IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 566 of 1997 BETWEEN: AMERICAN TELEPHONE & TELEGRAPH COMPANY Applicant AND: KRONE AKTIENGESELLSCHAFT Respondent JUDGE: LINDGREN J DATE OF ORDER: 12 OCTOBER 1998 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Lucent Technologies Inc be added as a party applicant in this proceeding; 2. American Telephone and Telegraph Company cease to be a party in the proceeding; 3. American Telephone and Telegraph Company pay the costs (if any) of the respondent thrown away by the change in the identity of the applicant; 4. American Telephone and Telegraph Company pay one half of the respondent's costs of the motion brought by notice of motion filed 3 September 1998. THE COURT NOTES THAT: 1. Lucent Technologies Inc, through its counsel, undertakes to the Court to be responsible for such costs, if any, of the respondent as may be ordered which are referable to any period before its being joined as applicant. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 566 of 1997 BETWEEN: AMERICAN TELEPHONE & TELEGRAPH COMPANY Applicant AND: KRONE AKTIENGESELLSCHAFT Respondent JUDGE: LINDGREN J DATE: 12 OCTOBER 1998 PLACE: SYDNEY REASONS FOR JUDGMENT (ex tempore) The applicant moves by notice of motion filed 3 September 1998 for an order that Lucent Technologies Inc ("Lucent") be added as a party applicant and that the present applicant cease to be a party. As well, the applicant seeks an order that the respondent ("Krone") pay the applicant's cost of the motion. The applicant was the applicant for letters patent under patent application 651028 in its name, "American Telephone and Telegraph Company". On 20 April 1994, the applicant changed its name to "AT & T Corp". On 29 March 1996, it assigned property to Lucent. It is not in dispute that one effect of this was to assign, inter alia, its then pending patent application. On 26 June 1997, the Commissioner of Patents ("the Commissioner") upheld Krone's opposition under s 59 of the Patents Act 1990 ("the Act") to the application for the patent. On 17 July 1997, the applicant commenced the present proceeding by way of appeal against the Commissioner's refusal of its application. The proceeding was commenced in the name of "American Telephone & Telegraph Company", notwithstanding the change of name to "AT & T Corp" on 20 April 1994 and the assignment to Lucent on 29 March 1996. On 22 September 1997, Spruson & Ferguson, solicitors for the applicant and for Lucent, wrote to the Commissioner seeking to have Lucent substituted as applicant. On 27 November, the Commissioner wrote back making a direction for the purposes of s 113 (2) of the Act. Section 113 provides, in summary, that where, before a patent is granted, a person would, if the patent were then granted, be entitled under an assignment to the patent or to an interest in it, the Commissioner may, on a request made by the person in accordance with the regulations, direct that the application proceed in the name of the person, and where the Commissioner gives such a direction, the person (here, Lucent) is to be taken to be the applicant and the patent request is to be taken to have been amended so as to request the grant of a patent to the person (here, Lucent). On 6 July 1998, at a directions hearing in this proceeding, the applicant raised for the first time as between it and Krone the question of a change in the identity of the applicant. On Friday 28 August 1998, Sprusons wrote to Davies Collison Cave, solicitors for Krone, asserting that those solicitors and Krone had been aware since, at the latest, 4 December 1997, that the patent application was assigned to Lucent. They advised that it was appropriate that the present applicant be removed as a party and that Lucent be, in effect, substituted at the next directions hearing on 9 September 1998. Sprusons enclosed a form of short minutes of orders and requested that they be signed and returned. They advised that if they did not receive a favourable reply by 5.00 pm on 1 September, they would assume that Krone did not consent and would file the necessary notice of motion returnable at the directions hearing. It will noted that Sprusons allowed two business days, if one leaves out of account the weekend of 29 and 30 August. The applicant filed its notice of motion on 3 September 1998 and it was, as foreshadowed, returnable on 9 September. Krone does not object to the making of orders 1 and 2 sought in the notice of motion, that is, orders that Lucent be added as a party applicant and that American Telephone and Telegraph Company cease to be a party. Krone submits, however, that there should be conditions. It submits, first, that American Telephone and Telegraph Company should be ordered to pay the costs of the respondent thrown away by the change of identity of the applicant and also the costs of the motion. As well, it says that there should be an order that Lucent pay, if the appeal is unsuccessful or withdrawn or otherwise terminated without being allowed, Krone's costs of the proceeding from the commencement of the proceeding down to the time of change of applicant. Apparently, the purpose of this second order as to costs is to ensure that any ultimate costs order against Lucent shall extend to include the costs for the period when Lucent was not the applicant. For its part, Lucent has proffered an undertaking to the Court to be responsible for such costs as may be ordered which are referable to any period before its joinder. I have to say that it seems to me unfortunate that it should have proved necessary for these issues to be debated. It took a long while, indeed, for American Telephone and Telegraph Company to take any action in relation to either the change of its name to AT & T Corp or in relation to the assignment to Lucent. I also think that it was peremptory for that company, through its solicitors, to allow only from Friday 28 August to the following Tuesday 1 September, for a response against the threat of the filing of a notice of motion. On the other hand, I think that the case was clearly one where the making of orders 1 and 2 was inevitable. As senior counsel for the applicant has pointed out, s 113 of the Act has produced that result. I also think it clear that if an order were ultimately to be made that Lucent pay Krone's costs, the order would encompass payment of Krone's costs in respect of the period prior to the time when Lucent was substituted as applicant. On the view I take, it is unreasonable to think that Krone should have been required to respond so promptly as to make available the procedure under O 35 r 10, which would, with the allowance of more time, have been the sensible way for this matter to be resolved. It follows that it was necessary for Krone to be represented on the hearing of the applicant's motion. To some extent, therefore, it should receive its costs. But it should not receive all of its costs since it has not had success on the pre-joinder costs issue. The orders of the Court are that: 1. Lucent Technologies Inc be added as a party applicant in this proceeding; 2. American Telephone and Telegraph Company cease to be a party in the proceeding; 3. American Telephone and Telegraph Company pay the costs (if any) of the respondent thrown away by the change in the identity of the applicant; 4. American Telephone and Telegraph Company pay one half of the respondent's costs of the motion brought by notice of motion filed 3 September 1998. Although I do not think it necessary to do so, I also note that the Court accepts the undertaking of Lucent Technologies Inc, through its counsel, to the Court to be responsible for such costs, if any, of the respondent as may be ordered which are referable to any period before its being joined as applicant. I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. Associate: Dated: 20 October 1998 Counsel for the Applicant: Mr D M Yates SC Solicitor for the Applicant: Sprusons: Solicitors Counsel for the Respondent: Ms K Howard Solicitor for the Respondent: Davies Collison Cave Solicitors Date of Hearing: 8 October 1998 Date of Judgment: 12 October 1998