CTHFCA

Stack v Davies Shephard

[2001] FCA 501

Federal Court of Australia|2001-05-04|Before: Cooper J, Dowsett JJ

View original source

At a glance

Source facts

Court

Federal Court of Australia

Decision date

2001-05-04

Before

Cooper J, Dowsett JJ

Source

Original judgment source is linked above.

Judgment (25 paragraphs)

[1]

REASONS FOR JUDGMENT THE COURT: 1 There are two appeals before us from judgments of a Judge of the Court (Cooper J). In proceeding Q 243 of 1999 George Stack ("Stack") and G S Technology Pty Ltd ("GST") appeal from that part of a judgment given on 15 September 1999 whereby his Honour made the following declaratory orders: "1. George Stack is not, and was not at any material time, entitled under s 15 of the Patents Act 1990 (Cth) to the grant to him of a patent in consequence of the filing of the provisional specification PK2036. 2. George Stack is not, and was not at any material time, entitled under s 15 of the Patents Act 1990 (Cth) to a grant to him of a standard patent in consequence of the filing of application 85236/91. 3. George Stack was not entitled under s 15 of the Patents Act 1990 (Cth) to the grant to him of Australian Petty Patent Number 645740. 4. GST [sic] Technology Pty Ltd was not entitled under s 15 of the Patents Act 1990 (Cth) to a grant to it of Australian Petty Patent Number 645740. 5. GS Technology Pty Ltd is not entitled to Australian Petty Patent Number 645740 within the meaning of s 138(3)(a) of the Patents Act 1990 (Cth)." In proceeding Q 42 of 2000 Stack and GST appeal from the judgment given on 10 May 2000 (1) revoking Australian Petty Patent No 64570 and (2) refusing to make orders sought by them in a notice of motion filed on 21 October 1999.

[2]

2 The unusual and extended history of this matter appears from the reasons published by Cooper J on 15 September 1999 (47 IPR 525). We set out below [1] - [10] and the first sentence of [11]: "1. On 17 March 1994 George Stack ('Stack') and G S Technology Pty Ltd ('GST') commenced proceedings QG 28 of 1994 against the Brisbane City Council ('BCC'), Davies Shephard Pty Ltd ('DS') and Davies Shephard (Queensland) Pty Ltd ('DSQ'). 2. The proceedings were brought by Stack as patentee of Australian Petty Patent No 645740 ('the petty patent') and by GST as the registered patentee by assignment of the petty patent as and from 23 October 1995. The applicants claimed against the BCC a declaration that the BCC, as an authority of State, had exploited the petty patent within the meaning of s 163 of the Patents Act 1990 (Cth) ('the Act') and sought orders fixing the terms for such exploitation pursuant to s 165 of the Act. The applicants sought against DS and DSQ, injunctive relief to restrain an alleged infringement by them of the petty patent and damages or an account of profits for such infringement. 3. DS and DSQ, by their defence and cross-claim, inter alia, alleged that each of the claims of the petty patent was invalid and sought revocation. In their particulars of objection filed with the defence and cross-claim, DS and DSQ alleged that Stack was not entitled to be granted the petty patent (paragraph 1), that the claimed invention was not novel (paragraph 2), that the claimed invention was obvious and did not involve an inventive step (paragraph 3), that the complete specification of the petty patent did not comply with s 40(2) or s 40(3) of the Act (paragraph 4), and finally, that the claimed invention was not a 'manner of manufacture' within the meaning of s 6 of the Statute of Monopolies (paragraph 5). 4. On 19 December 1994 Stack applied for an extension of the petty patent for a further period of twelve months. The application was made pursuant to s 69 of the Act. On 20 December 1994, DS and GSA Industries (Australia) Pty Ltd ('GSA') each filed a notice pursuant to s 28 of the Act notifying grounds upon which they contended the petty patent was invalid. 5. On 5 January 1996, a Deputy Commissioner of Patents delivered a preliminary decision on the objections taken in the s 28 notices filed by DS and GSA. On the basis of a priority date of 30 August 1990 he held that Claims 1 and 2, and on the basis of a priority date of 30 August 1991 for claim 3, were novel, involved an inventive step and that the invention was a 'manner of manufacture' within the meaning of the Statute of Monopolies. Notwithstanding registration on 23 October 1995 of GST as patentee by deed of assignment dated 16 March 1994, the Deputy Commissioner was not satisfied that Stack was originally entitled to the petty patent. Over objection, the Deputy Commissioner allowed Stack three weeks to make an application to adduce further evidence of entitlement. 6. On 25 January 1996, DS filed a notice of appeal pursuant to s 69(7) of the Act from the decision of the Deputy Commissioner. Those proceedings (VG39 of 1996) were filed in the Victorian District Registry of the Court. On 29 January 1996 GSA also filed an appeal (VG40 of 1996) in the Victorian District Registry against the decision of the Deputy Commissioner. Each appeal sought revocation of the petty patent on the grounds contained in the s 28 notices. Those grounds replicated the invalidity grounds pleaded in the defence and cross-claim in QG28 of 1994. 7. On 29 January 1996, Stack also appealed against the decision of the Deputy Commissioner by proceedings QG11 of 1996. The Deputy Commissioner, on 27 February 1996, found that the further evidence tendered by Stack and GST did not establish a prima facie case that Stack was entitled to the grant of the petty patent. On that date the Deputy Commissioner refused to admit the further evidence and concluded that the petty patent was granted to a person who was not entitled to be granted the petty patent. As this circumstance was not capable of rectification by amendment, the Deputy Commissioner refused to extend the term of the petty patent and awarded costs against Stack and GST. 8. On 1 March 1996, GST appealed the decision of the Deputy Commissioner given on 27 February 1996. The appeal proceedings (QG29 of 1996) sought orders that the term of the petty patent be extended and that DS and GSA pay the costs of the appeal. 9. On 24 April 1996, Kiefel J ordered that QG 11 of 1996 be heard with QG29 of 1996. In the Victorian District Registry, Heerey J, on 29 April 1996, ordered that VG39 of 1996 and VG40 of 1996 be transferred to the Queensland District Registry and be heard with QG11 of 1996 and QG29 of 1996. 10. Stack and GST commenced proceeding QG 21 of 1996 on 14 February 1996 against the State of Queensland ('Queensland') and the Commissioner of Patents in respect of another Australian Petty Patent No 662284 ('the second petty patent'). The second petty patent, like the petty patent, concerned water meter assemblies. The proceedings sought, as against Queensland, the fixing of terms pursuant to s 165 of the Act for exploitation of the second petty patent. The proceedings sought orders against the Commissioner that the assignment of the second petty patent to GST be registered. After a hearing before Kiefel J the assignment was registered and the proceedings against the Commissioner were dismissed by consent. 11. On 6 December 1996, Kiefel J ordered that proceedings QG28 of 1994, QG11 of 1996, QG21 of 1996, QG29 of 1996, VG39 of 1996 and VG40 of 1996 be heard concurrently." 3 After a lengthy trial Cooper J delivered the judgment to which we have referred. At [16] his Honour observed: "16. The issues which arise for determination are: 1. Whether Stack or GST were entitled to the grant of the petty patent. 2. Whether the complete specification of the petty patent complied with the requirements of s 40(2) or s 40(3) of the Act. 3. The priority date of the claims of the petty patent. 4. Whether the alleged invention was a "manner of manufacture" within the meaning of s 6 of the Statute of Monopolies. 5. Whether the alleged invention was obvious when compared with the prior art base as it existed at the priority date of the claims. 6. Whether the alleged invention was novel when compared with the prior art base at the priority date of the claims." 4 DS, DSQ and GSA have appealed against some aspects of his Honour's decision. Stack and GST have cross-appealed. As a result of directions given concerning the conduct of the appeal and cross-appeal, we are now considering only the cross-appeal. This involves the first of the issues identified by Cooper J. 5 It is important to identify with precision the evidence which was before the primary judge, particularly because of certain matters which will emerge when we discuss appeal number Q 42 of 2000. His Honour summarized the material at [55] of his reasons. However there is one error to which attention was drawn by the cross-respondents. The evidence was: · the statutory documents relating to the petty patent; · paragraphs 1 - 5 inclusive of a witness statement by Stack dated 8 September 1997 which is to be found in exhibit 25; · paragraphs 5, 8 and 24 - 30, inclusive of a witness statement by Alan Joseph Grieves ("Grieves") dated 11 September 1997 to be found in exhibit 30; and · documents to be found in exhibit 24, excluding documents 8 and 9.

12 Cooper J found that Stack and Grieves were the inventors (subject to any claim by Russell Plastics) in the sense that they performed the intellectual and practical work involved in the development of the invention. We do not understand this finding to be challenged by Stack or GST. The matter in issue is whether or not Stack was, in the circumstances, solely entitled to a grant. Cooper J concluded that he was not. Sections 15 and 16 of the Patents Act 1990 (Cth) ("the Act") provide as follows: "15 Who may be granted a patent? (1) Subject to this Act, a patent for an invention may only be granted to a person who: (a) is the inventor; or (b) would, on the grant of a patent for the invention, be entitled to have the patent assigned to the person; or (c) derives title to the invention from the inventor or a person mentioned in paragraph (b); or (d) is the legal representative of a deceased person mentioned in paragraph (a), (b) or (c). (2) A patent may be granted to a person whether or not he or she is an Australian citizen. 16 Co-ownership of patents (1) Subject to any agreement to the contrary, where there are 2 or more patentees: (a) each of them is entitled to an equal undivided share in the patent; and (b) each of them is entitled to exercise the exclusive rights given by the patent for his or her own benefit without accounting to the others; and (c) none of them can grant a licence under the patent, or assign an interest in it, without the consent of the others. (2) Where a patented product, or a product of a patented method or process, is sold by any of 2 or more patentees, the buyer, and a person claiming through the buyer, may deal with the product as if it had been sold by all the patentees. (3) This section does not affect the rights or obligations of a trustee or of the legal representative of a deceased person, or rights or obligations arising out of either of those relationships." 13 Clearly, s 15 contemplates the grant of a patent only to a person who falls into one of the four specified categories. His Honour found that as Stack was not the inventor, but rather one of two joint inventors, he was not within par 15(1)(a). He had no claim to an assignment upon issue of the patent and so was not within par 15(1)(b). Clearly, the alleged circumstances in which Grieves permitted Stack to apply did not amount to a transfer of title to the invention for the purposes of par 15(1)(c). The evidence suggests only that Grieves was agreeable to Stack making the application. There was no allegation that Stack was the legal representative of any deceased person who was entitled to a patent (par 15(1)(d)). 14 Thus the question for determination is whether his Honour was correct in concluding that the Act does not authorize the grant of a patent to one of two or more joint inventors. A perusal of the texts suggests that there has been little recent consideration of this point. In the 8th edition of Terrell on Patents (published in 1934) at pp 13 - 22, there is discussion of the meaning of the expression "true and first inventor" in s 6 of the Statute of Monopolies and equivalent terms in later legislation. Of particular interest are the observations of Jessel MR in Plimpton v Malcomson (1876) 3 ChD 531 and in Marsden v The Saville Street Foundry and Engineering Co Ltd (1878) 3 ExD 203. In Plimpton his Lordship said (at 555 - 6): "In order that those who may have to consider my judgment hereafter may know the view that I take of the statute combined with decisions, I will state the result at which I have arrived. As I understand, shortly after the passing of the statute, the question arose whether a man could be called a first and true inventor who, in the popular sense, had never invented anything, but who, having learned abroad (that is, out of the realm, in a foreign country, …) that somebody else had invented something, quietly copied the invention, and brought it over to this country, and then took out a patent. As I said before, in the popular sense he had invented nothing. But it was decided, and now, therefore, is the legal sense and meaning of the statute, that he was a first and true inventor within the statute, if the invention, being in other respects novel and useful, was not previously known in this country - "known" being used in that particular sense, as being part of what had been called the common or public knowledge of the country. That was the first thing. Then there was a second thing. Suppose there were two people, actual inventors in this country, who invented the same thing simultaneously, could either be said to be the first and true inventor? It was decided that the man who first took out the patent was the first and true inventor. Then there was another point. If the man who took out the patent was not, in popular language, the first and true inventor, because somebody had invented it before, but had not taken out a patent for it, would he still, in law, be the first and true inventor? It was decided he would, provided the invention of the first inventor had been kept secret, or, without being actually kept secret, had not been made known in such a way as to become a part of the common knowledge, or of the public stock of information. Therefore, in that case also, there was a person who was legally the first and true inventor, although, in common language, he was not, because one or more people had invented it before him, but had not sufficiently disclosed it." 15 The emphasis upon actual invention is clear. In Marsden a deceased inventor had not patented the invention during his lifetime. His personal representative did so after his death. The validity of the patent was later challenged. Jessel MR said (at 204 - 5): "This is a mere experiment. From the time of the passing of the Statute … down to the present time, no one, so far as I know, has contended in a court of law, much less has any court of law allowed, the validity of such a contention as that a communication made in England by one British subject to another British subject can be patented by the receiver of the communication, so as to make the receiver the true and first inventor within the meaning of the patent laws. It has been argued that before the statute of James, such patents were valid and were allowed by the judges, and that the statute merely restricts the duration of the patent, and does not destroy the right as it previously existed. Even supposing that were so, the statute defines who are considered to be worthy recipients of the grant of such a monopoly, as it was then called, and the definition so given has been followed ever since. It is difficult to say ŕ priori on what principle a person who did not invent anything, but who merely imported from abroad into this realm the invention of another, was treated by the judges as being the first and true inventor. I have never been able to discover the principle, and although I have often made inquiry of others, and of some who are more familiar with the patent law than even I am, although I cannot pretend not to possess a considerable familiarity with it, I could never get a satisfactory answer. The only answer was, It has been so decided, and you are bound by the decisions. But it is an anomaly as far as I know, not depending on any principle whatever. It has never been declared by any judge or authority that there is such a principle, and, not being able to find one, all I can say is, that I must look upon it as a sort of anomalous decision which has acquired by time and recognition the force of law." 16 His Lordship then referred to the decision in The Clothworkers of Ipswich Case (1615) Godb 252; 78 ER 147 and continued (at 206): "Therefore the decision goes no further than this - that at that time, considering the difficulty which then attended communication from abroad, a man who brought in anything from abroad did it at the peril of his life (for travelling was not without danger in the time of Henry VIII) and consumption of his estate and stock, and it was therefore such a meritorious service done to this kingdom, that the king might lawfully grant him a monopoly. That is the ground that it is put upon. Now, there is some reason in that. It does not make him the true and first inventor, but it does shew a meritorious consideration which warranted an exception from the general rule that monopolies could not be granted. How that applies to a gentleman in Leeds whispering in his neighbour's ear in a street in Leeds, I do not know. At all events it does not appear to me that such a case as this is within the grounds I have mentioned." 17 After reference to other similar cases his Lordship continued (at 207 - 8): "Now that is the origin of the decisions, and that being the origin of them, what possible right have we to say that we can now extend that privilege, beyond the importation of an invention from beyond the seas, to the case of a man (I am dealing with the real case as told us and not the case as appears by the statement of claim) who dies before taking out a patent and whose legal personal representative, finding the invention sufficiently described amongst his papers, thereupon obtains a patent as upon a communication from him. Whether or not there should be legislative provision for such a case it is not for us to say. But there is none. He is neither the first nor the true inventor within the ordinary or existing legal meaning of the term." 18 Thus it can be seen that the courts have taken a narrow view of entitlement to a patent, looking to the legislative intention to encourage commercial activity. Marsden establishes that in the absence of express statutory provision, a personal representative could not obtain a grant on behalf of the estate of a deceased inventor because the representative would not be the true inventor. Obviously, the decision also excludes any claim by a person who, not being the true inventor, bases his claim upon knowledge derived from that inventor. This is similar in principle to the present case. It is also presently relevant that in Marsden the patentee had sought to restrain the infringement of a patent. The defendant, in reply, challenged its validity. 19 Returning to Terrell, the author says (at 18 - 20): "It must be remembered that the question 'Is the patentee true and first inventor?' is entirely separate and distinct from the question 'Is the invention itself new?' In the former case we are dealing with the history of an idea in the mind of a particular man; in the latter with the history of a manufacture. The difference was pointed out by Tindal CJ in Gibson and Campbell v Brand (1 WPC 627 - 628): 'The defendant next says that these letters patent have not been granted to the true and first inventors, which you are aware is a condition required by the statute. Now a man may publish to the world that which is perfectly new in all its use, and has not before been enjoyed, and yet he may not be the first and true inventor; he may have borrowed it from some other person, he may have taken it from a book, he may have learnt it from a specification; and then the Legislature never intended that a person who had taken all his knowledge from the act of another, from the labours and assiduity or ingenuity of another, should be the man who was to receive the benefit of another's skill. … ' In Tennant's Case (1 WPC 125, n.) a material part of the invention claimed was found to have been suggested to the patentee by a chemist at Glasgow. Lord Ellenborough held that the patent was invalid, inter alia, because the grantee was not the inventor. It will be observed in this case, that although it is possible that the patentee was the first person to use the particular method for making bleaching liquor, nevertheless he was held not to be the inventor, because the particular method of producing this bleaching liquor was thought out by someone else and communicated to him. In Cornish v Keene (1 WPC 501 at 507), Tindal CJ said: 'Sometimes it is a material question to determine whether the party who got the patent was the real and original inventor or not; because these patents are granted as a reward, not only for the benefit conferred upon the public by the discovery, but also to the ingenuity of the first inventor; and although it is proved that it is a new discovery, so far as the world is concerned, yet if anybody is able to show that although that (ie the publication to the world) was new, that the party who got the patent was not the man whose ingenuity first discovered it, that he borrowed it from A or B, or had taken it from a book that was printed in England, and which was open to all the world - then, although the public had the benefit of it, it would be an important question whether he was the first and original inventor of it.' There is no doubt that, in the circumstances stated by the Chief Justice, the person obtaining the patent would not be the true and first inventor. The principle laid down in the cases cited above has invariably been followed. A may have invented something; he made have made a few experiments with the invention, and then abandoned it (without publication). B may subsequently have invented the same thing, altogether independently of A. If B applies for letters patent he is at law the first inventor; but if it is shown that the process of invention was not carried on in B's mind at all, but that A communicated his ideas to B, although with the full intention of abandoning them, B will not be the first inventor. … In Lewis v Marling (1 WPC 490 at 496) Bayley J, said: 'If I discover a thing for myself, it is no objection to my claim to a patent that another also has made the discovery, provided I first introduce it into public use.' (ie communicate the invention to the public in a specification.) The suggestion in that case was that the patentee had acquired his invention by seeing a model of a similar machine which had been brought from America. It was disproved that he had seen the model, and consequently he was held to be the first and true inventor. (And see Permutit Co v Borrowman 43 RPC 356 (PC) at 359)."

Stack v Davies Shephard

At a glance

Court

Decision date

Before

Source

Judgment (25 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (2)

Cited By (6)