Rectifying Errors on the Patent Register: Court Orders

The present article is our sixth in the series discussing patent ownership and entitlement, following on from our previous topics of discussion concerning: (i) how patent ownership is distinct from the concept of entitlement, (ii) how entitlement disputes between joint applicants may be resolved, (iii) how eligible persons can seek to apply for a determination on entitlement under the Patents Act (“the Act”), (iv) how grant of a patent may be opposed if the Applicant listed is not truly entitled to the invention at hand, and (v) how the Commissioner’s power may be used to rectify errors recorded on the patent Register. This article will discuss in some detail, how the Court may also rectify errors wrongfully recorded on the patent Register.  

Section 192 of the Act details the provisions under which the Court holds power to correct errors on the patent Register.

To exemplify one scenario in which Section 192 was relied upon, we refer to the case of Neobev Pty Ltd v Bacchus Distillery Pty Ltd (Administrators Appointed) (No 3) [2014] FCA 4.

Neobev v Bacchus Distillery: Background

In the above case, the invention related to a process for producing clean wine spirits which has no acidity, flavour or odour, a clean appearance, being pH neutral and has an alcohol percentage of 22%, so that it can be used for making cream liqueur products.

In brief, Mr Scott was the owner of Neobev, a company which supplied flavours and emulsifiers to the food and beverage industry. It was suggested to Mr Scott that he contacts Mr Hajdinjak at Bacchus Distillery, which sought to develop its own cream liqueur product. Following some discussions, an agreement was eventually reached between Bacchus and Mr Scott, whereby Bacchus agreed to maintain and install the plant and equipment required for producing the product, with Mr Scott agreeing to act as project manager for the designing and installing of the plant. Mr Scott also agreed to provide his know-how and recipes, processes and testing procedures for developing the cream liqueur product. Eventually, Mr Scott was successful in developing a stage filtration process which is the invention of the subject specification at hand.

A draft written proposal for the sharing of intellectual property for the clean wine spirit technology was prepared, in which Mr Hajdinjak proposed ownership be split 60% to Bacchus and 40% to Mr Scott. However, upon learning of this proposal, Mr Scott proposed that Bacchus should instead have sole ownership of the invention, since it was his understanding that Bacchus needed to own the patent to receive a government grant, provided that Bacchus agreed to give him 40% of the profits. In light of these differences in opinions, no set agreement was reached between the two parties, let alone was there a written contract detailing the arrangements. Despite this, Mr Scott sent regular invoices to Bacchus for royalties calculated on an agreed basis, the arrangement of which continued until Bacchus ceased production in August 2013.

The Patent

With respect to the intellectual property, a provisional specification was filed in the name of Bacchus, with Mr Scott being listed as the sole inventor. An international PCT application was subsequently filed, claiming priority from the provisional application. There was both an Australian application and also a New Zealand patent application, both of which listed Bacchus as the Applicant or nominated person and Mr Scott and Mr Hajdinjak as co-inventors. For the New Zealand application, a statement was provided to accompany the application, claiming that Mr Scott and Mr Hajdinjak were co-inventors and that Bacchus’ right to apply for the patent was “by virtue of assignment”. A notice of entitlement was also filed on the Australian patent application, claiming that Bacchus was entitled “by virtue of a contract of employment”. Both the Australian and New Zealand patent applications proceeded to grant. In addition to these applications and prior to grant of the Australian application, a further Australian divisional patent application was filed, together with a notice of entitlement stating that Bacchus was entitled “by virtue of a contact of employment”.

On assessing ownership, the Judge in this case examined the respective contributions of Mr Scott and Mr Hajdinjak to the clean wine spirit invention, as a starting point, reciting the case of Polwood Pty Ltd and Others v Foxworth Pty Ltd and Others [2008] FCAFC 9; 165 FCR 527, in which the Full Court considered the concept of joint inventorship.

Joint Patent Ownership Precedent: Polwood v Foxworth

The case of Polwood v Foxworth is one that is frequently referred to, since it outlines some important considerations that should be given when assessing joint inventorship. Briefly, the principles of Polwood v Foxworth includes the following considerations:

  1. Whether someone is properly described as a joint inventor is not determined by quantitative contribution, but rather by qualitative contribution. In other words, the contribution does not have to be equal to the other person’s contribution. Instead the key question is whether there has been a contribution to the invention at hand.
  2. In some cases, it may be helpful to look to the claims and in some cases evidence may assist with determining entitlement. Emphasising that it is important to look towards what the invention is said to be.
  3. It is therefore important to consider whether the person’s contribution had a material effect on the final invention.
  4.  It is sometimes useful to approach the issue by asking who conceived the solution to a problem. However, it is important to note that not all inventions utilise a problem-solution approach.
  5. Rights to an invention are determined by objectively assessing contributions to the invention rather than assessing the inventiveness of respective contributions and if the final concept of the invention would not have come about without a particular person’s involvement, then that person has an entitlement to the invention.
  6. A person may also be considered a joint inventor where they had a general idea of what was required, but someone else was required to put the ideas into practice.

The Decision

Taking into account these principles and upon assessing the evidence, the Judge accepted that Mr Hajdinjak had no real knowledge of the different filtration methods, given that he never mentioned or discussed anything with Mr Scott in relation to the processes of nano filtration or ion exchange, let alone did he have any suggestions for solving the problem at hand. The evidence was clear that Mr Hajdinjak did not conduct many tests that contributed materially to the invention. In fact, Mr Hajdinjak only carried out tests as suggested by Mr Scott and to determine whether the suggested processes were commercially viable.

Mr Scott admitted that he understood that a person who plays a part in the commercialisation of the invention is not the inventor and accepted that Mr Hajdinjak only assisted with the commercialisation process. However, the applications listed Mr Hajdinjak as a co-inventor because “he had wanted his name on the patent”.

Consequently, it was concluded that Mr Scott was the sole inventor of the clean wine spirit invention. The Register was accordingly rectified pursuant to Section 192 of the Patents Act.

Take Aways

As demonstrated by the above case study, having a granted patent therefore does not render Applicants invincible to future challenges to patent ownership. Ideally, in the interest of reducing costs and the deterioration of professional and business relationships, it is generally advised that any entitlement and ownership issues are resolved early in the patent application process. Our next article discusses how the Applicant or the nominated person may apply to amend their name and in doing so, the relevant provisions of the Act that permit for these amendments to be made.

If you have any questions in relation to the above article or patent ownership and/or entitlement in general, please do not hesitate to contact our team at Michael Buck IP. Our attorneys will be pleased to assist you.