11 March 2006

Federal Court Gives Lesson in Ownership

Conor Medsystems, Inc. v the University of British Colombia et al [2006] FCA 32

TOPICS: Entitlement to grant of a patent; joint patentees; one patentee not claiming through the inventor.

COURT: Federal Court

JUDGE: Finkelstein J

DATE OF ORDER: 3 February 2006

Introduction

The patents in this matter were granted jointly to Angiotech Pharmaceuticals, Inc. and the University of British Columbia, the respondents. Each patentee claimed title to the inventions by assignment from the US inventors.

In the case of the University of British Columbia, title was claimed from persons that the applicant claimed were not inventors. Thus, the applicant argued that the patent must be revoked.

The Law

Section 138(3) of the Patents Act 1990 allows a patent to be revoked if it was granted to a person not entitled to the patent. It is useful to set out section 15 (1) here:

Subject to this Act, a patent for an invention may only be granted to a
person who:
(a) is the inventor; or
(b) would, on the grant of a patent for the invention, be entitled to have the patent assigned to the person; or
(c) derives title to the invention from the inventor or a person mentioned in paragraph (b); or
(d) is the legal representative of a deceased person mentioned in paragraph (a), (b) or (c).

The Issue

The question was: "If a patent is granted to several persons, must each of them be or claim through, an inventor?"

The respondents argued that in section 138(3)(a), which provides for revocation where the patentee is not entitled to the invention, the words "the patentee is" must, in the case of a joint grant be read as "the patentees are". Therefore, they reasoned, a patent can only be revoked under that paragraph if all "the patentees [are] not entitled to the patent."

British History

His honour stepped back into the 1600's when "monopolies" were granted both for inventions originating in Britain and for imported inventions. He quoted Institutes by Sir Edward Coke: "The reason wherefore such a privilege is good in law is because the inventor bringeth to and for the common wealth a new manufacture by his invention, costs and charges, and therefore it is reason, that he should have a privilege for his reward (and the encouragement of others in the like) for a convenient time".

The first statute which regulated patents was the Statute of Monopolies of 1640. A patent could be granted to the "first and true inventor". The inventor was the person in whose mind the idea originated. Interestingly, however, in 1831, the inventor was also the person who first introduced the invention into the "realm".

The Patents, Designs and Trade Marks Act 1883 provided that any person could make an application for a patent or two or more persons could make joint application for a patent. At that time, a patent granted to several persons was valid even if only one of them was the "true and first inventor". Thus, "a capitalist" could advance money to a needy inventor and obtain an interest in a patent from the start.

Australian History

Some of the Australian colonies diverged from this. For example the Patents Act 1889 (Victoria) provided that the only person that could apply for a patent was the actual inventor, or his assigns or legal representatives or a person to whom the invention "had been communicated" by the "actual inventor" or his representatives or assigns.

The first Commonwealth statute was the Patents Act 1903 (Cth). This Act contained provisions modeled on the Victorian Act. This Act specifically stated that the actual inventor or his assignee, legal representative or any person to whom the invention has been communicated may make an application for a patent.

The explanation was given for this in 1903, when the Postmaster-General said that the monopoly should be granted to the inventor and the inventor only, since the world had "grown so much smaller". At the same time, during a debate concerning the words "actual inventor" Justice Higgins said that it means "the person whose brains have performed the work."

United States History

His honour then turned to the historical position in the United States. In 1888, Justice Gray of the Supreme Court delivered the opinion that: "The patent law makes it essential to the validity of a patent, that it shall be granted on the application, supported by the oath, of the original and first inventor.

Having regard to the US history, his honour presented some rules: (i) a valid patent can only be granted to the real inventor and if there be more than one inventor it must be granted to all; (ii) in the case of a joint invention, a patent issued to only one of the inventors is void; (iii) a patent issued in the names of joint patentees will also be void unless all of them are the inventors.

Concluding

Moving back to Australia, his honour held that the 1903 Act (supra) intended that a patent would be granted only to the "actual" inventor or a person claiming under him. Furthermore, a patent was not granted to the "actual" inventor if it was granted jointly to two or more persons, one of whom was not the inventor. His honour held that the position must be the same under the 1990 Act for there is no material difference in language.

His honour did not agree with the reasoning of the respondents (supra). His honour held that if one of the patentees is not entitled to the patent, then it is still correct to say that "the patentees are not entitled to the patent".

This case is useful in that it re-affirms the need for clear ownership of the invention by the applicant/s to avoid being vulnerable to an entitlement-based attack. In the event that the "actual" inventors are not the applicants, practitioners need to ensure that there is always a clear, documented transfer of ownership to the applicant/s.