Lessons from a Patent Ownership Dispute.


A recent decision from the Australian Patent Office in Olvey & Sketo v Danko & Gabrys [2019] APO 42 dealing with patent ownership underscores the importance of keeping robust, detailed, and contemporaneous records relating to conception and development of an invention that will later be claimed in a patent application. This could help to avoid patent ownership disputes between applicants.

Section 32 of the Patents Act 1990 (as amended under the Raising the Bar Act) provides an avenue for the Commissioner of Patents to make a determination regarding a dispute between any two or more joint patent applicants as to whether the application should proceed in the name of one or more of the patent applicants alone.

In the present case, Australian Application Number 2016259383 for the invention titled “Corrugated Pallet” listed Sean Gumbert, Joseph Danko, Douglas Olvey, James Sketo and Christopher Gabrys as Applicants. Mr Sketo and Mr Olvey are listed as inventors. A request under s32 was filed by Sketo and Olvey for the Commissioner to make a declaration and remove Gumbert, Danko, and Gabrys as applicants. Mr Gumbert did not take part in the present matter.

Under Australian law, a patent may only be granted to:

  1. an inventor; or
  2. a person who would, on the grant of a patent, be entitled to have the patent assigned to them; or
  3. derives titled from (1) or (2); or
  4. is a legal representative of a deceased person mentioned in (1), (2), or (3).

Regarding determination of entitlement, Hearing Officer Tan applied the approach taken by the Full Bench of the FCA in University of Western Australia v Gray [2009] FCAFC 116, namely:

  • identify the “inventive concept” of the invention as defined by the claims;
  • determine inventorship including the person responsible for the inventive concept and the time of conception as distinct from its verification and reduction into practice; and
  • determine how any contractual or fiduciary relationships give rise to proprietary rights in the invention

The invention broadly relates to pallets for shipping goods and in particular a corrugated paperboard pallet that may have the benefit of high strength and stiffness, and may be produced using a minimal amount of paperboard material, thus reducing material costs. The corrugated paperboard pallets are produced from two flat blanks which comprise a pallet top and a pallet bottom.

Based on the specification (as opposed to the claims of the pending application), the Hearing Officer concluded that the inventive concept relates to a corrugated pallet having only two ribs and is responsible for increased strength and increased useability, in combination with a locking arrangement.

In a s32 patent ownership determination, the requestor bears the burden of proof to establish that a determination as to the nature of the applicants should be made. In this case, Olvey and Sketo needed to establish inventorship in that they are the sole inventors and the application should proceed in their name only. Unfortunately, the evidence did not establish to the satisfaction of Hearings Officer that Olvey and Sketo were the sole inventors. The evidence was problematic for a number of reasons.

Both sides filed opinions from their respective U.S. legal counsel, which identified and summarised the issues under dispute. The Hearings Officer did comment that although one of the lawyers had over 45 years of practising patent law, this was predominately in the United States. The U.S. legal counsel opinions were not considered helpful to the central issue of what each applicant contributed to the inventive concept.

It was Dr Gabrys submission that conception of the inventive concept was the result of two hours of group meeting. Dr Gabrys provided two meeting invitations and agenda for each meeting that very broadly set out what was to be discussed in the meeting. No information or further detail was provided as to the nature of the discussions. Pointedly, at paragraph [22] the Hearings Officer stated that “it would have been helpful if there were documents showing what aspects of the corrugated pallet design were being looked at, and who contributed. Moreover, in my view, it is not apparent whether the evidence establishes what pallet design was discussed at these meetings.”

Each side relied upon a transcript of videotaped depositions by Gabrys and Danko. The depositions relate to what each individual contributed to the inventive concept from the perspective of Gabrys or Danko. Once again, the evidence was not strong for either side, at least in part due to the frequent use of “I believe” and other uncertainty surrounding which individual developed an idea. This type of equivocation and an absence of a clear articulation as what exactly each individual contributed to the inventive concept and any type of documentation or corroborating evidence left the Hearing Officer unable to conclude who exactly contributed what to the inventive concept.

Based on the evidence before him, the Hearings Officer could only conclude that Mr Gabrys and Mr Danko had some involvement in the development of the inventive concept, as did Olvey and Sketo. As such, the s32 request was denied and the status quo was retained.

This decision is a prudent reminder that a blanket statement from a party that they made a contribution to conception of the invention will likely not persuade a decision maker in a patent ownership dispute without evidence of the nature of the contribution. It is crucial that that detailed and accurate records are made and retained during those exciting days of generating an idea, particularly when multiple parties are potentially involved with conception of the invention.