Opponent’s submissions in reply to Applicant’s submissions, dated 17 October 2022.
18. In view of Mr Dall’s submissions, and in order to determine the specific circumstances that resulted in the failure to request examination, I reviewed the IP Australia system records of the correspondence and became aware of details that were relevant to the present determination, including details of the national phase filing and the subsequent correspondence from the office. These had not been previously raised in the matter, so I sought further details and/or clarification from the parties.
19. In a letter to the parties dated 18 November 2022, I noted that the request to enter the national phase was filed on 21 December 2018 at 1:17AM (Canberra time). The applicant was listed as Transpiro Pty Ltd, Mr Dall was listed as the contact person for the application, and the addresses for correspondence and service were given as a post office box in Western Australia. The filing receipt issued in eServices to Customer ID 1911841907, Customer name Earthstep WA on 24 December 2018 (hereinafter referred to as the Earthstep WA account).
20. The Direction to Request Examination was also sent to the Earthstep WA account on 22 September 2020. One of the issues in dispute was whether Mr Vitale had access to the post office box listed for the application, but IP Australia generally does not send physical correspondence to customers. Instead, an alert email is sent to the customer to advise them that they have correspondence for viewing online. The post office box issue therefore has little relevance to the present determination.
21. The IP Australia systems indicated that an alert email for the Direction was sent on 22 September 2020 to what appeared to be Mr Dall’s personal email address. A follow up email generally issues where the customer does not open the correspondence within a certain time, and in the present case a follow up email issued on the Direction on 20 October 2020. An alert email was subsequently sent on 4 December 2020 in association with correspondence advising the Applicant that the application lapsed due to a failure to request examination. A follow up email issued on 1 January 2021, before a final email on 4 April 2021 confirming that the application had lapsed.
22. Another alert email was sent on 27 April 2021 in relation to correspondence associated with the change of the agent of record to Patenteur. In contrast to the earlier correspondence on the application, no follow up email issued for this correspondence, which indicates that the customer had opened the correspondence in eServices. This is consistent with statements by Mr Dall in the covering letter filed with his statement of grounds and particulars that he received a change of agent notice from IP Australia on 28 April 2021,[43] and sent a query to Mr Schutte concerning the change of agent to Patenteur.[44]
[43] “Covering letter basis for opposition”, supra.
[44] Exhibit SMD-11.
23. One of the key issues raised by Mr Dall was that the failure to request examination was the result of “premeditated, intentional and wilful” actions by Mr Vitale.[45] However, elsewhere in evidence and submissions, Mr Dall suggested that he shared responsibility for not updating eServices details for the application.[46] Mr Dall also stated that he remained a co-director of Transpiro until 29 May 2021.[47] Given the additional information gleaned from IP Australia records, I was not satisfied that the evidence, particularly that provided by Mr Dall, clearly established where responsibility for the failure to request examination lay. Indeed, my initial consideration of the evidence suggested that the failure to respond to the Direction was a result of the actions of the Opponent, Mr Dall. To that end I sought clarification from the parties on various points, and asked:[48]
The records indicate that the eServices account customer name was recorded as, Earthstep WA, and email correspondence was sent to [the email address recorded in eServices]. Was this eServices account established and maintained by Mr Dall?
What actions did Mr Dall take, or was he obliged to take, as part of his duties as director of Transpiro, in relation to correspondence he received on this application? Were these actions followed in relation to the request for examination?
What records did Transpiro keep for the application, including correspondence in relation to the present application (and the request for examination), minutes or records of decisions, and diary notes?
Did Mr Vitale have access to these records, including the customer account under the name of Earthstep WA, at the relevant time?
[45] Dall 2 at [9].
[46] Dall 3 at [6].
[47] Dall 3 at [5].
[48] Letter dated 18 November 2022.
24. In response to my query, Mr Dall confirmed that he maintained the customer account used to file this application.[49] However, he also asserted that it was “impossible to claim that any person maintained the eServices account all the time” and stated that the account had also been maintained by Mr Schutte and Einfolge on “different timelines”. Mr Dall also stated that he had “no particular knowledge of the customer name ‘Earthstep WA’ because before the start of the opposition he was asked to relinquish the account that mentioned account [Mr Dall’s Transpiro email address][50] as he was no longer a director, and this was placed under [Mr Dall’s Earthstep email address].”[51] The latter point appears to refer to the fact that Mr Dall initially filed the notice of opposition using the Earthstep WA account that was associated with the present application, meaning that the Applicant and Opponent would have been associated with the same customer account using the same contact email address. It is unclear how this would have resulted in Mr Dall having “no particular knowledge” of the account that he was using up to that point in time.
[49] Opponent’s response to the request for further information dated 3 December 2022 at [1].
[50] The Transpiro email address was given as the contact address for the application at national phase entry. This is different to the email address used by the eServices account and to which email alerts were sent.
[51] Opponent’s response to the request for further information dated 3 December 2022 at [3]-[4].
25. Furthermore, contrary to Mr Dall’s submissions there is no record of the eServices account being in any other name. Mr Dall could be referring here to the application and the listed patent agent rather than the eServices account. But Mr Schutte has not been recorded as the agent at any time during the national phase of the application,[52] and there is no record of any representation by the entity Einfolge, who appear instead to have provided Mr Dall with a patentability report in 2018.[53]
[52] Applicant’s supplementary written submissions dated 9 December 2022 at [5].
[53] Exhibit SMD-26.
26. Mr Vitale stated that he was unaware of the Earthstep WA account and had no access to it, or the contact email account listed for it. Mr Dall did not advise Mr Vitale of the existence of the Earthstep WA account.[54] I am satisfied that the evidence supports this statement. The Applicant also noted that a review of the ABN register lists only one entity using the name “Earthstep WA” and this is listed as being owned by the Dall Corporation (WA) Pty Ltd.[55]
[54] Applicant’s submissions in answer for the opposition, dated 10 October 2022 at [34].
[55] Applicant’s supplementary written submissions dated 9 December 2022 at [10].
27. Mr Dall’s responses on these points fail to directly address the issues raised in my letter, but I am satisfied from the information before me that Mr Dall established the Earthstep WA account associated with the application. Furthermore, Mr Dall responded to correspondence in relation to the change of agent for the application and attempted to use the Earthstep WA account to file the notice of opposition in the current matter. I consider this shows that Mr Dall not only established and maintained the account, but that the contact email address for the account was active and receiving email alerts from IP Australia at the relevant time.
28. Mr Dall went on to state that he remained as a director at Transpiro until almost a year after Mr Vitale was reinstated as the majority stakeholder and director on 30 June 2020. Mr Dall submitted that:
“As director of Transpiro, Mr. Dall was obliged to maintain and cater to the correspondence on this application. He had made multiple online inquiries. He responded to the emails and calls related to this application. But due to the confusion caused by two accounts, his requests for examination were not recognized. Mr. Dall maintained this correspondence for some time after Mr. Vitale’s reinstatement on 30 June 2020.”[56]
[56] Opponent’s response to the request for further information dated 3 December 2022 at [5].
29. As an initial point I note there are no records of any on-line inquiries, emails or calls on the application prior to the filing of the present s223 request. There is also no record of any attempt by Mr Dall to request examination on this application. Indeed, as indicated above the correspondence associated with the Direction to Request Examination remained unread in the eServices account.
30. The Applicant submitted that Mr Dall also had a legal obligation to make records available to Mr Vitale as a result of a Court Order from the WA Supreme Court,[57] and to maintain the application as a result of an undertaking dated 30 April 2019.[58] This included a duty as a director to read any emails received from IP Australia and to retrieve copies of any correspondence identified therein to avoid any loss of IP rights.[59] I note here that I have not considered whether or not this undertaking placed Mr Dall under any legal obligations at the relevant time. I have instead proceeded on the basis that Mr Vitale considered that it placed an obligation on Mr Dall. This is probably a moot point given Mr Dall’s acknowledged obligations as a director.
[57] Vitale 3 at [17] and Exhibit SAV-4.
[58] Vitale 3 at [18] and Exhibit SAV-8.
[59] Applicant’s response to further information, dated 1 December 2022 at [2].
31. On balance I consider the evidence from both parties establishes that Mr Dall had an obligation, either by way of a fiduciary duty as a director of the company, and possibly even by way of a legal undertaking or court order, to appropriately action correspondence in relation to the patent application. This obligation existed during the period that the Direction to Request Examination was made and continued until late in May 2021 when he was removed as a director.
32. My letter of 18 November 2022 also sought clarification as to whether Mr Vitale had reasonable access to the documents associated with the application, including the Direction to Request Examination. Mr Dall stated that Transpiro kept records of “notes and records of all the filings with early IP”, including the following
WIPO ISR
Supply Partner Input
PCT Timelines
Company Financial Expenditure and budget
Strength and positioning in continuing contractual arrangements
Paralegal research
Ongoing scientific input and planning
Inhouse design engineering and planning
Inhouse and external supplier patentability search reports
The capabilities of an Innovation Patent maintaining a more robust IP approach to protecting the IP value held at Transpiro.[60]
[60] Opponent’s response to the request for further information dated 3 December 2022 at [7].
33. I note that Mr Dall referred to “filings with early IP” rather than specifically to the present application. This appears to be a deliberate choice of words by Mr Dall as the Transpiro records above do not appear to include information in relation to the present (national phase) application or the eServices account used for correspondence for the application.
34. Mr Vitale stated that he kept records of the correspondence he received in relation to the application. The last of these (prior to his reappointment as director) was received around the time of national phase entry. Mr Vitale submitted that he has been kept records of all documents and correspondence he has been given access to since his reinstatement as director, but this does not include any correspondence concerning the Direction to Request Examination.[61] Mr Vitale stated that he had no knowledge or access to the Earthstep WA eServices account.[62]
[61] Applicant’s response to further information, dated 1 December 2022 at [3].
[62] Ibid at [1].
35. The reinstatement orders provided by Mr Dall to Mr Vitale around the time of his reinstatement refer to a shared Google Drive, a Xero logon and a Transpiro email address, but there is no mention of the eServices account.[63] Mr Dall stated that Mr Vitale had the opportunity to access various company records and to request any information from Mr Dall but chose not to.[64] The Applicant considered it incongruous that Mr Dall would make this assertion given that he was under an order to make all records available to Mr Vitale. They noted that at the time of reinstatement, the Direction to Request Examination had not been issued by IP Australia, and submitted that:
“…in line with the WA Supreme Court Order the Opponent had the duty to advise Mr Vitale of any new information as and when such became known to the Opponent – not that Mr Vitale had the duty to randomly and repeatedly enquire if any such new information had become known to the Opponent.”[65]
[63] Exhibit SMD-4.
[64] Opponent’s response to further information dated 3 December 2022 at [9].
[65] Applicant’s supplementary written submissions dated 9 December 2022 at [19].
36. While the court ordered that Mr Vitale be reinstated as a director as of 30 June 2020 and be given access to company records, the evidence suggests that he encountered difficulties in accessing company documents. Moreover, it appears that Mr Vitale’s majority shareholding was not officially rectified until October 2020 following a request from Mr Dall for an extension to comply with the court order, and the legal action taken by Mr Vitale was not finalised until November 2020.[66] Following reinstatement, Mr Vitale sought to undertake an audit of the financial record but was prevented from accessing financial information as late as March/April 2021 when the Transpiro accountants were changed to a new firm who apparently were unwilling to engage with Mr Vitale unless certain “commercial conditions” were met.[67] These circumstances would appear at odds with Mr Dall’s statements that Mr Vitale made no attempts to access company records.[68]
[66] Exhibit SAV-3.
[67] Exhibit SAV-3.
[68] Opponent’s response to further information dated 3 December 2022 at [8] to [10].
37. On balance, the information before leads me to conclude that Mr Vitale did not have reasonable access to correspondence sent to Transpiro in relation to the present application. The records that were kept by Transpiro do not appear to include correspondence associated with the national phase of the present application. Correspondence for the application was received by the Earthstep WA account. Mr Dall appears to be the only person in Transpiro who was aware of this account. The evidence before me shows that he did not inform Mr Vitale of its existence or give him access to it or to any correspondence that had been received via that customer account.
The section 223 determination
38. On balance, I consider that the circumstances outlined in the evidence justifies the grant of an extension of time under section 223.
39. Mr Vitale stated that based on the information provided in the correspondence from by IP Australia and Mr Schutte in December 2018,[69] he formed the opinion that a request for examination would not be required until May 2022. Consistent with that understanding, Mr Vitale contacted Mr Schutte on 6 April 2021 to organise payment of the renewal fees, and it was at this time that he became aware that the application had lapsed. Mr Vitale immediately indicated to Mr Schutte that he wished to retain the patent and the request under s223 was filed shortly thereafter.[70] I consider this also shows that the Applicant acted in a timely manner once they became aware that the application had lapsed.
[69] Vitale 2 at [13] to [16].
[70] Exhibit NS-9.
40. In refusing the request to dismiss a request for dismissal of the opposition, the delegate in their letter of 13 October 2021 considered that there was a real case to be answered since Mr Vitale could have investigated the status of the application following his reinstatement as a director on 30 June 2020 and made necessary changes to the address for service in the intervening 4 months prior to the Direction issuing.
41. However, I am satisfied that this line of reasoning does not apply in the present case. Mr Vitale stated that he was “distracted” by other matters associated with the company and therefore was not as diligent as required in monitoring the application. While he arguably could have performed “random and repeated” enquiries that might have alerted him to the Direction to Request Examination, the fact remains that the public record listed Transpiro as the Applicant, and Mr Dall, a director of the company, as the contact. I think it reasonable that Mr Vitale proceeded on the assumption that Mr Dall would have acted to maintain the application, either through a fiduciary duty as a director to act in the interests of the company, or, as Mr Vitale understood, in compliance with the Court Orders and the undertaking to maintain the company assets including the present application. Furthermore, I do not consider that it should have been necessary to change the contact details. There is no apparent reason on the public record for Mr Vitale to consider that the Applicant would not have received correspondence on the application and that it was necessary to change the contact details at that point in time. Ultimately, the Direction to Request Examination was received by the Applicant via Mr Dall, who was a director of the company at that time.
42. Given that I do not consider that Mr Vitale erred in this regard, the question remains as to what the specific circumstances were that resulted in the failure to request examination.
43. The main gist of Mr Dall’s arguments was that Mr Vitale had failed in his obligations as a director to ensure that he was informed of events in the company. Mr Dall stated that following his reinstatement Mr Vitale had responsibility for decisions in relation to the application. This was not disputed by Mr Vitale. But I do not understand this to mean that Mr Dall was absolved of all responsibility for actions in relation to the company and the patent application. To the contrary, he stated that he remained a director until 29 May 2021, and he acknowledged in his letter of 3 December 2022 that he was “obliged to maintain and cater to the correspondence on this application”.
44. In that regard, I consider the evidence shows that Mr Dall established the Earthstep WA account and entered the national phase without informing Mr Vitale, or their attorney at the time, Mr Schutte. This account was maintained by Mr Dall, and no records of the account appear to have been kept with Transpiro in a location that was visible to Mr Vitale. Mr Dall did not inform Mr Vitale of the Earthstep WA account when he prepared the reinstatement orders for Mr Vitale, nor did he inform Mr Schutte and Mr Vitale of his actions in discussions related to the present request under s223 around 28 April 2021.
45. When pressed on this point, Mr Dall submitted that it was the confusion of maintaining two eServices accounts (one associated with the present application and one associated with Innovation Patent 2018102030) that resulted in his requests for examination not being “recognised”.[71] Mr Dall provided no corroborative evidence of these attempts, and indeed the Direction to Request Examination for the present application remained unread in eServices. However, I infer from his submission that Mr Dall was aware of the Direction to Request Examination but did not bring it to Mr Vitale’s attention.
[71] Supra at footnote 56.
46. I therefore consider that responsibility for the failure to request examination lies with the Opponent, Mr Dall. Furthermore, the circumstances set out before me would prima facie justify the grant of an extension under section 223. It follows that Mr Dall’s opposition fails.
47. The remaining consideration is the specific provision under which the extension is granted. The original request was made under s223(2)(b) and the delegate considered that the material provided in support of the application supported the grant of such an extension. The Applicant was subsequently led to make an additional request under s223(2)(a) in response to a comment by a delegate to the extent that Mr Vitale could have investigated the status of the application following his reinstatement as a director. This observation followed from the submissions made by Mr Dall in his opposition. It was only late in the matter that Mr Dall clarified his responsibilities in the company and his role in the circumstances leading to the failure to request examination.
48. Section 223(2)(b) is a “force majeure” provision where the failure to perform the relevant act is outside the control of the person concerned and something that could not have been avoided by that person's exercise of due care. As previously noted, the circumstances of the present case are highly unusual, and it is arguable whether Mr Vitale failed to exercise an appropriate level of due care, or whether there were any actions that he could have taken to avoid the failure to request examination. To that end, the Applicant submitted that Mr Dall had acted duplicitously to prevent the successful prosecution of the present application since 2018 when he self-filed his own Innovation Patent application and hindered entry to the national phase by the Applicant’s representative, and that if the Opponent had received the Direction, they would have wilfully withheld the Direction and failed to inform the Applicant.
49. It does seem unusual that a director would have control over decisions for a patent application which they acknowledge conflicts with another IP right that they hold.[72] Indeed, in filing the opposition, Mr Dall referred to the impacts that the present application has on his interests in Innovation Patent 2018102030.[73] Correspondence between the different parties in the lead up to national phase entry[74] and following the present request under section 223 also indicates that Mr Dall questioned the value of pursuing the present application.[75] But in establishing and maintaining the eServices account associated with the application Mr Dall remained as the sole point of contact for all correspondence in relation to the application until a change of agent was requested on 23 April 2022 together with the present request under s223.
[72] Opponent’s submissions in support of its opposition dated 26 September 2022 at [8].
[73] “Covering letter basis for opposition”, supra.
[74] Exhibit SMD-10 (also NS-2), email from Mr Schutte dated 21 November 2018 at 17:30.
[75] Exhibit SMD-11, email dated 29 April 2021 at 13:24.
50. However, while I acknowledge the Applicant’s concerns that Mr Dall’s failure to alert Mr Vitale to the Direction to Request Examination was a deliberate action, I do not consider that I need to draw any conclusions in that regard. Deliberate or not, it was as a consequence of Mr Dall’s failure to inform him of the Direction that Mr Vitale proceeded on the assumption that examination was not due until May 2022 and remained of that understanding until he discovered that the application had lapsed when he enquired about continuation fees that were due in May 2021. I also consider it reasonable that Mr Vitale had assumed that Mr Dall would act to maintain the patent, and there was no apparent reason based on the public record that would have led him to consider that correspondence was not being received by Transpiro and properly acted upon. Under ordinary circumstances there appears to be little additional action that Mr Vitale could reasonably have been expected to have taken in relation to the application.
51. Nevertheless, the Applicant “stands in the shoes of their agent”, in that errors or omissions made by employees are attributed to the Applicant.[76] That is, the actions of an employee or agent are generally not considered to be beyond the control of the relevant person. I understand this to apply even where the agent deliberately or knowingly acts in a way that is contrary to their role or their obligations and there may be little that the person concerned could do to avoid those actions. I therefore do not consider that the provisions of section 223(2)(b) apply to the present circumstances.
[76] Re Atomic Skifabrik Alois Rohrmoser v Registrar of Trade Marks, supra.
52. However, Mr Dall submitted that the “confusion” caused by maintaining two accounts led to his requests for examination not being recognised. As noted above I infer from this statement that Mr Dall was at least aware of the Direction to Request Examination. In my opinion, his failure to inform Mr Vitale of that Direction in accordance with his acknowledged obligations, constitutes a relevant omission that enlivens the provisions of section 223(2)(a).
Conclusion
53. The opposition is unsuccessful.
54. I grant an extension of 6 months under section 223(2)(a) for the Applicant, Transpiro Pty Ltd, to request examination.
Costs
55. Costs generally follow the event. Both parties submitted that they should be awarded costs in the event that they were successful. However, the unusual circumstances in the present matter, as well as the need for additional evidence in relation to the request for an extension under section 223(2)(a) at a late stage of proceedings, could justify a variation in costs. I therefore consider it appropriate to provide the parties with the opportunity to make detailed submissions on costs.
56. I therefore allow the parties two weeks from the date of this decision to make detailed submissions on costs.
Dr Leslie F. McCaffery
Delegate of the Commissioner of Patents
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