ABSTRACTS OF DECISIONS

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Application	:	No.  2005248944 in the name of Speedo International Limited

Title	:	Articles of Clothing

Action	:	Opposition under section 59 by Ying Fa and a request by the opponent for Security of Costs under section 219 

Decision	:	Issued   9 February 2010          .

Abstract

Opponent’s request for security of costs is refused.

As a statutory position, the Commissioner is part of the Executive arm of Government.  The powers are administrative in nature and limited by the specific confines of legislation. 

The only legislative power the Commissioner has to order security of costs is under the Patents Act (Section 219).  However this provision only allows the Commissioner to order a security of costs from an opponent not from the patent applicant.  As the Commissioner has no power to require a security of costs from the applicant, I formally refuse the opponent’s request.  

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:  Patent Application No.  2005248944 by Speedo International Limited, opposition thereto under section 59 by Ying Fa and a request by the opponent for security of costs under section 219
	
BACKGROUND
1.	Patent application 2005248944 was filed on 23 December 2005 in the name of Speedo International Limited as a divisional application of 72340/00.   The parent application had been filed on 18 December 2000 claiming priority from a UK basic application (9929867) filed on 17 December 1999.  The parent lapsed under section 142(2)(e) for failure to gain acceptance within the period prescribed by the regulations.

2.	The Divisional application was advertised accepted on 12 February 2009 and a Notice of Opposition was filed by Ying Fa on 12 May 2009.  The opponent served their Statement of Grounds and Particulars (SGP) on 12 August 2009 followed by their evidence in support on 19 November 2009.  Evidence in answer was therefore initially due on 19 February 2010.  

3.	The opponent requested the Commissioner order a security of costs from the applicant (in a  letter dated 17 November 2009).  The opponent argued that in court proceedings, where an applicant is normally resident outside of Australia and has no assets in the jurisdiction, there must be a weighty reason why an order for security of costs should not be made.  The opponent requested that the Commissioner follow court practice and award an initial Security of Costs from the applicant (or their patent attorneys) of $30 000 to be “topped up” later as the matter proceeded.  

4.	The applicant argued that the Commissioner had no power to order security of costs from an applicant because section 219 of the Patents Act 1990 was limited to requiring a security from an opponent (or appellant).  The opponent counter-argued that section 219 only applies where the litigant is a natural person.  In cases where the litigant is a corporation, the opponent suggested that section 1335(1) of the Corporation Act [2001]  applies and that it would ordinarily be “appropriate for a Commission/Court to exercise its jurisdiction and order an impecunious corporate applicant/plaintiff to provide security”.

5.	Given the disparate views, the Commissioner set the matter for hearing with the decision based on written submissions provided by both parties.  

NATURE OF OPPOSITION PROCEEDINGS BEFORE THE COMMISSIONER

6.	Under section 59, third parties can oppose the grant of a standard patent of the Patents Act 1990.  Section 60(1) empowers the “Commissioner of Patents” to hear and decide such dispute with parties having the right to appeal this decision to the Federal Court under section 60(4).

7.	Opposition disputes before the Commissioner of Patents (hereafter the Commissioner) are inter partes and involve a formal evidentiary process and hearing.  They are however not court proceedings and the Commissioner has no judicial power.  Judicial power is created under section 71 of the Australian Constitution.  It provides a the Courts with a broad and discretionary power to determine disputes concerning the law.  

8.	In contrast,  the Commissioner is part of the Executive branch of Government.  Under section 61 of the Constitution, this branch of government has the power to administer (or execute) Parliament’s laws.  Because of its nature, executive power requires specific legislation (from Parliament) to enliven. 

9.	The Commissioner is a statutory position created under section 207 of the Patents Act [1990].  Consistent with her role as an administrator, her power is clearly delineated by section 207(2) to that specifically conferred by legislation:
207  Commissioner of Patents
             (1)  There is to be a Commissioner of Patents.
(2)  The Commissioner has such powers and functions as are conferred on him or her under this Act or any other Act

10.	This means that the Commissioner does not have the broad powers of a court.  For example, unlike a court, she has no power to enforce costs (these are only recoverable as a debt).  The Commissioner also only has the power to award costs according to schedule 8 of the Patents Regulations 1990 unless the parties have been given an opportunity to be heard under regulation 22.8.  Because of these limitations, the Commissioner normally does not depart from an award of scheduled costs unless the circumstances clearly warrant it.    

DECISION

11.	The Commissioner’s power to require a party provide security of costs is limited by  section 219 of the Patents Act 1990 which states: 
219  Security for costs
If a person who neither resides nor carries on business in Australia:
                     (a)  gives notice of opposition under this Act; or
                     (b)  appeals to the Federal Court;
the Commissioner or the Federal Court, as the case may be, may require the person to give security for the costs of the proceeding or appeal and, where such security is not given to the satisfaction of the Commissioner or the Federal Court, as the case may be, may dismiss the proceeding or appeal.

12.	The patent applicant is not the opponent and hence the Commissioner has no statutory power to require a security as requested by the opponent.  

13.	The opponent argued that section 219 of the Patents Act [1990] only applies where the litigant is a natural person.  However this construction is inconsistent with section 22 of the Acts Interpretation Act (1901) which clearly indicates that “person” means both a body corporate body as well as a natural person:
22  Meaning of certain words
             (1)  In any Act, unless the contrary intention appears:
                     (a)  expressions used to denote persons generally (such as “person”, “party”, “someone”, “anyone”, “no‑one”, “one”, “another” and “whoever”), include a body politic or corporate as well as an individual;
                    (aa)  individual means a natural person;

14.	As a consequence, I do not agree that section 219 of the Patents Act is modified by section 1335(1) of the Corporation Act 2001 as argued by the opponent.  

15.	I do, however, accept that section 207(2) of the Patents Act 1990 does allows for the Commissioner of Patents to be given powers outside the Patents Act.  However, such powers would need to be specifically conferred by legislation because of the Executive nature of the Commissioner’s powers. 

16.	Section 1335(1) of the Corporation Act [2001] referred to by the opponent reads as follows:  
1335  Costs
             (1)  Where a corporation is plaintiff in any action or other legal proceeding, the court (my emphasis) having jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the corporation will be unable to pay the costs of the defendant if successful in his, her or its defence, require sufficient security to be given for those costs and stay all proceedings until the security is given.
          (1A)  Subsection (1) does not apply to a corporation that is an Aboriginal and Torres Strait Islander corporation.
Note:          Similar provision is made in relation to Aboriginal and Torres Strait Islander corporations under section 581‑20 of the Corporations (Aboriginal and Torres Strait Islander) Act 2006.
             (2)  The costs of any proceeding before a court under this Act are to be borne by such party to the proceeding as the court, in its discretion, directs.

17.	The provision is clearly only referring to a body with judicial power (a court) and as noted above, the Commissioner of Patents does not have this type of power.  This provision does not specifically refer to the Commissioner of Patents and therefore does not enliven the executive power of that position.  My view is that section 1335 of the Corporation Act [2001] does not apply in the current case and there is therefore no statutory power for the Commissioner to require the applicant to provide a security of costs.  

CONCLUSION

18.	The only power the Commissioner has to order a security of costs is under Section 219 of the Patents Act.  However this provision only allows the Commissioner to order a security of costs from an opponent.  As a consequence, there is no power for me to require a security of costs from the applicant as per the opponent’s request.  I therefore formally refuse the opponent’s request.

COSTS

19.	In matters before the Commissioner, costs generally follow the event. Because of the effect of regulation 22.8, the Commissioner’s long standing practice is only to award costs according to schedule 8 of the Patents Regulations 1990.  In this case, there were no little or no costs that would have been incurred under that schedule and hence it is not necessary to award costs in this matter.    

Karen Ayers
Delegate of the Commissioner of Patents

9 February 2010

Patent attorneys for the applicant  :  Davies Collison Cave, Melbourne
Patent attorneys for the opponent   :  David McCabe trading as Ying Fa Australia Pty Ltd, Young

Annex A

Schedule 8        Costs, expenses and allowances
(subregulation 20.30 (2) and regulation 22.8)
Part 1          Costs 
 
Column 1 	Column 2 	Column 3 	
Item 	Matter 	Amount 	
1 	Notice of opposition 	$200 	
2 	Statement of grounds and particulars 	$750 	
3 	Receiving and perusing statement of grounds and particulars 	$500 	
4 	Evidence in support 	$1 500 	
5 	Receiving and perusing notice of opposition 	$200 	
6 	Receiving and perusing evidence in support 	$750 	
7 	Evidence in answer 	$1 500 	
8 	Receiving and perusing evidence in answer 	$750 	
9 	Evidence in reply 	$750 	
10 	Receiving and perusing evidence in reply 	$350 	
11 	Preparation of case for hearing 	$1 000 	
12 	Attendance at hearing by registered patent attorney or solicitor without counsel 	$260 an hour, but not more than $1 170 a day 	
13 	Attendance at hearing by registered patent attorney or solicitor instructing counsel 	$200 an hour, but not more than $900 a day 	
14 	Counsel fees for attendance at a hearing	$300 an hour, but not more than $1 350 a day	
Part 2          Expenses and allowances 
Division 1     Expenses 
           1   A person who has paid a fee prescribed in these Regulations in relation to proceedings before the Commissioner or the Disciplinary Tribunal may be paid the amount of the fee. 
           2   A person attending proceedings before the Commissioner or the Disciplinary Tribunal must be paid: 
                (a)    a reasonable amount for allowances for transport between the usual place of residence of the person and the place that he or she attends for that purpose; and 
               (b)    if the person is required to be absent overnight from his or her usual place of residence — a reasonable amount for allowances up to a daily maximum of $700 for meals and accommodation. 
Division 2     Allowances 
           3   A person who, because of his or her professional, scientific or other special skill or knowledge, is summoned to appear before the Commissioner or the Disciplinary Tribunal as a witness must be paid: 
                (a)    if the person is remunerated in his or her occupation by wages, salary or fees — an amount equal to the amount of wages, salary or fees not paid to the person because of his or her attendance for that purpose; or 
               (b)    in any other case — an amount of not less than $140, or more than $700, for each day on which he or she so attends. 
           4   A person summoned to appear before the Commissioner or the Disciplinary Tribunal as a witness, other than a witness referred to in clause 3, must be paid: 
                (a)    if the person is remunerated in his or her occupation by wages, salary or fees — an amount equal to the amount of wages, salary or fees not paid to the person because of his or her attendance for that purpose; or 
               (b)    in any other case — an amount of not less than $80, or more than $130, for each day on which he or she so attends.