15 December 2011

Federal Court Notes Possible Drafting Error in Patents Act

DSI Australia (Holdings) Pty Ltd v Garford Pty Ltd [2011] FCA 1411 (7 December 2011)

Amendments – application to Federal Court for direction to amend patent – correction of claim dependency

Obvious mistake!In an otherwise unremarkable decision, directing the correction of a trivial error in the claims of a patent owned by Garford Pty Ltd, Justice Yates in the Federal Court of Australia has noted, in passing, a possible oversight in the drafting of the Australian Patents Act 1990 (‘the Act’).

In particular, on one interpretation of section 105 and section 102 of the Act, a court may be barred from directing an amendment to correct a clerical error or an obvious mistake.  If this interpretation were correct, then it would also apply to correction of such errors by direct application to the Patent Office under section 104 of the Act.  This would be a disturbing flaw in the drafting of the Act which could significantly complicate the making of certain amendments which should, in fact, be the simplest cases.

BACKGROUND

In this instance, Garford is the proprietor of Australian patent no. 770594.  Garford had presumably accused DSI Australia (Holdings) Pty Ltd (‘DSI’) of patent infringement, since DSI has taken the initiative of commencing action in the Federal Court of Australia for unjustified threats of infringement proceedings (under section 128 of the Act), thereby forcing Garford to counter-sue for infringement.

However, there was an obvious mistake in Garford’s patent, namely that claim 6 had been erroneously made dependent upon claim 4, rather than claim 5 as clearly intended.

For those unfamiliar with the details of patent claims, you can take our word that this is the kind of error which is typically (and in this case) immediately obvious once spotted, and the appropriate correction is also immediately apparent.  In other words, nobody with any experience reading patents would have any trouble noting the error, or mentally substituting the correct reference.

Such errors qualify as ‘obvious mistakes’, and the intent of the Act is clearly that genuinely obvious mistakes should be correctable, even if they would not otherwise satisfy substantive requirements for the allowability of amendments.

THE POTENTIAL PROBLEM

Amendments that are not generally allowable are specified by section 102 of the Act.  For example, once a patent has been accepted it is not permissible to make an amendment which would broaden the scope of the claims (subsection 102(2)).  However, subsection 102(3) provides that the ‘section does not apply to an amendment for the purpose of correcting a clerical error or an obvious mistake…’.

As has been noted in this decision, the wording of sections 104 and 105 is therefore potentially problematic.  Subsection 104(5) provides that ‘the Commissioner must not allow an amendment that is not allowable under section 102’, while subsection 105(4) similarly provides that the ‘court is not to direct an amendment that is not allowable under section 102.’

Justice Yates noted a potential issue with the way these provisions are drafted (at [14]):

As noted above, s 102(3) provides that s 102 does not apply to an amendment for the purpose of correcting a clerical error or an obvious mistake made in or in relation to a complete specification. I am inclined to the view that the reference in claim 6 to claim 4 is at least an obvious mistake. However, s 105(4) provides that a court is not to direct an amendment that is not allowable under s 102. That provision raises what might be a tension with s 102(3) of the Act.

In other words, if the court is not permitted to direct an amendment not allowed by section 102, then amendments that are expressly excluded from the ambit of section 102 might fall outside the power of the court to direct.

If this is so, then the same issue would also arise in relation to subsection 104(5), which is expressed in like terms.

HOW THE MATTER STANDS

Unfortunately, the question remains unresolved, because Justice Yates further determined that:

[i]t is not necessary for me to resolve that question, because I am satisfied that the amendment which is now proposed would not fall foul of either s 102(1) or s102(2) of the Act.

It may be, therefore, that there is a ticking time-bomb in the Act just waiting to be exploited by the next enterprising opponent to an amendment!

IS THERE A PROBLEM?

Our own view is that there is not a problem with the drafting of the Act, other than that it could have been clearer if it had relied on fewer double-negatives!

An alternative, and equally-available, interpretation of the relevant provisions is that sections 104 and 105 empower the Commissioner of Patents and the court, respectively, to direct that allowable amendments may be made to a patent (or application).  This is, generally, a discretionary power, except that it is not permitted to direct the making of an amendment that is not allowable under section 102.

While the double negative complicates interpretation slightly, we think that the better view is that the only amendments that are barred by the Act are those which are expressly not allowable under subsections 102(1) and (2).  Amendments that are excluded from non-allowability under subsection 102(3) are thus not non-allowed under section 102.  If that makes sense…

This is undeniably the kind of issue that clever barristers are adept at whipping up into genuine doubts.  But a sensible, and completely justifiable, interpretation is that allowing an amendment for the purpose of correcting a clerical error or an obvious mistake is not expressly prohibited under subsection 104(5) or subsection 105(4), and is subject only to the discretion of the Commissioner or the court, respectively. 

We are unaware of any past case in which this interpretation has been in question, and doubtless many clerical errors and obvious mistakes have been corrected over the years!

CONCLUSION

It is a shame that Justice Yates did not undertake the exercise of interpretation in this case.  Opponents to amendments intended to correct clerical errors or obvious mistakes – now that the seed of the idea has been planted – may start using this argument to frustrate patent holders, to the detriment of the public, which is better served by patent specifications and claims which do not contain readily-correctable errors.

Even if Justice Yates had sided with DSI on this occasion, the Act could easily have been amended, probably by way of an addition to the Raising the Bar Bill 2011, which is already before the Senate.  Indeed, there may be something to be said for taking the opportunity to tweak the language of the Act to ensure that the alternative interpretations of the amendment provisions are not available in the future.

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