Author: Peter Caporn
In a recent patent opposition before a Delegate of the Commissioner of Patents the Delegate considered the issue of whether an improved drill bit was different enough to avoid having been assigned with an earlier drill bit. The case of Orthopedic Innovation Pty Ltd v CPL Holdings Pty Ltd [2015] APO 71 can be found in full here.
It is relative common practise to include a clause in patent assignments and licenses that seeks to assign improvements and modifications of the technology at issue. However, there is often doubt as to exactly how far this often hopeful catch all clause extends. This case sheds some light on the issues that will be considered.
The circumstances of the case relate to a dental drill, the rights to which were assigned to a company shortly prior to that company’s incorporation. There is nothing wrong with this in itself although there is meant to then be some ratification, implied or explicit, of the assignment or agreement post incorporation. Helpfully the Delegate considered this question and determined that the company’s actions in seeking recordal of the assignment with the Patent Office was clear indication of ratification. To further complicate the circumstances there was also a deed of release executed with the inventor that the patent applicants argued overrode any ongoing impact of the original assignment of the original technology (the assignment that referred to the assignment of improvements). However, the Delegate also rejected this argument on the basis that the release related to future circumstances, not to matters arising from the original arrangements between the parties.
So, the issues boiled down to the question of whether the later drill bit was an improvement on the original. The specific clause in the assignment read as follows:
“Technology means the drill bit design and method of manufacture of drill bits for use in a variety of applications including for use as a surgical cutting tool which is the subject of Patent Application Number PCT/AU03/01003 and includes all Improvements thereof.”
Improvements were then defined as:
“Improvements means in relation to any given technology, any adaptations, derivations, enhancements, improvements or developments based on, or derived from, such technology.”
The Delegate first determined from the above clauses that improvements were limited to improvements of the technology defined in Patent Application PCT/AU03/01003. The Delegate then undertook a careful consideration of the specific technology in the PCT application and comparison with the new drill bit. It was determined that the new drill bit shared features with that described in the PCT application that went beyond generic drill bit features. That is, the new drill bit incorporated the inventive aspects of the earlier drill bit and, in short, was determined to be an improvement of that technology. Please refer to the decision itself for full details of the Delegate’s reasoning on these points.
The take away points include the impact of including terms in assignments and licenses relating to ‘modifications’. They can have a meaningful impact and shouldn’t simply be considered as ‘boilerplate’ clauses. It is important to consider how these clauses are worded. Further, no hasty assumptions should be made as to the scope of assignment deeds nor the impact of Deeds of release, particularly where there is a basic but important technology that forms the basis for on-going development. These matters have an impact far beyond the field of dental drills (excuse the pun, please).