Weatherford Australia Pty Ltd v Screenex Pty Ltd [2009] FCA 331.

Synopsis

Pursuant to section 105(1), an Australian Court may direct amendment of a patent, patent request or a complete specification upon application by a patentee. Any direction given is entirely discretionary and this decision represents the first instance where this discretionary power has been exercised in favour of a patentee's application to amend an error in the patent request. The case explains the criteria to be considered by a Court before allowing or refusing a post-grant amendment under section 105.

FACTS OF THE CASE

The Applicants ('Weatherford') applied to the Court pursuant to section 105(1) to amend the patent request in respect of a granted patent. Section 105(1) of the Act reads:

“In any relevant proceedings in relation to a patent, the court may, on the application of the patentee, by order direct the amendment of the patent, the patent request or the complete specification in the manner specified in the order.“

The patent request erroneously claimed divisional status from a grandparent application instead of the parent application. The grandparent application had proceeded to grant prior to filing the application in suit and was therefore not available as a basis for claiming divisional status. Weatherford sought an order from the Court to amend the patent request so that the patent could claim divisional status from the parent application, rather than the grandparent application. They also sought an order for rectification of the register (pursuant to section 192).

The error went unnoticed by the original applicant, patentee and the Patent Office for many years but was raised by the attorneys for the Applicants during separate infringement/revocation proceedings.

Screenex opposed Weatherford's application under section 105 arguing that the amendment of the patent request would entitle Weatherford to a priority date earlier than that which it would be otherwise entitled. Allowing the amendment would, according to Screenex, substantially alter the balance of the parties' rights and obligations with respect to the issues in the revocation proceeding.

THE DECISION

Jessup J clarified that section 105 includes within its ambit the ability of a Court to direct an amendment which could remove a potential ground of invalidity, but was mindful that the granting of the amendment may give the Applicants a range of rights that they did not previously have, or may serve to deny Screenex a defence otherwise available. The Court, however, considered that the more important question was whether the granting of the amendment would allow the Applicants to take unfair advantage of the error which it now sought to correct, or whether the amendment would unfairly prejudice Screenex in the sense of leaving it in a less favourable position than it would have occupied if the correct details had been included in the patent request when originally made.

In the Court's view, the amendment was to merely give formal expression to a situation which, in a practical sense, corresponded with that which would have appeared to

anyone searching the register at the time. As such, the Court found it difficult to see how Screenex would be prejudiced by the grant of the motion. The Court referred to SmithKline and French Laboratories Ltd v Evans Medical Limited [1989] 1 FSR 561, 569 ('SmithKline v Evans'), which stated, inter alia, that “a patentee who seeks to obtain an unfair advantage from a patent, which he knows or should have known should be amended“ would not be allowed to amend. Jessup J commented that it was important that the amendment was sought promptly once the error had been recognised and that a patentee who knowingly defers action to amend, thereby taking opportunistic advantage of the existence of the error, is unlikely to be in the strong position to call for the favourable exercise of the Court's discretion under section 105. The Court concluded that the requested amendment was allowable, considered that the natural course was to make the amendment operative from the date the error occurred, thus denying Screenex the defence of invalidity based on lack of novelty. Weatherford also filed a motion under section 192(1) for amendment of the register to indicate the correct details of the divisional patent. Section 192(1) allows rectification of the register under certain circumstances by a “person aggrieved“. As Weatherford's predecessor made the error, Screenex argued that Weatherford did not have the quality of innocence which the word “aggrieved“ implies. The Court did not accept this submission. In reply, Jessup J clarified that the term “person aggrieved“ was “commonly used in legislation to refer to a person who is disadvantage by an event or state of affairs and who has a legitimate interest in the achievement of the correction, compensation or other remedial outcome for which the statute in question provides.“ As such, the Court held that the error was an error envisaged by section 192(1)(d) (an “error or defect“ in an entry in the register) and hence allowed Weatherford's motion to rectify the register. In this regard the Court considered that the granting of Applicants' request to amend the register should be regarded as consequential upon the granting of the motion under section 105.

COMMENTARY

While there have been numerous other cases where a Court has allowed post-grant amendments under section 105 (e.g., JMVB Enterprises Pty Ltd v Camoflag Pty Ltd [2005] FCA 1474 and Novartis AG v Bausch & Lomb (Australia) Pty Ltd (2004) 62 IPR 71) there are others where the Court has decided not to exercise its discretion (e.g., GS Technology Pty Ltd v Elster Metering Pty Ltd [2008] FCA 17). Each of these decisions is dependent on the facts of the particular case and as such it is often difficult to provide guidance in relation to the circumstances where a Court is likely to exercise its discretion favourably to an amendment application.

However the Courts still appear to rely on the dicta in SmithKline v Evans which outlined the following criteria for future Courts to consider before exercising their discretion under section 105:

(i) the onus to establish that the amendment should be allowed is upon the patentee and full disclosure must be made of all relevant matters;

(ii) amendments will be allowed provided that the amendments are permitted under the Act and no circumstances arise which would lead the Court to refuse the amendment;

(iii) it is in the public interest that the amendment is sought promptly (unless the patentee shows reasonable grounds for the delay);

(iv) a patentee who seeks to obtain an unfair advantage from a patent, which he knows or should have known should be amended, will not be allowed to amend (e.g., whether a patentee threatens infringement after knowledge of the existence of the need to amend).

The present case represents what appears to be the first instance where a Court has allowed a patentee to amend a patent request under section 105. In the decision considerable weight appears to have been placed on the realisation that the error would have been apparent to anyone searching the register. It is therefore unclear whether a future Court would follow the approach of Jessup J in a situation where the nature of the error on the patent request would not have been apparent or obvious from a review of the register.