Application for a licence to exploit a patented invention refused
Garden City Planters Pty Ltd v Vivre Veritas Pty Ltd  APO 113
Where a person exploits (or takes definite steps to exploit) an invention that is the subject of a lapsed/ceased patent, and that patent is subsequently restored, the Commissioner of Patents may grant the person a licence to exploit the invention. This decision relates to an opposition filed by Garden City Planters Pty Ltd (the Opponent – “Garden City”) contesting an application filed by Vivre Veritas Pty Ltd (the Applicant – “Vivre”) requesting that the Commissioner grant a licence for it to exploit an invention that is the subject of a patent in the name of Garden City.
Background to the case
Australian Patent No. 769039 (“the Patent”) relates to label retention improvements on a container such as a plastic plant tray, or a so-called “punnet”. The patent ceased for non-payment of a renewal fee due in February 2008. On 1 September, 2009, Garden City applied for an extension of time within which to pay the overdue renewal fee. The extension application was advertised in the Official Journal on 26 November, 2009, and was granted unopposed on 12 January, 2010. The Patent was subsequently restored. On 25 June, 2010, Vivre applied to the Patent Office for a licence to exploit the subject matter of the Patent. Garden City subsequently filed a Notice of Opposition to the licence application on 26 July, 2010, followed by relevant supporting submissions.
The licence application
Vivre asserted that it first became aware of the Patent in January 2008, as a result of an enquiry from a potential client, and alleged that a conscious effort had been made to ensure that a plant tray it intended to produce and supply to the client would not fall within the scope of the claims of the Patent. There was no suggestion by Vivre that the status of the Patent was investigated at that time, although had this been done, the publicly available information would have indicated that the Patent was still in force.
Subsequent events led Vivre’s director to check the status of the Patent on IP Australia’s database which revealed that the Patent had ceased. In February 2009 discussions were conducted with clients regarding the supply of plant trays falling within the scope of the ceased Patent. These led to a number of purchase orders and by the end of November 2009 sample plant trays had been produced and were being tested by a number of clients.
In March, 2010, after discussions with a client to which the plant trays were to be supplied, Vivre rechecked the status of the Patent and, learning that it had been restored, sought advice from a Patent Attorney. This led to the application for a licence.
In support of their opposition to the application for the licence, Garden City submitted numerous statutory declarations and a legal letter attesting that:
- It (and its predecessors in business) had and continued to produce and market significant quantities of various forms of plant containers falling within the scope of the Patent;
- It had recently become aware that Vivre allegedly sold, or offered for sale or dealt with, infringing products before the Patent had ceased; and
- Its legal representatives had sent a letter to Vivre raising allegations of infringement of the Patent (by or with the authorisation of Vivre) prior to its cessation.
By way of answer, Vivre contended that during the time at which the Patent had ceased a number of nurseries in Australia purchased “large numbers” of plant trays falling within the scope of the claims of the Patent from Vivre, and also that Vivre paid for equipment to produce the plant trays, and by way of evidence, tendered a number of invoices, receipts and purchase orders.
In reaching a decision, the Delegate gave consideration to relevant statutory framework of the Patents Act 1990, namely section 223 under which a ceased patent may be restored, and subsection 223(9) that provides a mechanism for a person to seek protection or compensation where they exploited a patent during a time in which the patent was ceased.
The Delegate’s attention turned primarily to consideration of the facts surrounding whether or not Vivre is a person who warranted such protection or compensation under the circumstances, and in particular, pursuant to subsection 223(9), if Vivre should be granted a licence under to exploit the invention that is the subject of the Patent.
The Delegate made reference to Law v Razer Industries Pty Limited  FCA 1058 (see our earlier case review) in which the grant of a licence under Regulation 22.21 was considered by Justice Bennett. In that case her Honour noted at :
The Delegate also considered where the legal burden of proof lay under the circumstances. While noting that it is generally incumbent upon an opponent to establish their case, the Delegate agreed with the position put forward by Garden City that in the current proceedings the Applicant carried the legal burden of proving that it exploited the patent because of its ceased status.