20 October, 2010
Spruson

Federal Court considers “Commissioner’s licence” provisions of the Patents Act

Federal Court considers “Commissioner’s licence” provisions of the Patents Act

When a patent ceases but is later restored as a result of the patentee obtaining an extension of time in which to do some act in relation to the patent, the Commissioner of Patents has the power to grant a licence to a person who, while the patent had ceased, exploited the patent or took definite steps to exploit it. Such a licence can only be granted if the Commissioner is reasonably satisfied that it should be granted, and only on the request of the person concerned.

The Federal Court has recently had reason to consider the circumstances in which a person may be eligible to be granted such a licence. The case, Law v Razer Industries Pty Limited [2010] FCA 1058, concerned a patent that had ceased for the period from 27 September 2007 to 26 October 2009 because the patentee, Mr Law, had not paid two renewal fees before their relevant due dates. The patent was restored after a successful application by Mr Law for extensions of time to pay the missed renewal fees. About 1 September 2008, Razer Industries Pty Limited (“Razer”) began selling products within the scope of the claims of the patent and continued to do so after the patent was restored. Some time after the patent’s restoration Razer applied to the Commissioner for a licence to continue exploitation of the patent, and Mr Law commenced infringement proceedings in the Federal Court. Razer then filed a notice of motion in the Federal Court to stay the infringement proceedings pending the final determination by the Commissioner of Razer’s licence application.

Although the Federal Court does not have jurisdiction to determine an application for a Commissioner’s licence, nevertheless in considering Razer’s notice of motion in the Federal Court, Bennett J had reason to consider when a person may be eligible for a Commissioner’s licence. In particular, her Honour observed that the class of persons who may obtain a Commissioner’s licence does not include all persons who took steps to exploit the invention while the patent had ceased, but only those persons encompassed within the relevant provision the Patents Act 1990 (Cth). Her Honour considered that under s 223(9) of the Act the Commissioner’s licence is only available to a person who becomes aware that the patent had ceased and takes actions based upon that status of the patent: there must be a link between the fact that the patent has ceased and reliance upon that fact by the person seeking to obtain the protection.

In the present case, Razer had not been aware of the existence of the relevant patent or of its ceased status at the time it commenced selling products within the scope of the claims of the patent. Accordingly, Bennett J considered that, on the facts agreed between the parties in the proceedings before her, Razer was not a person who qualified as eligible for a Commissioner’s licence.

This case confirms that, although the provisions allowing for the grant of a Commissioner’s licence place certain limitations of the rights of a patentee, those limitations are strictly confined. The case makes it clear that persons who commenced infringing actions at a time when a patent was ceased but were unaware of the patent at the time of the infringement cannot obtain protection through a Commissioner’s licence if the patent is later restored. A fortiori, it appears the same must hold if the infringer was aware of the existence of the patent at the relevant time, but was not aware that it had ceased.


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