The Supreme Court of New South Wales recently considered the question of whether the incorporation of confidential information into a PCT Patent Application by an asserted inventor, who was not subsequently named as an inventor, constituted a breach of confidence.

In Con Kafataris & Ors v Cory Davis & Ors [2014], Mr. Kafataris claimed that there had been misuse of his confidential information by the cited inventor, Mr. Thomas, and by the Applicant of PCT Patent Application PCT/AU2013/000342, Mr. Davis. He also sought a Declaration of Inventorship of the PCT Patent Application, within the meaning of Section 15 of the Patents Act 1990 (Cth).

This case is of interest because it involves the use of information that was provided by a person, other than the named inventor, in the drafting of a Patent Specification. Mr. Kafataris, who provided the information for inclusion in the Patent Specification, did so assuming that he was to be cited as an inventor. However, he was not. The issues therefore related to: (1) whether Mr. Kafataris should have been cited as an inventor; and (2) whether the use of the information that he provided constituted a breach of confidence.

The Background to the Dispute

The PCT Patent Application claimed priority from an Australian Provisional Patent Application, which described a baccarat game with a supplementary betting option. The Provisional Patent Application, which named Mr. Thomas as the sole inventor, was assigned to Mr. Davis.

Before filing the PCT Patent Application, Mr. Thomas and Mr. Davis had entered into business discussions with Mr. Kafataris.  During the commercial negotiations, Mr. Kafataris forwarded his suggestions regarding the invention to Mr. Davis’ Patent Attorney, wherein he proposed the inclusion of a secondary betting option to the game of blackjack. This aspect was added to the Specification of the PCT Patent Application.  Mr. Kafataris also provided assistance with the calculations of the playing odds that casinos may adopt when using the invention. He also introduced Mr. Thomas and Mr. Davis to contacts in the casino business in an attempt to set up possible licensing opportunities.

The difference between the Specifications of the Provisional Patent Application and the PCT Patent Application was that the Provisional Application exemplified baccarat only. The PCT Patent Application, however, related more broadly to a method of wagering on a card game, in which a player has a secondary bet or wager option, described within the context of both baccarat and blackjack. 

When the PCT Patent Application was filed, Mr. Kafataris was not named as an inventor, a situation that he subsequently contested.  He asserted that he had made a material contribution to the invention as set out in the PCT Patent Application.  He also alleged that the information provided to Mr Davis’ Patent Attorney had been confidential and should not have been included in the PCT Patent Application, which was later published, without acknowledging his contribution.

Mr. Thomas and Mr. Davis argued that the development that had been described by Mr. Kafataris was already covered in the terms of the Provisional Patent Application, or was merely an application of the invention that would have been obvious to a person skilled in the art, and was not a material contribution to the invention.

The issue before the Supreme Court of New South Wales was whether Mr. Kafataris had made a material contribution to the invention as described in the PCT Patent Application that would warrant his being named as an inventor.  The Court also considered whether the incorporation of this information in the PCT Patent Application constituted a breach of confidence.

The Decision

The Court referred to various precedent case law and applied the test for inventorship, as set out in University of Western Australia v Gray (2008) 82 IPR 206. That is, the Court assessed whether Mr. Kafataris had made a material contribution to the invention.  On the basis of correspondence between Mr. Kafataris and Mr. Davis’ Patent Attorney, the Court stated that it was not satisfied that Mr. Kafataris was an inventor of the PCT Patent Application. His evidence was regarded as imprecise in describing any real detail of what he had invented, and the extent of his analyses were regarded as exaggerated.

Mr. Thomas and Mr. Davis argued that the information provided by Mr. Kafataris comprised two odds spreadsheets and a blackjack rules document, which contained publicly available information, as well as a document that Mr. Kafataris had obtained from Mr. Thomas and Mr. Davis. 

The Court found that the information was not necessarily confidential and nor was it imparted in circumstances importing an obligation of confidence.  Mr. Kafataris was regarded as having not done anything other than to consent or authorise the inclusion of his confidential information into the PCT Patent Application. 

Accordingly, his application for a Declaration of Inventorship was refused, and his claim for a breach of equitable obligation of confidence failed.

Take home message

If a third party voluntarily provides information, confidential or otherwise, for incorporation into the Specification of a Patent Application, then such actions will be taken as consent to use that information for that purpose. That same third party cannot claim that there has been a breach of confidence in circumstances, where they are subsequently not named as an inventor of the Application.

This case is also a useful reminder of the kinds of problems that can arise during the commercialisation of an invention that is the subject of a Provisional Patent Application.  It is frequently the case that a Patent Attorney is required to correspond with a third party while preparing a PCT Patent application, and to include information obtained from third parties in the Specification, on the instructions of the Client. It is advisable that any third parties assisting in providing information for the drafting of a Patent Specification are made fully aware of the status of their contribution and whether or not it amounts to inventorship before entitlement disputes arise.