Wednesday, 23 December 2015

Intransigent Inventors and Switching Sides

I wrote a while back about a case involving inventors refusing to sign forms for a US application. In that case, the application had been assigned to another company after the original applicant went bust. The inventors, who were directors of the original applicant company, unsurprisingly became uncooperative once the new applicant took over, and refused to sign declaration and assignment documents for a subsequent US application. The case was resolved by a UK IPO hearing officer deciding in favour of the new applicant because the original intention was to have the application to proceed in the name of the company and not the inventors. It undoubtedly helped the new applicant's case, however, that neither inventor filed anything in their defence, which resulted in the claimant's case being considered to be supported (according to Rule 77(9)).

As I mentioned at the time, cases relating to entitlement under section 12 (relating to foreign and international patents and applications) do not come up very often. I was therefore interested to see that another one was decided last month. This was the case of University of Warwick v Dr Geoffrey Diamond, published as BL O/518/15. The case concerned US application 12/306,505, which happens to have been recently allowed by the USPTO, although the UK proceedings were initiated over two years ago while the application was undergoing examination.

The issue related, as before, to an inventor refusing to sign declaration and assignment documents for the US application. The application identified three inventors, two of whom were cooperative. Dr Diamond, however, refused to sign. Unlike in the earlier case, he contested the claim, and argued that the University had no right to his contribution to the invention. Instead, he argued that his contribution belonged to a company, G-Tronix, which had been spun out from the University and at one point had all of the inventors listed as directors but by the time the proceedings were issued had only Dr Diamond as director (and has now been dissolved).

By the time the hearing took place in June this year, it appears that Dr Diamond had caused the University a great deal of difficulty (and, presumably, expense), having caused the hearing officer at the IPO to issue two preliminary decisions (BL O/208/14 and BL O/225/15), one of which Dr Diamond appealed to the High Court (and had struck out). The argument was largely about whether Dr Diamond was, at the time the invention was made, employed by the University in a capacity where section 39 would indicate that the invention belonged to the University. Dr Diamond argued that he was not, although his arguments were somewhat confused and contradictory. He initially argued that he was employed by G-Tronix but, when cross-examined, said that this was a "slip of the pen". He was also quite vague about how early prototypes of the invention were developed, even though he claimed that they were developed in his workshop at home, and did not appear to have any knowledge of how some of the figures in the patent application were prepared, even though they formed a key aspect of the invention. The hearing officer found Dr Diamond to be unconvincing and not a credible or reliable witness, although did not go so far as to find him dishonest.

You might think that this would fatally damage Dr Diamond's case, but you would be wrong. Since the proceedings were initiated by the University, it was down to them to establish that they were entitled to the invention, and not for Dr Diamond to prove that he was instead. Unfortunately for the University, they failed to do this to the hearing officer's satisfaction. Even though the hearing officer was fairly sure that the invention was made before the inventors became directors of G-Tronix, and Dr Diamond was working with the other inventors at the time, the evidence of whether the invention was made in the course of Dr Diamond's normal duties was not particularly strong on either side and the claimant had failed to show that the invention belonged to them. This left the US application having to proceed in joint names, and presumably with neither side being particularly happy about the outcome.

The moral of the tale in my previous story about section 12 proceedings was that it was sometimes necessary to use a sledgehammer to crack a nut. This time though, to extend the metaphor a bit further, I would say that if you need to use a sledgehammer you should make pretty sure that you have a good one as sometime the nut can be more difficult to crack than you first thought.

As a postscript, while looking through the prosecution files for the family of applications relating to the one in question, I noticed something odd. The US application forms part of a family that includes international application PCT/GB07/050368, which was published as WO 2008/001141. This entered the European regional phase in January 2009 as European application number 07733789.7. In the decision the hearing officer mentioned a few times the patent attorney who was responsible for the PCT application, who Dr Diamond had met and apparently liaised closely with for preparation of the application. This same patent attorney was also responsible for making a request for the application to enter the European regional phase, as evidenced by his electronic signature on the request form. The next year, however, in July 2010 the EP register shows a change of representation, with another representative from the same association of patent attorneys becoming responsible. This is all fairly standard, as representatives change fairly often and responsibilities for applications can change. What happened afterwards, however, was not normal. Only three months later, in October 2010, third party observations were filed, attacking the validity of the application. These were prepared and filed by the same attorney who was originally responsible for the application, but was apparently now representing someone else, having left his previous employ and set up by himself. This other party was identified only as "a well established manufacturer [who] is monitoring with interest the prosecution of this European patent application". Further observations were filed in March 2011 by the same attorney. None of this prevented the application from going on to be granted, which it did in 2012, although the examiner did use the prior art cited by the third party in raising an objection of lack of inventive step in a summons to oral proceedings.

Switching sides is something that would obviously raise alarm bells for any patent attorney. If you were involved with preparing, filing and prosecuting a patent application, it would be a clear conflict of interest to then work for another party in trying to knock down the same application. This is made quite clear in the IPReg Code of Conduct, Rule 7 of which states:
"A regulated person must not act where his interests conflict with those of a client or of a former client, or where he knows or has reasonable grounds for suspecting that the interests of any partner or regulated person or staff of his firm, conflict with those of a client or of a former client.
Provided in all the circumstances it is reasonable to do so, a regulated person may act for two or more clients, or for a client as against a former client, in relation to the same or a related matter in a situation of conflict, or possible conflict but only if all of the parties have given their informed consent in writing."
What I wonder is whether the University gave permission for the attorney to switch sides and start attacking the patent application that he originally prepared and filed. I would be very surprised if they did, since I cannot see how it could possibly be in their interests to do so, but this seems to me to be the only way that this would avoid a clear breach of the IPReg code.


  1. Very weird scenario in the postscript. Perhaps made even muddier by [0127] of the opinion relating to the Japanese equivalent case (and predating the 3rd party obs)...
    "Further to the emails we have recently exchanged on this patent. The patent is the invention of one of our spin out companies and they have requested that the files be sent to [attorney] (who originally wrote it and is intimately cognisant of the subtleties of this technology) ... The University agrees to this ..."

    But that would suggest later 3rd party obs against a patent application of a related family member where the attorney has the file...very confusing. The hearing officer doesn't give much weight to this in terms of entitlement to the US application (probably rightfully so), but it's certainly an interesting piece of evidence.

  2. I don't know if you saw but in BL O/208/14 at para. 22, there is this quote from an email from HGF to Dr Diamond:

    Dr Diamond has also submitted another email entitled “RE: Request to Transfer of Files” that he received from Mr Christopher Vaughan, a Partner at HGF. The email dated 16th April 2010, which is again, addressed “Dear Geoff” thanks Dr Diamond “for your payment of XXX (figure removed) which has now reached our bank account”. It goes on to note that “As far as HGF is concerned, all of the G-Tronix/Inspection Technologies matters were transferred to Yeadon IP last week. This was in accordance with your instruction, and you will recall that I acted swiftly and without complaint”.

    So HGF are saying that not only the JP but all the other matters were transferred to Yeadon IP. Why then did the representative not change? Could there have been a change of heart and HGF and the University refused to allow a change of representative on the EP application, and so Diamond then decided that if they couldn't have it, they'd ruin the University's day?

    1. I saw that too, but also couldn't make sense of it. It looks like it got a bit murky who the proper instructing party was, and there isn't enough on public record to figure out what actually happened.

    2. I'm guessing cock-up before conspiracy.

      This is why I don't do university work.

    3. You're probably right. I do some university work and can well understand.

  3. In the case referred to in the decision, Jacob states:

    "So if in the course of his work an employee comes up with an
    idea which the common law would require him to hold as confidential to his employer, that will be covered by s.39 . Any other conclusion leads to the absurd result that an invention would belong to the employee and yet he would owe a duty of confidence to his employer. Parliament cannot have intended such a stalemate."

    Section 43(2) states:
    "Subsection (2) above shall not be construed as derogating from any duty of confidentiality owed to his employer by an employee by virtue of any rule of law or otherwise."

    I don't see how 42(3) passes ownership onto the employer. There is, contrary to Jacob's position, simply a stalemate. The employee own his invention, but cannot breach the employers confidence.

    Another matter I query is when the rights in a US patent clearly belong to the employer (made in course of employment, employee employed in UK) why are assignments from employees to employer for US patents required? If a third party is the applicant for the US patent by virtue of an agreement with the employer, why are assignments made direct from employee to applicant, and not via the employer?