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Wednesday, 7 August 1946

Mr MENZIES (Kooyong) (Leader of the Opposition) . - The purpose of this bill is to amend the Patents Act in various respects. The bill itself is, of necessity, very technical, although some of the matters dealt with in it are of some general importance. However, the bill possesses no party character at all. I want to make comments on about four points that arise in the bill, and 1 particularly urge the Minister to take those points into consideration and and not proceed with the bill any further at this stage. After all, there is no very great hurry about any' of its provisions, and it would be unfortunate if changes in the patents law were made without full consideration of the various" points of view. I illustrate that by turning at once to the points I intend to emphasize. Clause 2 deals with the publication of complete specification. . There is considerable delay, which I recognize as being owing to staff difficulties in the Patent Office, in examining applications, and, as the result of that, a complete specification may be lodged and a very substantial time elapse before the matter comes to finality. The delay, as the Minister pointed out, is ' serious, because it abridges the inventor's right in his invention, by abridging the life of his patent, which operates from the date of application. But I notice that the words in the proposed new provision are these -

After a complete specification has been lodged, the Commissioner shall publish in the Australian Official Journal of Patents, Trademarks and Designs a notification that the complete specification is open to public inspection and, thereupon, the complete specification and provisional specification -(if any) shall be open to public inspection.

In his second-reading speech, the Minister' indicated that the design of' that provision was " to provide for the publication of the complete specification forthwith after lodgment at the Patent

Office". So I take it that the intention is that, forthwith, after the complete specification has been lodged, there is to be publication in the manner described in the remaining words of the proposed new section. On that, I point out to the House that the Official Journal is usually despatched, or it was when I last knew of it, each week to the patent offices of all principal countries. Therefore, if the proposal be carried out, the complete specification of an invention will be published in those countriesshortly after the filing of the complete specification in Australia, and that will seriously affect the validity of subsequent overseas patent applications of the inventor. Let me make that quite clear. The inventor puts in a complete specification in Australia. He, perhaps, intends to secure protection in other countries. Time must elapse between his filing his complete specification in Australia and his making application abroad, unless he has the great fortune to bring hisinvention to a final satisfactory state very early in the piece. If, in fact,the inventor, having filed the complete specification in Australia, proceeds by the ordinary course of the post to take steps to make applications in other countries, his applications may be confronted when they arrive by the fact that his invention has been published in those countries in anticipation of the claims that he is making. This advance publication of his invention in another country may turn out to invalidate his application when it is made in that country. I suggest very earnestly for the consideration of the "Minister that the real remedy is to insert at the beginning of the clause the words " not less than three months ". The proposed new section would then read -

Not less than three months after a complete specification has been lodged the Commissioner shall publish ...

Then the inventor would have three monthsof grace in which to forward his applications inother countries..

The next point arises on clause 7, which deals with what the lawyers call " a threats action ", in the patent law, the kind of action provided under the principal act when threats are made of legal proceedings on behalf of some in- . vention that turns out to be invalid.

There is a provision in section91a ofthe principal act dealing with the matter.It is now proposed in this bill to substitute a new provision. Clause 7 provides-

Section ninety-one a of the Principal Act it repealed and the following section inserted in its stead : - "91a. -(1.) Where any person, by means of circulars, advertisements or otherwise threatens any person with any action or proceedings for infringement of a patent, or other like proceedings, then whether the person making the threats is or is not entitled to or interested in a patent, or is or is not interested in an application for a patent, any person aggrieved thereby may bring an action against him and may obtain a declaration to the effect that the threats are unjustifiable and an injunction against the continuance of the threats, and may recover such damages (if any) as he has sustained thereby, unless the person making the threats satisfies the court that the acts in respect of which the proceedings were threatened constitute or if done would constitute -

(a)   an infringement of a patent in respect of a claim in the specification which is not shown by the plaintiff to be invalid; or

(b)   an infringement of rights arising from the publication of the complete specification in respect of a claim therein which is not shown to be one which would be invalid if a patent had been granted in respect thereof.

The person who writes the actual threat will, perhaps in nine cases out of ten be a solicitor or a patent attorney. The proposed new section goes on to deal with the cases of a solicitor or a patent attorney by saying - (2.) Nothing in this section shall render any solicitor or patent attorney, in respect of any act done by him in his professional capacity on behalf, and with the written or telegraphed authority, of his client, liable to any action or proceeding under this section, provided that the solicitor or patent attorney produces the authority for inspection by the person threatened or satisfies the court that the authority was received by him but has been inadvertently lost or destroyed. '

So the solicitor or the patent attorney will be liable to a threats action, unless he can produce or explain the nonproduction, unless he can prove - let me put it that way - written or telegraphed authority from his client to write the letter containing the threat. That is a very far-reaching restriction on the ordinary relation between solicitor and client. It is a novelty that a client who consults a solicitor and instructs him to take charge of a proceeding for him should have to give any written authority to the solicitor to issue a letter, which is a perfectly normal step in proceedings of that kind. In the same way, it would be a remarkable evasion of the ordinary position of a solicitor or patent attorney if, being threatened in this way, he was able to prove that his client had told him to write the letter but was not able to show he had got authority from his client in writing. That seems to me to be an entirely unnecessary invasion..

Mr Holloway - I thought lawyers insisted on having everything in writing.

Mr MENZIES - No. The Minister will perhaps be surprised to be told that 95 times of 100 a solicitor who acts for a client has acted for him many times, and. there is no question of getting written authority. They act on the basis of mutual confidence. But this provision will make it necessary that the solicitor or patent attorney shall protect himself in relation to correspondence of this kind by securing the written authority of his client.

The third point I want to mention is contained in sub-section 3 of proposed new section91a. It says -

The High Court shall have jurisdiction to hear and determine any action or proceeding under this section.

This, I venture to say with great respect to the draftsman, is a complete oversight. The threats action usually produces a counter claim for infringement, as the honorablemember for Warringah (Mr. Spender) knows. The man who has been threatened with proceedings says, " Very well, I shall tackle you. You are the defendant in my action for damages for your threats ". Then the man who made the threat replies," You are infringing my patent and I shall sue you for infringement ". Consequently, in the experience of patent lawyers, it almost inevitably happens that an action for threats will produce a counter-claim for infringement. The threats action may, under this proposed new sub-section, be brought in the High Court, but infringement proceedings can be brought only in the Supreme Court. There was, at one stage, a proposed patents bill in which it was intended to give jurisdiction to the High Court in infringement proceedings ; but until jurisdiction is given to the High Court in infringement proceedings, it is absurd to say that the man who is claiming on the " threats " may go into the High Court, and the other person who wants to take the normal counter-action must go into a Supreme Court. That is a serious anomaly, and until the High Court is given infringement jurisdiction, the proposed sub-section should not be agreed to.

The last matter to which I desire to refer arises in clause 8, which provides for the insertion in the principal act of the following new section: - 112b. - (1.) A person shall not falsely represent that he or any other person is the patentee of an invention. (2.) A person shall not falsely represent that any article sold by him is patented in Australia or is the subject of an application for a patent in Australia.

That is. a very wise provision, andI entirely agree with it, but I' am at a loss to understand why proposed new subsection 3 has been inserted. Proposed new sub-section 2 is in perfectly general terms, and in quite effective terms, but proposed new sub-section 3 states - (3.) For the purposes of this section -

(a)   a person shall be deemed to represent that an article is patented in Australia if there are stamped, engraved or impressed on, or otherwise applied to, the article the word " patent " or " patented the words " provisional patent ", or any other word or words expressing or implying that a patent for the articlehas been obtained in Aus tralia; and

(b)   a person shall be deemed to represent that an article is the subject of an application for a patent in Australia if there are stamped, engraved or impressed on, or otherwise applied to, the article the words " patent applied for ". " patent pending " or any other word or words implying that an application for a patent for the article has been made in Australia.

As honorable members know, many patented articles made abroad, for example inthe United Kingdom or the United Statesof America, have stamped upon them the word " patented ", or the words "patent applied for" or the number of the patent given in the United States of America Patent Office or the Patent Office of Great Britain. If that article comes into Australia, as it very frequently will for sale, the label, stamp or mark cannot be removed; and yet there may be a serious danger of the seller of the article being prosecuted for- a breach of this proposed new sub-section, because a person shall be deemed to represent that an article is patented in Australia if there are stamped, engraved or impressed on it the words " patent " or "patented". In my view, that matter deserves very careful thought. I consider that proposed new sub-section 3 should he left out. Surely the language of proposed new sub-section 2 is perfectly adequate. It is a very simple matter of fact to decide whether a man is putting * on the goods some mark which suggests that they are patented in Australia, ff, in the view of the tribunal, that is the effect of the label, then he is guilty of a breach of this proposed new section. But if the label states quite plainly that the article is patented in some other country, then in the interests of ordinary international trade, no barrier should be put in the way of goods so marked being sold.,

To summarize my speech, I invite the Minister to consider the points which I have raised about the publication of the complete specification, about the provision for another authority from client to solicitor or patent attorney in a threats action, about the anomaly created by subsection 3 of proposed new section 91a, and about articles which come into Australia marked with some reference to a patent abroad.

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