True Stories - Cutting out the Inventor

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TRUE STORY - Cutting out the Inventor

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“My name is Trevor Dredge and I am a registered Patent Attorney. I have been in the Patent and Trade Mark profession since 1982, firstly as a Patent Examiner in Canberra at the Patent Office and then in private practice since 1986. I have been registered as an Australian Patent Attorney since 1991. During this time I have encountered some amazing cases with many twists and turns and I have learnt many lessons in the areas of Patents and Trade Marks. In this section, I discuss some of the true stories that have come across my desk. Obviously the names and circumstances have been changed to keep parties anonymous. You will get some valuable insights from these true stories”.

One of the most emotive areas of Patent Law is the area dealing with disputes between inventors. If is no fun to have your invention 'stolen' by someone with whom you shared your idea. Sometimes the situation is more 'grey' with an inventor collaborating with others whose contribution qualifies them as a co-owner of that invention. This can lead to disputes between the parties. A party who is 'cut out' of an invention can seek legal redress. This involves the lodgement of evidence and ultimately a Hearing, usually in Canberra, and this can be a costly procedure.

The Facts

One case involved an expert in the production of stock feed (let's call him 'Jim') and an expert in the production of coated seeds (let's call him 'Bob'). The story went something like this. Jim had learned that cotton seed, a by-product of cotton refining, could be bought cheaply and had nutritional value as a stock feed. However, the problem with the cotton seed by-product was its tendency to "ball", so that it lacked the ability to flow. He then had the idea of coating the seed with other nutritional factors to create a pellet form giving the advantage of a complete supplement that contained the nutritional factors in the cotton seed as well as the other nutritional factors, all in a flowable form. Jim however, did not have the requisite skills to enable him to coat the cotton seed himself.

A nearby business coated seeds for horticulture. Jim decided to approach the owner of that business, Bob, to discuss his idea.

Jim and Bob got on well. Jim brought along a sample of cotton seed and the other nutritional materials to Bob and the two collaborated, with Bob proceeding to demonstrate the process by which Jim's seeds could be coated. The idea worked well. There was no agreement in writing between Jim and Bob.

Jim delayed filing a patent application, in fact there was no evidence the parties even discussed filing of a Patent Application or the terms of any agreement that they may have in relation to any future collaboration or in relation to exploitation of the idea. In the meantime Bob (without Jim's knowledge) had filed a Patent Application evidently believing that the central inventive aspect was solely in his seed coating contribution. The Patent Application did not name Jim as the stock feed expert at all. The two businesses were located geographically nearby in a small town and Jim had heard “on the grapevine” that a Patent Application had been filed by Bob. Jim went to the Patent Office and carried out a search and identified that a “Provisional Patent Application” had in fact been filed by Bob for what he felt was his idea in the first place.

I got involved when Jim rang me one day wanting an appointment to see me urgently.

My Advice

I explained to Jim, that the area of Patent Law was known as “obtaining”, this means that the person applying for the patent “obtained” the invention from the true inventor without proper entitlement. Under these circumstances through a process of disputed evidence and a Hearing, a decision can be made that ultimately results in the patent being granted in the name of the true inventor. I explained to Jim that since the process involved evidence from both sides and a Hearing, it could become an expensive process. The process can involve many witnesses with initial evidence in Statutory Declaration form and later cross examination of witnesses.

If you win an Application, the judge can order the losing party to pay your legal costs but you don't get the full amount as it is based on a Court scale (a bit like Medicare). I identified one fatal weakness in Jim's case that would be difficult to overcome. It is conceivable that if my client realised the potential for the use of surplus cotton seed that was readily available in the area at the time that this may also have been recognised by others including Bob as the seed coating expert. If Bob was able to provide credible evidence that his company was already working on the same project and at the time Jim talked with him, Jim simply chose to keep quiet during Jim's demonstration then immediately raced to the Patent Office to beat Jim, then our claim would fail.

The outcome of this type of evidence would simply mean that Bob had won the race to the Patent Office based on independent lines of research.

I told Jim about a similar case that I had had in the past involving two brothers. The brothers had a history of business ventures they had collaborated on. Now on a new project, although the brothers had collaborated to a degree, one brother filed the Patent Application solely in his own name. In evidence he claimed that he had been carrying out his own independent tests resulting in the invention and even though he later discussed his findings with his brother he was entitled solely to the invention in his own right since he had made the important discoveries before speaking with his brother. His brother claimed that they had made the developments together. Many facts were disputed, but at the end of the day it was one persons word against the other and up to the burden rests with the person who has not filed the Patent Application to prove the case. In that case the Hearing Officer found that the offended brother had not proven his case and the application proceeded in the name of the first brother solely. The second brother failed to have his name added to the Patent Application. (one wonders if they ever attended family gatherings again after that!)

Always file a provisional patent application as the first step in protecting your idea. If you have to engage a consultant or talk to any other form of collaborator, then do so only on the basis of a signed confidential disclosure agreement that refers to your patent application and also includes an assignment component so that you can be sure that you own any contributions made by the consultant. Had Jim done this before speaking to Bob, things would have turned out differently.

What Happened?

Jim instructed me to maintain a watch on Bob's patent application and when the complete application was published to obtain a copy so we could check to see if it contained Jims invention. When it was published we were able to confirm that it did in fact contain the invention in dispute. My client Jim was an older gentleman in his late sixties and when he considered all the issues including the prospect of legal costs ranging between $10,000 and even $20,000 with no guarantee of success, he unfortunately decided to let the matter go.

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