D11.3 s.137(2) - Summary of the Principles of Law

Date Published

D11.3.1 Beneficial Nature of Section 137

Section 137 of the Designs Act 2003 (Cth) is beneficial in nature and should be applied beneficially; (re Sanyo Electric Co Ltd and the Commissioner of Patents (1996) 36 IPR 470 at 480, Chalk v Commissioner for Superannuation (1994) 50 FCR 150, at 156). Section 137 is a general remedial section and has general application, applicable unless there is some clear indication to the contrary. (See Scaniainventor v Commissioner of Patents (1981) 36 ALR 101 and Danby Pty Ltd v Commissioner of Patents and Another (1988) 12 IPR 151).

However, there needs to be a relevant time period to extend. In particular, s 137 cannot normally be used to ‘extend’ the time for filing a design application where no earlier priority rights exist.

In Norman Stibbard v The Commissioner of Patents (1986) 7 IPR 337 the AAT upheld the delegate's decision to refuse an extension of time to lodge the patent application:

"The Tribunal considers that, as expressed by Stephen J, as he then was, s160(2) does not contemplate what amounts effectively to antedating the lodgment of a complete specification so as to effectively defeat the interests of other inventors who have lodged their specifications more promptly. If it were otherwise, the lonely inventor working away unaware of the inventive steps of others would suffer a rude shock if he promptly lodged his application and specification only to be defeated by a less prompt inventor applying under section 160(2) for an indulgence."

D11.3.2 Burden of Proof

While the applicant has the burden of placing before the Registrar the circumstances which it claims will justify the grant of an extension of time, that does not amount to a burden of proof and it is not appropriate that it should be so described; [Re Sanyo Electric Co Ltd and the Commissioner of Patents (1996) 36 IPR 470 at 479]. What is required is material sufficient to justify the administrative exercise of the relevant power.

D11.3.3 Nature of an Error or Omission

For an extension to be granted, there must have been 'an error or omission'. Although there is no clear or complete meaning for the words 'error or omission' a distinction should be drawn between:

  • errors or omissions affecting the carrying out of the parties' intentions, and
  • the consequences of deliberate decision: [Total Peripherals Pty Ltd v IBM & Commissioner of Patents, (1998) AATA 784 (30 September 1998)].

The definition of an error or omission was expressed by Jenkinson J in Kimberly- Clark Ltd v Commissioner of Patents (No 3) (1988) 13 IPR 569 in the following terms [the references are to s 160 of the Patents Act 1952, which is equivalent to s 137 of the Designs Act 2003].

'It is in my opinion difficult to suppose that only the inadvertence and accidental steps, and not errors resulting from faulty reflection, of the former class of persons were intended by the draftsman to be within s 160 (1). Further, the word 'error' is not easily assigned a clear meaning restricted by reference to one or several particular categories of flawed mental function. The attempt is likely to lead to the drawing of fine and often unrealistic distinctions. And some errors of judgement by agents and attorneys may be as bizarre and as little to be anticipated as lapses of memory and accidental slip. …'

'I do not think that the conclusion I have reached reduces s 160(2)(a) to a mere general power of extension. By no means every judgement by "the person concerned" or by "his agent or attorney" which can be shown to have been mistaken will answer the description "error or omission" in the ordinary meaning of those words, which in their context carry, in my opinion, a connotation of obviousness of error.'

This was further considered in G S Technology Pty Limited v Commissioner of Patents (2004) 63 IPR 9.

'[65] Most errors and omissions which lead to a failure to do an act or take a step are the result of negligence or incompetence. Where such errors and omissions are made against a clearly demonstrated desire to maintain the application (and thus not have it lapse), and where attempts are made to remedy the error or omission as soon as its consequences are discovered and the existence of the error or omission learnt, as is the case here, the considerations in favour of an extension seem to me to be quite persuasive.'

'[72] …  assessing the conduct and state of mind of a person who is not a patent attorney against standards of what a competent attorney would have known, or would have done, to determine whether a discretion should be exercised, is wrong in principle.'

'[82]  The observations of Jenkinson J in Kimberly-Clark specifically note that an extension can occur with or without moral fault on the part of the agent. Further, what his Honour in fact said was that it was necessary to have means to evaluate the applicant’s moral claim to an indulgence, so that if there has been an absence of full and frank exposure of the circumstances relevant to the failure to do the act or make the step occurred, the means to evaluate the applicant’s moral claim to an indulgence will be lacking.'

Note: If the Registrar has good reason to believe the error or omission has arisen from the conduct of the agent, the extension should be granted on that basis even if it is not raised or relied upon by the agent when prosecuting the s 137 request; see, G S Technology Pty Limited and Commissioner of Patents and Anor [2004] AATA 1391.

D11.3.4 Error Must Be Causally Linked to Failure to do Relevant Act

There must be a causal connection between the error or omission and the relevant act that is required to be done within the stipulated time. In addition, the applicants for an extension must demonstrate that they had an intention to do the relevant required act, and that an error or omission on their, or their agent's behalf, reasonably could be said to have caused the failure to complete the relevant act in the time prescribed; (see Kimberly-Clark, supra at 579)

The mere fact that an act was not done is not itself a causative error. The causative error is the thing that resulted in the act not being done.

D11.3.5 Balance of Factors Including Full and Frank Disclosure

The balance of the relevant factors must favor the exercise of the discretion in favor of the applicant for an extension. The Registrar, in balancing these factors, is entitled to proceed on the basis that it is more important to consider the consequences of extending or refusing to extend time than to debate the reasons why the act was not done in time; (Sanyo v Commissioner of Patents, supra, at 479). Relevant factors include whether an applicant for an extension has given a full and frank disclosure of all the surrounding circumstances that led to the error or omission, including a disclosure of the chain of causation (Kimberly-Clark Ltd v Commissioner of Patents (No 3) (1988) 13 IPR 569). At page 583 Jenkinson J found that, in order to make out a proper case justifying an extension:

'an applicant would in my opinion have to go beyond a disclosure of the processes by which an agent's errors came to be committed, and would have to expose frankly, inter alia, all the conduct, knowledge, beliefs and mental processes (or, in the case of corporation aggregate, of the relevant officers and other agents) relevant to an understanding of the way the failure to do the act or take the step occurred, or relevant to an evaluation of the reasonableness of that conduct.'

Note: However, the Tribunal's discussion in Sanyo v Commissioner of Patents at 479 regarding the context in which Jenkinson J made these comments; and G S Technology Pty Limited v Commissioner of Patents (2004) 63 IPR 9 at [82].

D11.3.6 Circumstances Beyond Control

‘Circumstances beyond control’ is a force majeure provision. A force majeure is outside the control of the person concerned and something that could not have been avoided by that person's exercise of due care.

Delays by post and courier constitute the major source of these extensions. In some situations sickness or accident satisfy the requirement of this paragraph, e.g. if an applicant prosecuting his or her own case becomes seriously ill such that they cannot reasonably be expected to attend to their affairs at the relevant time, the probability is that he or she would be entitled to an extension. On the other hand, if a technical assistant to a firm of Attorneys missed a time limit owing to an illness, it would be expected that the firm would have made arrangements accordingly, in anticipation of this kind of occurrence. If not, it would appear that whereas error or omission might be involved, ‘circumstances beyond control’ would not be involved.

An action not done because of lack of funds is generally not a ‘circumstance beyond control’ (Vrubel v Upham (1996) 36 IPR 220). In particular, becoming bankrupt is not a circumstance beyond control within the meaning of s 137 (Reilly v Commissioner of Patents (1996) 36 IPR 314 at [49]). In this context it should be remembered that a sequestration order is made as the culmination of a sequence of events which the applicant could have avoided with the exercise of due care.

Anticipation of a Court judgement has been held to be a circumstance beyond a person's control (Jiejing Pty Ltd v Commissioner of Patents and Ron Thomas and Allan Garnham (1995) AIPC 91-144 at paras 104 and 105).

The Courts consider that the applicant 'stands in the shoes of his agent', to the extent that errors or omissions made by the agent (or by the agent's employees) are attributed also to the applicant. The word 'Employee' here means a direct employee and not an intermediary such as a courier or a postal authority. Arguments that an error or omission by the agent were beyond the control of the applicant are to be rejected.

The words 'circumstances beyond the control of the person concerned' has been interpreted in:

  • Board of Control of Michigan Technological University v. Deputy Commissioner (High Court appeal) - (1982) AIPC 90-005; and, (Federal Court) - (1981) 34 ALR 529
  • Rohrmoster v. Registrar of Trade Marks (1987) 7 IPR 551;
  • Abbott & Lamb Pty Ltd v. Registrar of Trade Marks (1991) AIPC 90-806;
  • Jiejing Pty Ltd v Commissioner of Patents and Ron Thomas and Allan Garnham (1995) AIPC 91-144; and
  • Solar Mesh Pty Ltd v Commissioner of Patents (1995) AIPC 91-138.

It may be observed that often the motivation for arguing that the extension should proceed under s 137(2)(b) is the more favourable fee treatment compared to s 137(2)(a) – particular if the extension is for a long period of time. This is particularly the case where the evidence clearly shows the existence of a relevant error or omission that would justify an extension under s 137(2)(a). However, such considerations are per se irrelevant to whether an extension should be granted.