IP Spotlight 9 February 2021

OVERLAPPING ISSUES: Evidence on insufficiency can lead to a lack of entitlement claim

SARB’S CASE FOR LEAVE TO AMEND SARB submitted that C’s evidence regarding the work he had done on developing parking stay detection as described in the patents was relevant to supporting its pleas of invalidity on the grounds of insufficiency and lack of best method. In particular, SARB submitted that W was not able to produce a working embodiment of the claimed invention and C performed complex, detailed and innovative work to enable VMS to produce a working embodiment. Besanko J understood SARB’s argument to convey that C’s work involved inventive effort without which VMS could not make the invention work, the work not being described in the specifications. The facts and issues relating to the existing pleas of insufficiency and lack of best method and the facts and issues relevant to the proposed plea of a lack of entitlement appeared to overlap. C’s evidence was relevant to all of these issues. VMS CASE AGA I NST LEAVE TO AMEND VMS argued that the proposed plea for lack of entitlement lacked proper particulars. Further, C’s evidence lacked clarity as to the nature or extent of his contribution (if any) to the invention and the case was such a weak one that the judge could be satisfied that the patents would not be revoked. CONS I DERAT ION I N V I EW OF LAW ON I NVENTORSH I P The issue of inventorship involves two inquiries, settled in the case law: 1. The court must determine the nature of the inventive concept of the patent in issue which raises an issue of construction of the patent specification. 2. The court must analyse whether the alleged inventor or co-inventor made a qualitative contribution that had a material effect on the inventive concept. VMS had submitted that the proposed entitlement evidence was unclear as to the nature of alleged inventor C’s contribution and that SARB’s case was not apparent on the evidence or the proposed plea. VMS further submitted that there was no evidence that C had raised any issue of entitlement previously and pointed to two documents – a Share Subscription Agreement and a Confidential Disclosure Deed both relating to the patented parking detection system – of which the first identified W as the sole inventor and the second provided that C would not assert rights of any nature over confidential information relating to the parking detection system.

Besanko J did not consider the proposed plea of lack of entitlement to be inadequate. The plea was properly particularised and arguable even in view of the substantial evidence of C’s acknowledgement of W as the inventor of the patented invention. The issue was one of fact and law for determination at trial, not at interlocutory hearing. OTHER FACTORS – PREJUD I CE TO VMS AND SARB EXPLANAT ION OF NEED FOR AMENDMENT On prejudice, Besanko J opined that an important matter in favour of granting leave to amend was the factual overlap between the existing pleas of insufficiency and lack of best method and the proposed plea of lack of entitlement. Further, though VMS would need to adjust its planning for the trial, it had not asserted that it could not be ready if leave to add the plea of lack of entitlement was granted. SARB was on less sure ground on its delay in seeking leave to amend but, in the end, this did not outweigh factors in favour of granting leave to amend. CONCLUS ION The case helpfully identifies that a plea of lack of entitlement must identify: – The relevant claim features – here the features of the method, apparatus or system for parking detection. – The claim features invented by the putative inventor(s)/ co-inventor(s) and already named inventor(s). While a Federal Court case, following this guidance will also be helpful in patent opposition cases where a lack of entitlement issue is raised. Further, parties should be aware that evidence on insufficiency or best method issues may raise contentions about inventorship with the issues, in an appropriate case, potentially being considered overlapping.

The foregoing article discusses the recent Australian Federal Court decision reported as Vehicle Monitoring Systems Pty Limited v SARB Management Group Pty Ltd trading as Database Consultants Australia (No 6) [2020] FCA 1866. Vehicle Monitoring Systems (VMS) sought relief from SARB Management Group and the City of Melbourne (collectively SARB) for infringement of patents relating to parking overstay detection for which Fraser Welch (W) was named inventor. SARB cross-claimed seeking revocation of the VMS patents on various grounds including insufficiency and lack of disclosure of best method. SARB, having made two previous amendments to its cross- claim, sought leave to amend its cross-claim to raise VMS lack of entitlement to the patents. VMS opposed leave to make this amendment.

RELEVANT FACTORS ON LEAVE TO AMEND CROSS- CLA IM Besanko J outlined three factors going to whether leave to amend should be granted to SARB: 1. The nature of the amendments and their importance to SARB as the cross-claimant. 2. The prejudice to VMS as the cross-respondent if the amendments are allowed. 3. SARB’s explanation for seeking the amendments at this stage in the proceeding. Besanko J considered the proposed lack of entitlement plea, based on the allegation that VMS had not derived title from an alleged inventor: Peter Crowhurst (C) who had given evidence on sub poena. The lack of entitlement plea is reproduced in full in the decision.

RICHARD BADDELEY Principal

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