29 January 2017

The Patent History of Australia’s Most Litigation-Prone (Former) Senator

From the Australian Parliament websiteI read a column today recommending that Australians ride out the Trump presidency by having a laugh at America’s expense – ‘we must’, the author extols us, ‘make sport of her in this high season of her weirdness, this peak of her fever, this pomp of her lunacy.’  Who knows, maybe this is good advice.  But it does have one major failing: right now Australian politics is itself hardly a bastion of seriousness and sanity.  And of all the buffoons and bloviators propelled into parliamentary prominence by last year’s farcical federal election, there is arguably none more compellingly attention-catching that ex-One Nation Western Australian senator (or, quite probably, ex-senator, unless you are asking him) Rodney Norman Culleton – a man whose submissions at a Federal Court bankruptcy hearing have been described by the Chief Justice of the court as ‘unfocused’ and ‘bombastic’.

It would be impossible to compress the continuous carnival that is Rod Culleton’s political career into an entire article, let alone a single paragraph.  But for the benefit of my international readers, I will do my best.  Culleton was propelled into the Senate at the election of 2 July 2016, grabbing the 11th (of 12) Western Australian seats despite receiving only 0.52% of the primary vote – of which the bulk (0.5%) was for One Nation as a party, rather than for Culleton personally – thanks to a byzantine cascade of preferences.  He succeeded despite (or because of) new voting rules that were intended to prevent minor candidates from getting elected off the back of byzantine cascades of preferences.  Even so, the legitimacy of his candidacy fell under a cloud, on account of the fact that he had been convicted of theft.  The conviction was subsequently quashed, but this does not alter the fact that at the time of voting he would have been barred from being elected under s 44(ii) of the Constitution.  With the High Court still considering that particular conundrum, Culleton then resigned from the One Nation party (the source of 96% of his primary vote), before being declared bankrupt by the Federal Court (just in time for Christmas), disqualifying him from remaining in parliament under s 44(iii) of the Constitution.  The bankruptcy orders were stayed, to give him time to appeal, but in the meantime his Senate seat was officially declared vacant.  Not that Culleton is fazed by such trivial setbacks – the official parliamentary website may have him listed as ‘Former Senator Rod Culleton (Independent)’, but the man himself has shown a marked preference for the ‘alternative fact’ that he is ‘still a senator’.  Through all of this, Culleton has become renowned for his ability make absolutely no sense whatsoever, and to become involved in physical altercations at the most inopportune moments.

And that is all in under six months.  So, aside from the fact that you would have to laugh, otherwise you would cry for the demise of Australian democracy, you might be wondering what any of this has got to do with the usual subject matter of this blog.  Well, as the former senator’s parliamentary web page states, Culleton’s qualifications and occupation before entering Federal Parliament include ‘business entrepreneur in farming, manufacturing, inventor and transport/logistics’, while his sole listed publication is ‘”Storage Bin”, 2015202345, Australian Divisional Patents, IP Australia, 2004’.  This connection came to my attention when I read that Culleton has accused former Wesfarmers director Dick Lester, who brought the proceedings to have Culleton declared bankrupt, of ‘abusing the bankruptcy process to get hold of Culleton’s Australian Keg Company patent in lieu of payment “to obtain what he wouldn’t otherwise have got”.’

Indeed, not only is Culleton an inventor, but one of his patents has even been successfully enforced after the infringer attempted to sue the Australian Keg Company for making unjustified threats of patent infringement.  I wrote briefly about that decision here, back in January 2014.  This is of some interest, because of course the overwhelming majority of patents are never litigated.  Yet Culleton appears to be a man drawn to the courts as inexorably as a moth to a flame!

The Invention and Patents

The Australian Keg Company Pty Ltd (‘Australian Keg’) initially filed a patent application (no. 2005282222) entitled ‘Storage Bin’ on 8 September 2005.  The sole inventor named in this application was Rodney Norman Culleton.  A divisional innovation patent (no. 2011101654) was subsequently filed on 15 December 2011.  It was this innovation patent that became the subject of Federal Court proceedings commenced in 2012.  The original application lapsed prior to grant, however a divisional standard application (no. 2012202885) was filed on 17 May 2012.  Maintaining a pending application in this way enabled the innovation patent to remain in force until the end of its eight-year term (on 8 September 2013) without violating the prohibition on ‘double patenting’ in s 64 of the Patents Act 1990.  The standard patent was granted on 28 May 2015.  A further divisional application (no. 2015202345) remains pending.

The Australian Keg patents and applications relate to field storage bins for containing and dispensing grain, and more particularly to such bins that are used to hold animal feed.  The problems with prior art bins are described in the patent specification as follows:

Field bins are commonly used on farms for storage of wheat. Known field bins typically comprise a metal frame structure and sheet metal assembled on the frame structure to provide a storage bin, with the frame structure supporting the storage bin in an elevated condition above the ground so as to provide access to an outlet on the underside of the bin through which stored grain can be discharged.
Field bins of this type can be relatively heavy and are not readily transportable from one location to another on a farm.
Further, the field bins can be laborious to construct as it is necessary to construct the frame structure and thereafter assemble the metal sheeting in order to provide the storage bin.
Still further, the field bins are susceptible to deterioration through rusting, owing to their metal construction.

Culleton’s invention provides a bin having a more practical and lightweight construction, comprising two sections – an upper storage section in which animal feed may be contained, and a lower section in the form of a base to support the storage section.  The bottom part of the storage section has an outlet with a sliding gate that can be operated between open and closed positions.  In the open position, animal feed is dispensed under gravity.  Both sections are made of plastics material.  Of course, the actual patent claims include substantially more detail of the structure of the bin, which is important for functional reasons, but this is sufficient to convey the main ideas: plastic construction; two parts; storage section sits on top of a base; and the whole structure arranged such that feed can ‘flow’ out effectively due to the force of gravity.

Particular embodiments of the invention are also formed so that the bin, or the separate sections, can be lifted and transported using a fork lift.  The plastic construction addresses problems with corrosion, while the two-section structure is said to have a number of advantages, including the ability to locate the base permanently on-site and to deliver only the upper section pre-filled with animal feed when required.

Infringement Proceedings

Stor-CubeOn 19 June 2012, Australian Keg’s patent attorneys wrote to patent attorneys representing N & E Bowder Pty Litd (‘Bowder’), alleging infringement of the innovation patent by the manufacture, marketing, sale and hiring of a product known as “Stor-Cube”.  An image of the Stor-Cube product is shown on the right.  It is fairly clear that it broadly replicates the features of the patented invention as I described them above, but the relevant legal question is whether it includes each and every one of the structural elements defined in detail in the patent claims.

Bowder – rather unwisely, as it turned out – decided to pull the trigger first, and commenced an action in the Federal Court of Australia alleging that the letter of 19 June 2012, and a further letter of 22 June 2012, constituted unjustified threats of patent infringement proceedings under section 128(1) of the Patents Act.  Australian Keg cross-claimed for infringement.

On 24 December 2013 (Culleton seems to have a particular knack for Christmas judgments) the court handed down an unusually economical judgment of just 32 paragraphs, finding that Bowder had in fact infringed the innovation patent and that the threats by Australian Keg were therefore not unjustified: N & E Bowder Pty Ltd v Australian Keg Company Pty Ltd [2013] FCA 1436.  (The succinctness of the decision is largely a result of the fact that Bowder had not challenged the validity of the patent, its only case being that the Stor-Cube did not infringe.)  This finding was upheld on appeal to a Full Bench of three judges of the Federal Court: N & E Bowder Pty Ltd v Australian Keg Company Pty Ltd [2014] FCAFC 114.

Conclusion – Company and Patents Still in Strife

So there you have it – whatever the final outcome of the bankruptcy proceedings, and of his battle in the High Court to retain his senate seat, Rod Culleton has at least one Federal Court victory behind him.

Unfortunately, it is not apparent that this will save his Australian Keg Company, or its remaining patent and application.  On 29 November 2016, the Australian corporate regulator, ASIC, issued a notice indicating its intention to deregister the Australian Keg Company Pty Ltd.  Furthermore, there are annual maintenance fees outstanding on both Australian patent no. 2012202885 and the pending application no. 2015202345.  If these fees are not paid, along with a surcharge for late payment, by 8 March 2017 they will both lapse.

It seems that the (former) senator and his business interests are going through a difficult time.  For all the entertainment he has provided, if nothing else, I hope he has the strength to battle through it all and come out on the other side.  But if, as seems likely, Culleton does not make it back to parliament, at least there are plenty of other jokers there to keep us laughing, crying, or stoking our outrage!


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