Ulrich Labels Pty Ltd v. the Printing and Allied Trades Employers' Federation of Australia

[1990] APO 42

PATENTS ACT 1952

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Application No. 596043 by ULRICH LABELS PTY LTD, and an application for extension of time under sub‑section 59(1) by THE PRINTING AND ALLIED TRADES EMPLOYERS' FEDERATION OF AUSTRALIA.

Background

Application No. 596043 by Ulrich Labels Pty Ltd (ULRICH), which is entitled "Self Adhesive Labels", was advertised accepted in the Official Journal dated 12 April 1990.  The Printing and Allied Trades Employers' Federation of Australia (PATEFA) lodged an application for an extension of time under sub‑section 59(1) on 11 July 1990.  ULRICH objected to the extension of time and the matter was set down for hearing in Canberra on 7 September 1990.  ULRICH was represented by Mr G.C. McGowan of counsel, assisted by Mr G. Pryor, patent attorney of Davies & Collison.  Mr A. Wright, marketing manager of ULRICH also attended the hearing.   Representatives from two PATEFA members, Mr D. McMurray and Mr H. McKay attended the hearing but PATEFA's patent attorney, Shelston Waters, did not attend the hearing.  Mr McMurray is managing director of Unistat Pty Ltd and Mr McKay is chairman and managing director of Briginshaw Bros Pty Ltd (BRIGINSHAW).
         Mr McGowan submitted PATEFA did not have locus standi and he lodged two statutory declarations to support his submission.  He argued that I should consider whether PATEFA was a "person

interested" before considering the merits of the application for extension of time.  He said this argument was based on the provisions of section 163.  Neither Mr McMurray nor Mr McKay had come prepared to argue whether PATEFA had locus standi and they requested time to consider the statutory declarations lodged by ULRICH.  I allowed PATEFA one week to respond to the documents lodged by ULRICH and I also allowed ULRICH one week to reply to any documents lodged by PATEFA.  Subsequently both parties lodged documents within this time.  On 11 September 1990 PATEFA also lodged notice of its proposed opposition.
Evidence
         At the hearing Mr McGowan lodged statutory declarations on behalf of ULRICH made by:

.Mr Wright with 4 exhibits annexed to the declaration,

.Ms Christine Ulrich with 4 exhibits annexed to the declaration, and

.Mr Pryor.

Ms Ulrich is managing director of ULRICH.
     In response PATEFA's patent attorney lodged statutory declarations made by:

.Mr McKay, and

.Mr Peter Brett with 8 exhibits annexed to the declaration.

Mr Brett is the manager of the New South Wales region of PATEFA.  Subsequently ULRICH's patent attorney lodged another statutory declaration made by Mr Wright with 4 exhibits annexed to the declaration.
Submissions
At the hearing Mr McGowan based his submissions on written submissions which he also lodged. PATEFA lodged written submissions made by Mr P. Heathcote, patent attorney of Shelston Waters, along with the statutory declarations it lodged after the hearing. ULRICH's response also included written submissions made by its patent attorney Mr Pryor. I will summarise these submissions at appropriate points in the decision. But I note Mr McGowan submitted, and PATEFA in its written submissions conceded, that PATEFA has the onus to demonstrate that it has locus standi (Mediline A.G.'s Patent 1973 RPC 91). I also note Mr McGowan conceded PATEFA was a legal person.
Locus standi
         The relevant part of sub‑section 59(1) reads as follows:

"The Minister or a person interested may at any time within 3 months after the date of the advertisement of the acceptance ... or within such further period ... as the Commissioner ... allows, by notice in writing lodged at the Patent Office ... oppose the grant of the patent ..."

I think it is clear from this sub‑section that a prospective opponent must be "a person interested" when the notice of opposition is lodged (cf Mediline A.G.'s Patent, supra, page 98).  I think it is equally clear that a prospective opponent who requests an extension of time under sub‑section 59(1) must also be "a person interested" when the application for extension is lodged.  And according to sub‑section 163(1) I may determine the right of PATEFA to give notice of opposition as a preliminary issue.  ULRICH has raised serious arguments about PATEFA's locus standi and has supported these arguments with relevant documentary evidence.  Thus the merits of PATEFA's case for an extension of time will be irrelevant if it cannot show it is "a person interested".  Therefore I will consider whether PATEFA has locus standi before considering the merits of its application for extension of time.
Decision
The High Court agreed with earlier decisions of the UK Solicitor‑General and rulings of the UK Comptroller‑General about what interest, "a person interested" needed, to oppose an application for a patent (Kaiser Aluminium and Chemical Corp v Reynolds Metal Company 120 CLR 136 at page 138). Thus the patent application must be immediately or directly prejudicial to the interests of the prospective opponent. And the interest must be a real, definite substantial interest and must not arise from something the prospective opponent proposes to do.
         The criteria which have been developed to decide whether a prospective opponent's interest is sufficient are possession of:
     .  a relevant patent, or
     .  a relevant manufacturing interest, or
     .  a relevant trading interest, or
     .  a relevant financial interest.
(See New Things Ltd's Application 1914 RPC 45, Arthur Cyril Merron's Aplication 1944 RPC 91 and Badische Anilin and Sodafabrik AG's Application 1963 RPC 19).
According to Mr Brett PATEFA derives its corporate standing by virtue of its registration as an organisation pursuant to the Industrial Relations Act 1988 and the legislation preceding it, the Federal Concilication and Arbitration Act. But he says PATEFA is engaged in a wide field of activities on behalf of its members. He considers PATEFA is bound by its constitution to protect the interests of its members and represent them before tribunals to protect these interests. Mr McKay says the reasons his company is a member of PATEFA "are more particular relative to the commercial aspect of the printing industry". On the other hand Ms Ulrich declares PATEFA's interests are almost exclusively concerned with industrial relations questions of employers in the general printing industry. Although she also says the objects of PATEFA are sufficiently wide to allow its involvement in patent opposition proceedings. I agree with Ms Ulrich's last statement.
         PATEFA's constitution does not specifically state that one of its objects is to acquire patents.  But in my view the constitution does not rule out the possibility of PATEFA owning patents.  PATEFA's Annual Report 1989, which includes a report from each of the regions, does not specifically refer to any activity associated with the prosecution of patent applications.  In fact the only place the word "patent" is used in the official PATEFA documents which have been lodged, is in the "Corporate Plan 1990‑1994".  This use occurs under the heading "Commercial Services" where "Patent, Copyright and Trademark Law" is an example of commercial services which need to be developed, further developed or are being developed.  In my view this does not mean PATEFA possesses patents or intends to possess patents.  In any case there is no evidence PATEFA possesses or even intends to possess patents involving technology which is relevant to patent application No. 596043.  Mr Brett has annexed to his declaration two certificates of registration of a trade mark on which PATEFA is named as the registered proprietor.  Trade mark No. B430838 is registered for Organisation of the Printing Industry Craftsman Awards being services included in class 41.  Trade mark No. A504543 is registered for stationery and printed material being goods included in class 16.  I do not think the proprietorship of these trade marks is relevant to the question of PATEFA's interest in a patent application concerning self adhesive labels.  Thus I consider there is no evidence on file that PATEFA possess a patent which is relevant to self adhesive labels.  Similarly I consider there is no evidence on file that PATEFA has a manufacturing interest or a trading interest in self adhesive labels.
According to Mr Brett, PATEFA's failure to adequately represent its membership may result in a loss of confidence by its membership and a subsequent trading loss. The written submissions lodged on behalf of PATEFA state it is dependent on its membership for funds. The submissions also state the failure of PATEFA to meet the requirements of its membership would have a direct financial impact on PATEFA. These general statements may be true but there is no evidence that the membership of PATEFA requires it to lodge a notice of opposition to application No. 596043. Also there is no evidence about how many members would fail to pay their subscriptions if PATEFA did not oppose the present patent application. For example Mr McKay and Mr McMurray represent PATEFA members involved in the self‑adhesive label industry. Neither of them implied the failure of PATEFA to lodge a notice of opposition would result in these members not paying their subscriptions. Thus I am satisfied that PATEFA has not shown it has a direct relevant financial interest in patent application No. 596043 (Luft and Weiss 73 CLR 119 at page 128).
The written submissions lodged on behalf of PATEFA argue the present situation falls between the extremes of the Baigent case (Henri Baigent Ltd's Application 1953 RPC 441) and the Merron case (Arthur Cyril Merron's Application, supra). These submissions also argue the present situation can be distinguished from that in the Neutrodyne case (Australian Radio Manufacturers' Patents Association Ltd v Neutrodyne Pty Ltd 57 CLR 27). According to the submissions made by ULRICH neither the Baigent case nor the Merron case supports PATEFA's case. In any event ULRICH considers the Neutrodyne case is a binding authority in Australia.
         In the Merron case the Assistant Comptroller states the practice of the UK Patent Office is to regard an organisation, which represents a number of individuals each of whom has a sufficient manufacturing or trading interest for the purpose of opposition proceedings, as having an adequate interest to allow it to stand as an opponent.  The Assistant Comptroller then went on to find that an organisation which only had one member with a sufficient interest did not have sufficient interest itself.  In the Baigent case the honorary secretary of a model car association, on behalf of the association, opposed a patent application which claimed model vehicles and the tracks on which they ran.  The association organised meetings for running model cars and provided the track on which the cars ran.  The public were charged for admission to the meetings and the association's finances depended to a large extent on these charges.  The Assistant Comptroller decided the association had sufficient interest because the association's activities could be regarded as trading in the tracks on which the model cars ran.
         Mr Brett declares PATEFA has a total membership of about 2,300 members engaged in a wide variety of activities in the printing industry.  He says 329 members have informed PATEFA they are engaged in labels‑paper and 345 members have stated they are engaged in pressure‑sensitive (self adhesive) labels.  Mr Brett also refers to extracts from the "Yellow Pages" of the telephone directories from several capital cities to demonstrate the size of the self adhesive label industry.  Thus he concludes PATEFA has a substantial interest in patent application No. 596043.  Annexed to Ms Ulrich's declaration is a complete list of the 1988 membership of PATEFA on which are marked those members which she considers could have an interest in the present patent application.  In her view less than 2 per cent of the membership would be interested in the application.  Thus Ms Ulrich concludes that for all practical purposes the self adhesive label industry has no representation in PATEFA.  But she does concede that a greater proportion of the members of the Label and Tag Manufacturers Association of New South Wales (LATMA) would be interested in the present patent application than would be the case with PATEFA.
         PATEFA's constitution defines the relevant industry as the printing industry.  I note this includes any trade industry business or undertaking in or allied with a list of businesses.  For example the list includes letterpress printers, toilet paper manufacturers and printing ink makers.  In my view many of the businesses listed are not relevant to manufacture of self adhesive labels, for example toilet paper manufacturers and printing ink makers.  I do not think it is possible to estimate from the extracts of the "Yellow Pages" and the complete list of the 1988 membership of PATEFA the number of members involved in the production of self adhesive labels.  This is because most entries in these extracts do not state whether the business is involved in manufacturing or merely selling self adhesive labels.  Therefore I consider PATEFA is not an organisation which represents a number of individuals each of whom has a sufficient interest to be involved in an opposition to patent application No. 596043 (cf Arthur Cyril Merron's Application, supra).  I found earlier in this decision that PATEFA did not have a direct relevant financial interest in self adhesive labels.  Thus its activities cannot be regarded as trading in the present invention (cf Henri Baigent Ltd's Application, supra).  In my view, therefore, the Merron case and the Baigent case are only relevant to PATEFA's situation if these cases suggest the interest of an organisation can be equated with the interests of less than all the members of the organisation.  I consider these cases do not make such a suggestion.  In fact the Assistant Comptroller states as follows (Arthur Cyril Merron's Application, supra, page 93):

"The question, therefore arises whether the rule I have stated above should cover an organisation which includes amongst its members one company which of itself has a satisfactory locus.  I think not.  If this be the actual position then the constituent member company should have come forward as the opponent and should not have attempted to act through the organisation."

At the hearing Mr McMurray said he was president of LATMA which is one of 10 associations in the industry covered by PATEFA.  He said PATEFA had offered to oppose the patent application because LATMA is not yet an incorporated body.  He explained he was acting on behalf of a group of 30 members.  Mr McKay said LATMA had acted on behalf of BRIGINSHAW.
         There is no evidence that all the members of LATMA wish to oppose patent application No. 596043.  Similarly there is no evidence that all the group of 30 LATMA members, to which Mr McMurray referred, wish to oppose the application.  But it appears to me that at least one member, namely BRIGINSHAW, wishes to oppose the application.  In my view BRIGINSHAW should have followed the Assistant Comptroller's suggestion in the Merron case.
         The members of the opponent in the Neutrodyne case (Australian Radio Manufacturers' Patents Association Ltd v Neutrodyne Pty Ltd supra), had appointed the association to act as agent on their behalf.  The High Court found the opponent had an insufficient interest to oppose the patent application in question.  For example, Dixon, J stated as follows (Australian Radio Manufacturers' Patent Association Ltd v Neutrodyne Pty Ltd, supra, page 34):

"It is quite clear that a distinct entity such as a company cannot rely upon the interests of its shareholders as property, tangible or intangible, which it represents."

In the present situation there is no evidence that PATEFA has been appointed agent to act on behalf of its members in an opposition to patent application No. 596043.  Although I understand that in general PATEFA promotes, protects and furthers the interests of its members.  But in my view PATEFA is in the same position as the Australian Radio Manufacturers' Patents Association Ltd, because it does not have a direct interest in the subject matter of the patent application under consideration.  Thus I do not agree with PATEFA's submission that the present situation can be distinguished from that in the Neutrodyne case.
         The notice of the proposed opposition lodged on 11 September 1990 states PATEFA's interest as follows:

"We represent members of our Federation who will be adversely affected in their business and trade dealings by the grant of a Patent on the opposed application."

But according to Dixon, J's statement in the Neutrodyne case PATEFA cannot rely upon the interests of members or affiliates as property which it represents. I also note Gibbs, J summarised the case law on this aspect of locus standi in the phrase "a corporation does not acquire standing because some members possess it" (Australian Conservation Foundation Inc v Commonwealth of Australia 28 ALR 257 at page 271). Therefore I do not think the adverse affects of patent application No. 596043 on the business and trade dealings of PATEFA's members means it has locus standi to oppose the application.
If an opponent can show its real interest is adversely affected and if the opposition is not frivolous, vexatious or blackmailing then the opposition may be allowed to proceed even if some doubt is cast upon the extent of the opponents interest (Kessler's Application 1971 RPC 360 at page 367). Thus I think it is appropriate to see if PATEFA has evidence of any serious grounds for opposing patent application No. 596043. Mr McKay declares as follows:

"I have studied the Patent Abridgment of Patent Application 596043 as obtained from the Patents Office and consider that although seemingly expressed in broad terms (sic) would not appear to portray any new or novel technology.

I, with the confirmation of many sundry suppliers of materials to be used in the production of self adhesive labels as per the patent applied for, advise that all such ingredient materials are commercially and readily available to any interested party.

It appears from my interpretation of the initial claim on the Patent Application No. 596043, that the (sic) all types of laminated self adhesive labels as have been commonly provided for at least 20 years, could fall with the Patent Application 596043.  I claim that the Application should be denied as a prior art of manufacture and construction, and could restrict continuance of long and previously practiced manufacture."

Thus the real interests of some members and affiliates of PATEFA may be adversely affected by granting a patent on application No. 596043.  But I do not think it follows that PATEFA's real interests would be adversely affected by a patent granted on this patent application.
In an earlier decision I stated there would have to be incontrovertible evidence supporting lack of locus before I could refuse to consider an extension of time under sub‑section 59(1) (Nautical Services Pty Ltd v Hitech Distillation (Australia) Pty Ltd 7 IPR 567 at page 570). In my view ULRICH's evidence supporting PATEFA's lack of locus standi is incontrovertible. Consequently I am satisfied PATEFA has not discharged the onus on it of demonstrating it has locus standi to oppose patent application No. 596043 under sub‑section 59(1). Therefore I will not consider the merits of PATEFA's application for extension of time under sub‑ section 59(1).
Public Interest
PATEFA submitted it was in the public interest to allow its opposition to proceed and it referred to a statement made by Graham J in the Mediline case (Mediline AG's Patent 1973 RPC 91 at page 97). ULRICH's written submissions argue the public interest is not served by the Commissioner allowing an incompetent opposition to proceed. It points out members of the public disadvantaged by the grant of a patent on application No. 596043 can seek revocation of the patent. I also note that Ms Ulrich and Mr Wright consider a number of manufacturers are manufacturing self adhesive labels which would infringe a patent granted on application No. 596043.

I think it is in the public interest for a patent granted on application No. 596043 to be as valid as possible. I also think it is in ULRICH's interest for a valid patent to be granted, particularly if it is considering taking action against potential infringers. But according to Mr McKay the scope of the initial claim could include all types of laminated self adhesive labels commonly provided for at least 20 years. He has not lodged evidence to support this assertion but a patent granted on the present application would be invalid if the assertion is correct. I conclude it would be in the public interest for any evidence, which supports Mr McKay's assertion, to be considered by the Commissioner before a patent is granted on application No. 596043. On the other hand there is no bar to the sealing of a patent on the present application solely on the basis of Mr McKay's assertion (cf Applications by Gould Inc 13 IPR 644). I am not aware of any precedent which suggests that a prospective opponent, whose interests are not directly affected, should be considered a person interested. Thus I am not prepared to allow PATEFA to lodge a notice of opposition on the basis of Mr McKay's assertion. But an invalid patent may be granted on application No. 596043 if there is no opportunity for a person interested to lodge evidence which supports Mr McKay's assertion. This opportunity will arise if PATEFA successfully appeals against this decision in the Federal Court. Another way this opportunity may arise is if a person interested obtains an extension of time under sub‑section 160(2) to lodge a notice of opposition. For example BRIGINSHAW may be a person interested and it seems to me from Mr McKay's declaration that it may have been considering opposing the present application before the 3 month opposition period expired. Thus I consider the public interest will be satisfied if there is sufficient time for a person interested to lodge an application for extension of time under sub‑section 160(2) before a patent is sealed on the present application. Consequently I direct application No. 596043 not proceed to sealing until 30 days from the date of this decision.
Costs
         Mr McGowan submitted I should award costs to ULRICH if it successfully challenged PATEFA's locus standi.  PATEFA argued when awarding costs I should take into account the fact that its locus standi was challenged at short notice.   Both parties agree that PATEFA's patent attorney was only informed of the challenge to its locus standi the day before the date of the hearing.  As a result neither Mr McMurray nor Mr McKay was prepared to argue this aspect of the case at the hearing.  Consequently PATEFA's written submissions argue that it should only be liable for costs involved in deciding the application for extension of time under sub‑section 59(1).
         It seems to me ULRICH's short notice of the challenge to locus standi is only relevant to the consideration of costs if PATEFA would not have attended the hearing if it had been given adequate notice.  PATEFA's written submissions suggest it would have attended the hearing prepared to argue in support of its locus standi if it had sufficient time.  Therefore I think the short notice of the challenge to locus standi is irrelevant to the consideration of costs.
         PATEFA's representatives attended the hearing because ULRICH objected to the extension of time under sub‑section 59(1). 
I have not considered the merits of PATEFA's application for extension of time because ULRICH successfully challenged PATEFA's locus standi to oppose patent application No. 596043.  In these circumstances I award costs against PATEFA.
Summary
         I found PATEFA does not have locus standi to oppose patent application No. 596043 under sub‑section 59(1).  The application will not proceed to sealing until 30 days from the date of this decision.

(M. KENDALL)

Attorneys for the applicant        : Davies & Collison