Supreme Court New South Wales

• Medium Neutral Citation: Con Kafataris & Ors v Cory Davis & Ors [2014] NSWSC 1454
• Hearing dates: 8, 9, 10, 11 September 2014
• Decision date: 24 October 2014
• Jurisdiction: Equity Division - Expedition List
• Before: Sackar J

Decision

See paragraph [255]

• Catchwords: EQUITY - whether plaintiff should be declared to be an inventor - whether misuse of confidential information - whether plaintiff made a material contribution to final form of invention - extent to which information sought to be protected can properly be regarded as confidential in nature - whether parties in fiduciary relationship
• Legislation Cited: Patents Act 1990 (Cth); Patents Regulations 1991 (Cth)
• Cases Cited: Ali v Nationwide News Pty Ltd [2008] NSWCA 183; Bates & Partners Pty Ltd v Law Book Co Ltd (1994) 29 IPR 11; CCOM Pty Ltd v Jiejing Pty Ltd (1994) 122 ALR 417; Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389; Costa v GR & IE Daking Pty Ltd (1994) 29 IPR 241; Cubillo v Commonwealth of Australia [2000] FCA 1084; (2000) 174 ALR 97; Del Casale and Ors v Artedomus (Aust) Pty Ltd [2007] NSWCA 172; (2007) 73 IPR 326; Firebelt Pty Ltd v Brambles Australia Pty Ltd (1998) 43 IPR 83; Firebelt Pty Ltd v Brambles Australia (2002) 188 ALR 280; Hospital Products International v United States Surgical Corporation (1984) 156 CLR 41; Independent Management Resources Pty Ltd v Brown (1986) 9 IPR 1; JMVB Enterprises v Camoflag Pty Ltd (2005) 67 IPR 68; Krueger Transport Equipment Pty Ltd v Glen Cameron Storage & Distribution Pty Ltd (2008) 78 IPR 262; Minnesota Mining and Manufacturing Company v Beiersdorf (Australia) Limited (1980) 144 CLR 253; Polwood v Foxworth (2008) 165 FCR 527; RLA Polymers Pty Ltd v Nexus Adhesives Pty Ltd (2011) 280 ALR 125; Row Weeder Pty Ltd v Nielsen and Ors (1997) 39 IPR 400; University of Western Australia v Gray (2008) 76 IPR 222; University of Western Australia v Gray (2009) 82 IPR 206; Wake v Cavitus Pty Ltd (2010) 88 IPR 169; [2010] APO 11; Watson v Foxman (1995) 49 NSWLR 315
• Texts Cited: Bodkin, Patent Law in Australia (Thomson Reuters, 2nd edition)
• Category: Principal judgment
• Parties: Con Kafataris - first plaintiff; Dragon Double Bet Pty Ltd - second plaintiff; Cory Davis - first defendant; Rowland Thomas - second defendant
• Representation: Counsel: R Newlinds SC, P Flynn, C Bova - plaintiffs; J Hennessy SC - defendants; Solicitors: Marque Lawyers - plaintiffs; Gilbert & Tobin - defendants
• File Number(s): 2013/380279

Judgment

Proceedings

1 By their further amended statement of claim filed 25 August 2014, the plaintiffs sought relief in relation to an invention the subject of a patent application, and a myriad of other forms of relief on the basis of purported agreements between the parties, estoppel, misleading and deceptive conduct, unconscionability and breach of copyright.

2 At the commencement of the hearing, counsel for the plaintiffs indicated that their case would be dramatically reduced. In essence, the case was only limited to the two issues of whether the plaintiff should be regarded as an inventor within section 15 of the Patents Act 1990 (Cth) and whether there had been misuse of the plaintiff's confidential information by the defendants.

3 In broad terms, the defendants deny the plaintiff is an inventor or that there has been a misuse of confidential information.

Background facts

4 The first plaintiff is Mr Con Kafataris (Mr Kafataris). Mr Kafataris has extensive experience in the wagering and gaming industries, including operating as an oncourse bookmaker, and he is an experienced businessman.

5 The second and third plaintiffs, Oxford Number 1 Pty Ltd (formerly known as Dragon Double Bet Pty Ltd) and Group Investment Australia Pty Ltd, did not seek any relief in these proceedings as a result of the reduced scope of the plaintiffs' case. For the sake of clarity, I will therefore refer to Mr Kafataris as the singular plaintiff.

6 The first defendant is Mr Cory Davis (Mr Davis). The second defendant is Mr Rowland Thomas (Mr Thomas). The third defendant is Mr William Davis. Mr William Davis does not play a role in the dispute before me, nor is any claim pressed or relief sought against him. For the sake of clarity, I refer to the first and second defendant collectively as the defendants (without including Mr William Davis).

7 On 14 February 2012, the defendants met with a patent attorney named Mr John Walsh (Mr Walsh). He affirmed two affidavits dated 4 and 11 July 2014. Mr Walsh gave evidence as to his understanding of the invention at that time at paragraphs [13] and [14] of his affidavit affirmed 4 July 2014. A file note of this meeting appears at page 3 of Exhibit P2. I will return to this issue later in my judgment, as Mr Walsh was cross-examined at some length about his affidavit evidence and the file note dated 14 February 2012, amongst others. His affidavit of 11 July was in the form of an expert report.

8 On 3 April, Mr Davis filed a provisional patent application with IP Australia, with the invention titled "Baccarat game with supplementary betting option" (the provisional application). The application was prepared by Mr Walsh and Mr Thomas is named as the sole inventor of the invention the subject of that application.

9 That application relevantly provided as follows:

BACCARAT GAME WITH SUPPLEMENTARY BETTING OPTION

BACKGROUND

The present invention relates to games of chance and more particularly relates to a game feature whereby a player can play a primary game and exercise bet options on a secondary or auxiliary game either separate from the primary game or in co-operation with the primary game. The present invention also relates to an alternative to the known baccarat games which provides increased betting options and increase actual or perceived opportunities for a win.

The invention also relates to gaming games of chance in which a player is provided with an increased opportunity to bet during a primary game of chance. More particularly the invention relates to improvements in the gaming game of baccarat. The invention relates to providing such game improvement in real or electronic form [sic].

PRIOR ART

[this section sets out the existence of special game features to attract player interest, such as jackpots and features associated with an increased probability of winning; and an extended description of the rules of Baccarat]

INVENTION

The present invention provides an alternative to the known baccarat game regimes whereby a player can play a primary game and exercise bet options on a secondary or auxiliary game either separate from the primary game or in co operation with the primary game. The present invention provides increased betting options and increases actual or perceived opportunities for a win during a primary game of chance. The invention also provides the above features in real (table gaming) or electronic form. The invention further provides a betting regime for allowing a player to bet on a third card which is dealt depending upon the [sic; at T270/11 the missing word(s) were raised in closing submissions]

In its broadest form the present invention comprises:

A method of playing baccarat comprising the steps of:

a) dealing at least one player a first card;

b) dealing a banker a first card;

c) dealing said at least one player a second card forming a hand with the first player card;

d) dealing said banker a second card forming a hand with the first banker card

e) prior to dealing the above hands, placing a bet/wager on the first or second of said hands in favour o a player the banker, a pair or a tie;

f) depending upon the totals of the two card in the first hands allowing a player to receive a third card or allowing the banker to receive a third card;

g) prior to receiving the third card, placing a bet/wager on an outcome based on the effect of the player or banker's third card on the outcome;

h) determining a wins status from the outcome of the third card.

According to a preferred embodiment, if the banker draws cards totalling less than 6, the banker will be issued with a third card which he must take. If the Player draws cards totalling less than 6, the player will be issued with a third card which he must take.

According to a preferred embodiment, if the two cards drawn by player total less than 6 and the banker draws two cards totalling 6 or 7, then a third card will be issued to the player. The player must accept this card and the banker must stand on 6 or 7. Prior to the dealing of the third card to the player, an opportunity exists to place a second (double up) bet on either the player or the banker. The third card deal is compulsory once first hand criteria are met.

In another broad form the present invention comprises:

a game of baccarat in which a player is allowed a bet/wager on the effect of a third card dealt after predetermined criteria are met on a first hand dealt to a banker and player.

According to a preferred embodiment the dealing of the third card to the banker or player allows an opportunity to a player to place a first or second bet on the outcome of the effect of the third card whether the third card is dealt to the player or banker. According to one embodiment a player may decide not to be on the first hand but may elect to bet on the second or auxiliary hand including the third card.

In its broadest form the present invention comprises:

A baccarat game in which at least one player and banker are dealt a first hand and contingent upon the outcome of the first hand and subject to the first hand meeting game criteria, a player or banker wagers on a hand which includes a third card dealt to either the banker or player subject to game criteria being met.

According to a preferred embodiment if game criteria based on the first hand are met a compulsory third card is dealt, prior to which a player or banker has the opportunity to bet on the effect of the third card on the second hand.

The present invention provides an alternative to the known prior art and the shortcomings identified. The foregoing and other objects and advantages will appear from the description to follow. In the description reference is made to the accompanying representations, which forms a part hereof, and in which is shown by way of illustration specific embodiments in which the invention may be practiced. These embodiments will be described in sufficient detail to enable those skilled in the art to practice the invention, and it is to be understood that other embodiments may be utilized and that structural changes may be made without departing from the scope of the invention. In the accompanying illustrations, like reference characters designate the same or similar parts throughout the several views. The following detailed description is, therefore, not to be taken in a limiting sense, and the scope of the present invention is best defined by the appended claims.

BRIEF DESCRIPTION OF DRAWINGS

The invention will now be described in more detail according to a preferred but non limiting embodiment and with reference to the accompanying illustration.

Figure 1 shows a plan view of a BAACARAT table layout according to a preferred embodiment.

Figure 2 shows a plan view of a baccarat table according to an alternative embodiment.

DETAILED DESCRIPTION

According to one embodiment of the invention a player is dealt the first card, followed by one to the banker. A second card is then dealt to the player followed by second card to the banker. These four cards form the initial hand and first bets can be placed prior to dealing. Bets at this point can be placed on player, banker, tie or pairs according to conventional methodology. Ace counts as one. Tens and all picture cards count as zero as per usual criteria.

If the two cards drawn by either player or banker total 8 or 9, this is called a natural and no further card will be issued on the game. If both player and banker have a total of 9, this is deemed a tie. Bets placed on the tie would be paid at 8 to 1. Bets placed on player or banker are refunded. Bets placed on pairs are forfeited.

If player totals 9 and the banker totals 8, the player wins.

If player totals 8 and the banker totals 9, the banker wins.

If player and the banker total 8, this game is deemed a tie and all bets placed on player or the banker are refunded. IF the 8 is made up of 2 X fours in either or both hands, pairs will be paid at 11 to 1.

If the two cards drawn by the player total 7, the player must stand and no third card will be issued to player. If the banker draws cards totalling less than 6, the banker will be issued with a third card which he must take. The double up draw on the third card is once relevant criteria are satisfied compulsory.

Currently there is no regime to allow betting on an outcome generated by the dealing of the third card. Prior to the dealing of the third card to the banker, an opportunity is provided to a player to place a second bet (irrespective of whether the player has bet on the outcome of the primary game - i.e. dealing of the first two cards) on the outcome of the effect of the third card whether the third card is dealt to the player or banker. Any bets on the initial hand or primary game will stand and can be made independent of the outcome of the secondary betting on the third card or contingent upon the outcome of the betting on the first two cads. The betting regime can be adjusted as required within the framework of the original bet if made or at least as a consequence of the initial card deal to player or banker.

If the two cards drawn by the player total 6, the player must stand and no third card will be issued to the player. If the banker draws 7, the banker wins. If the banker draws 6, tie will be paid at 8 to 1. The player and the banker bets will be refunded if the tie is paid.

If the two cards drawn by the player total less than 6 and the banker draws two cards totalling 6 or 7, then a third card will be issued to the player. The player must accept this card and the banker must stand on 6 or 7. Prior to the dealing of the third card to the player, an opportunity exists to place a second (double up) bet on either the player or the banker. Initial bets stand.

If the player and the banker draw cards totalling less than 6, both the player and the banker will receive and must accept a third card. Prior to the dealing of these third cards, an opportunity exists to place a second (double up) bet on either the player or the banker. Initial bets stand.

If the player draws two cards of the same denomination (eg 2 x 2,2 x KING, 2 x ACE), then the player pair bets will be paid at 11 to 1, irrespective of the final outcome of the game. If the banker draws to cards of the same denomination (eg 2 x 2,2 x 6,2 x 10), then the banker pair bets will be paid at 11 to 1, irrespective of the final outcome of the game. If both the player and the banker draw two cards of the same denomination, then both the player and the banker pair bets will be paid at 11 to 1, irrespective of the final outcome of the game. Pairs do not affect this issuing of third cards when appropriate. This second bet allows patrons to make a more informed decision for investment in the game.

Figure 1 and 2 show baccarat tables in alternative forms on which the game regimes according to the invention may be played in casino environments.

The above described game play methodology and third card betting regime according to the invention in all its forms, is also adaptable to on line and internet gaming, gaming on electronic hand held devices and on devices such as computers, ipads, iphones and gaming machines. In each case the game rules may be altered to suit regulatory requirements or device capability provided each allows the capacity for a player to wager on a third card separately or in addition to a previously laid wager on a first hand of two cards..

It will be recognised by persons skilled in the art that numerous variations and modification may be made to the invention broadly described herein without departing from the overall spirit and scope of the invention.

Dated this 3rd day of APRIL 2012

CORY DAVIS

By His Patent Attorneys

WALSH & ASSOCIATES

10 As will become clear, whether or not the provisional application could be construed to include all casino card table games was the subject of considerable debate before me.

11 Trade mark applications were also filed by Mr Walsh on behalf of Mr Davis.

12 Following the filing of the provisional application, the defendants sought the assistance of Dr Samuel Müller, Senior Lecturer and Director of Postgraduate Studies in the School of Mathematics and Statistics at the University of Sydney (Dr Müller). Dr Müller swore an affidavit for the purposes of these proceedings but it was not read.

13 After a number of attempts, on 8 August Dr Müller emailed Mr Davis with his calculations of the playing odds that casinos might adopt for the invention the subject of the provisional application.

14 On 14 November, the plaintiff was introduced to the defendants at a meeting arranged by Mr George Barbouttis (Mr Barbouttis). Mr Barbouttis was a former employee of the plaintiff. He swore an affidavit in these proceedings but he was not required for cross-examination.

15 The plaintiffs assert that Mr Barbouttis approached Mr Kafataris on the basis that the defendants required assistance with the mathematics for inclusion in the invention the subject of the provisional application. The defendants say that they sought the assistance of Mr Kafataris because they were informed that he could introduce them to people in the casino business who might be interested in licensing the invention. The content of the meeting was disputed and insofar as it is necessary I shall return to this later in the judgment.

16 Following this meeting, Mr Davis forwarded an email from Dr Müller to the plaintiff. That email attached the results obtained by Dr Müller. The plaintiff asserts that he reviewed those documents and observed some difficulties with them, such as the failure to consider all possible outcomes and that the odds were unworkable in a commercial context (i.e. for provision to a casino).

17 On 12 December, the plaintiff sent an email to the defendants which attached examples of betting tables and odds relating to (or in addition to, depending on its characterisation) the invention the subject of the provisional application (CB1/115). Those betting tables were in relation to the game of baccarat, and are referred to in the pleadings as the First Kafataris Additions.

18 On 19 December, the plaintiff, defendants and Mr Barbouttis had a meeting. The content of that meeting is disputed. Amongst other things, Mr Kafataris asserts that Mr Thomas proposed a partnership whereby Mr Kafataris would have a 30% share, with Mr Davis to have 30%, Mr Thomas to have 30% and Mr Barbouttis to have 10%. Mr Davis and Mr Thomas assert the financial arrangement was proposed by Mr Barbouttis. Mr Barbouttis does not recall the meeting.

19 On 26 December, the plaintiff sent an email to the defendants and Mr Barbouttis (CB1/121) that included a spreadsheet with examples of odds relating to baccarat, referred to in the pleadings as the Second Kafataris Additions.

20 On 28 December, the plaintiff, defendants and Mr Barbouttis had a meeting. Although the content of that meeting is disputed, nothing of substance turns on this.

21 On 3 January 2013, the plaintiff, defendants and Mr Barbouttis had another meeting, and again the content of that meeting is disputed but nothing of substance turns on this.

22 On 17 January, the plaintiff, defendants and Mr Barbouttis had a teleconference with Mr Walsh. Mr Walsh informed them that a PCT application would need to be made by 3 April 2013. This deadline was to become of considerable importance.

23 On 12 February, the plaintiff met with Mr Davis and Mr Barbouttis to outline a proposal to invest and continue his involvement. The plaintiff asserts that the reason he proposed 51% ownership for himself was that "I intend to add a blackjack invention that I have been working on to the patent application" (affidavit of the plaintiff dated 26 March 2014 at [73]).

24 On 13 February, Mr Davis requested that Mr Kafataris 'please confirm the offer by email or in writing to discuss with Roland [sic]' (CB1/143).

25 On 15 February, the plaintiff sent an email to the defendants and Mr Barbouttis which contained a commercial proposal including a proposed ownership split and company structures (the proposal email). Some of the terms of the proposal email included the following (CB1/147):

Following our meeting of 12 February, I enclose the terms in which I am willing to invest in and continue with Dragon Double Up Baccarat. This offer is also dependant on further legal advice I will be seeking regarding structure and any other conditions that may be suggested by my lawyers, however a likely scenario as annexed to this document.

As mentioned on Tuesday, I believe the success of this business is dependent on a skilled and experienced management company who are already connected to the gaming and wagering industry and who can substantially decrease the time to market. I propose that I lead and operate the Management Company based on my extensive industry involvement and enclose some highlights and potential benefits of my experience.

[The plaintiff then set out his experience under headings of General Management, Operations, Sales and Marketing and Financial]

Below are some basic terms and/or conditions that also form the basis of my offer and again I note that these details are not complete and are subject to further legal advice.

[The plaintiff then set out a structure involving a 51% interest in his favour and a 49% interest in favour of the defendants and Mr Barbouttis]

26 On or around 18 February, the plaintiff sent an email to the defendants and Mr Barbouttis which attached an updated spreadsheet including recommended odds.

27 On 25 February, the plaintiff had a meeting with the defendants at which the proposal of the plaintiff was discussed. The content of that meeting is disputed, but as the plaintiff did not press the contract and estoppel claims that were reliant on it little turns on it.

28 Mr Kafataris asserts that during the period from January to March 2013, he developed a betting opportunity that was specific to blackjack, rather than baccarat. It is the characterisation of this development that forms the central part of the plaintiff's case. The plaintiff asserts that it was a material contribution to the invention set out in the PCT application. The defendant asserts that the development was already covered in the terms of the provisional application or alternatively merely an application of the invention that was obvious to a person skilled in the art, and hence not a material contribution.

29 On 28 February, Mr Kafataris instructed his lawyers to formally document the commercial proposal. As will become clear from the following chronology, the commercial negotiations between the parties were intertwined with the insertion of the blackjack development into the final form of the application. It should also be noted that these negotiations were taking place in the context of the looming deadline of 3 April, to which I have already referred, for the PCT application to be filed.

30 On 4 March, the plaintiff called Mr Walsh. Mr Walsh gives his version of this conversation at [44]-[48] of his first affidavit. He suggests that Mr Kafataris wanted to include a reference to blackjack in the PCT application, but that he regarded blackjack as "just another embodiment of the alleged invention" and did not think it was essential to include it. Mr Walsh's file note of this conversation appears at Tab 16 of Exhibit P2.

31 Mr Kafataris, in his affidavit in reply at [96], disagrees with this account and denies that Mr Walsh said words to that effect. I will return to this meeting later.

32 On 7 March, Mr Kafataris wrote to Mr Davis seeking information about the background of the defendants and the details of ownership of units in the new trust. Mr Davis replied on 9 March indicating that the information would be provided on 11 March (CB1/267).

33 On 10 March, the plaintiff sent an email to Mr Walsh which outlined the possible application of the supplementary betting option to blackjack. That email relevantly provided (CB1/217):

Further to our telephone conversation last week find below description of the variant blackjack bet type.

The concept is similar to baccarat where the patron has an option for a 2nd bet

This is where the dealer will stand on a hand between 17 and 21 or lost (22 or over) after the first 2 cards have been dealt to each of the patrons and the dealer

The 2nd option to bet on whether the bank will Bust (get over 21) or not

An example would be a way to demonstrate this.

All the patrons are dealt their 2 cards face up and be the dealer is dealt 1 card facedown and one card revealed face up.

Assume the dealer gets a hand with a 9 showing face up. There is a strong chance the dealer will not bust so odds could be say a $1.40 to get between 17 and 21 and odds of $3.00 to bust (dealer must stand on 17 or over)

Another example would be if the dealer gets a hand with a 6 face up. In this instance there is a strong chance for the dealer to bust and hence the odds could be reversed to say 1.50 to bust and 2.50 to get between 17 and 21

I have yet to complete the mathematics, however I'm hoping the above example is enough to protect the patent and join the current patent application for Baccarat.

34 On 11 March, Mr Walsh met with the defendants to discuss Mr Kafataris' idea in relation to blackjack. A file note of that meeting appears at Tab 19 of Exhibit P2.

35 On 18 March, Mr Davis emailed Mr Kafataris to inquire, on behalf of Mr Thomas, when the contracts would be ready (CB1/268).

36 Also on 18 March, the plaintiff sent an email to Mr Walsh which set out the specifications of the possible application of the supplementary betting option to blackjack. Mr Kafataris also suggested some changes to the baccarat rules document. On 20 March, the plaintiff forwarded this email to Mr Davis.

37 Between 20 March and 25 March, correspondence was exchanged between Mr Kafataris and his lawyers regarding the drafting and finalisation of the commercial documents, being a Unitholders Agreement, Management Agreement and Trust Deed.

38 On or around 25 March, various documents setting out the proposed commercial arrangements between the various parties were forwarded by the plaintiff to Mr Davis. Various discussions were held between the parties and their legal representatives but those documents were never executed. As the claim in contract is not pressed, it is not necessary to set out those emails or discussions in detail other than to note a few key aspects.

39 On 26 March, Mr Kafataris met with Mr Davis and Mr Thomas to discuss the documents which had been provided. Following the meeting, Mr Kafataris emailed his solicitor in the following terms (CB1/388):

Hi Chaz,

I have just finished the meeting with Rowland and Cory, and in summary they have accepted the documents as are. I don't think they have had any dialogue with John Walsh about them as yet but they indicated that there won't be any changes to the commercials. This was somewhat as a surprise to me and I expected some pushback on some of the commercials however it wasn't forthcoming. I suppose I should be happy about this but is there something we are missing?

We are looking to execute the documents at 1.30pm this Thursday [28 March]...

40 Correspondence continued between the solicitors for Mr Kafataris and Mr Walsh in relation to the 3 April deadline for filing.

41 On 2 April, Mr Kafataris indicated in an email to his solicitors (CB1/454) that the commercial documents would be executed the following day, once the defendants had seen their solicitor.

42 On 3 April, Mr Kafataris became aware that the defendants would not be executing the relevant documents and wanted to restructure the deal.

43 Also on that day, Mr Davis filed a complete International (PCT) Patent Application No 2013/000342 (the PCT application) that claims priority from the provisional application.

44 Further correspondence between the solicitors for the plaintiff and the solicitors for the defendants did not lead to the execution of any documentation between the parties.

45 On or about 22 April, Mr Thomas purported to assign his legal interest in the provisional application and the PCT application to Mr Davis.

46 On 10 October, the PCT application was made publicly available.

Issues arising in this case

47 As mentioned previously, the plaintiff's case was substantially reduced on the first day of the trial to two primary issues, namely whether Mr Kafataris was an inventor of the invention the subject of the PCT application and whether there had been a misuse of confidential information.

48 It is however necessary to carefully articulate those matters which need to be determined prior to examining the applicable legal principles, as each party has acknowledged that certain matters are not directly before the Court and need not be determined by me.

49 The plaintiff acknowledges that there is no question before the Court as to the inventors of the provisional application (final submissions at [15]). That much is obvious given the absence of any form of contact between the parties at the time the provisional application was filed.

50 The plaintiff also acknowledges that there is no question directly before the Court as to whether the PCT application is entitled to claim the priority date of the provisional application (final submissions at [16]).

51 That question of priority would be resolved by section 40 of the Patents Act and the relevant regulations of the Patents Regulations 1991. It is not contested that the legislative framework that took effect from 15 April 2013, known as the Raising the Bar reforms, would apply, inter alia, to the resolution of the priority date question. Those reforms replaced the concept of "fair basis" with a requirement of clear disclosure. Regulation 3.12(4) now provides a definition of clear disclosure as follows:

In this Division, a document clearly discloses an invention if the document discloses the invention in a manner that is clear enough, and complete enough, for the invention to be performed by a person skilled in the relevant art.

52 Likewise, the question of whether the generalisation to all card games in the claims of the PCT application is supported by the matter disclosed in the specifications also does not arise. However, that question, described as the internal aspect of fair basis or clear disclosure, is correctly characterised by the plaintiff as being "undoubtedly a live issue in the Patents Office" (final submissions at [34]).

53 It is submitted by the plaintiff at [35] of final submissions that "it is not strictly necessary to prove that Mr Kafataris' contribution involved an inventive step, merely that it was material to the final form of the invention. However, Mr Kafataris submits that his contribution did involve an inventive step...".

54 Counsel for the plaintiff initially contended that the only invention Mr Kafataris makes is blackjack and said that was a separate and distinct invention (T2/38). That position was resiled from (T11/13) and definitively abandoned (T304/20-T311/44). Clearly the question of whether the invention as described in the PCT application is indeed patentable is also not for determination in this case. As counsel for the defendants rightly points out at [65] of his closing submissions, whether a supplementary betting option for any card game can be an invention will be considered as part of the examination process, any opposition hearing or in any future infringement action.

55 However the specific relief sought by the plaintiff makes it abundantly clear that the plaintiff accepts that the relevant invention is that described in the PCT application.

56 It seems to me when the PCT application is considered as a whole the invention is described as a method of wagering whereby a player is able to exercise a betting option on a secondary or auxiliary game either separate from the primary game or in co operation with the primary game. It is also made abundantly plain in the PCT application that although the invention is described with reference to baccarat and blackjack it is asserted that it can be adapted to alternative card games again however without further examples. When one considers the claims which are set out in some detail in the PCT application it is even clearer that what is being described albeit in the context of baccarat and blackjack is a method of wagering on a card game in which a player has a secondary bet or wager option.

Legal principles

Inventorship

57 The plaintiff seeks a declaration that he is an inventor, within the meaning of section 15 of the Patents Act 1990 (Cth), of the invention the subject of the PCT application.

58 Section 15 provides:

15 Who may be granted a patent?

(1) Subject to this Act, a patent for an invention may only be granted to a person who:

(a) is the inventor; or

(b) would, on the grant of a patent for the invention, be entitled to have the patent assigned to the person; or

(c) derives title to the invention from the inventor or a person mentioned in paragraph (b); or

(d) is the legal representative of a deceased person mentioned in paragraph (a), (b) or (c).

(2) A patent may be granted to a person whether or not he or she is an Australian citizen.

59 Section 16 sets out the consequences of co-ownership of patents:

16 Co-ownership of patents

(1) Subject to any agreement to the contrary, where there are 2 or more patentees:

(a) each of them is entitled to an equal undivided share in the patent; and

(b) each of them is entitled to exercise the exclusive rights given by the patent for his or her own benefit without accounting to the others; and

(c) none of them can grant a licence under the patent, or assign an interest in it, without the consent of the others.

(2) Where a patented product, or a product of a patented method or process, is sold by any of 2 or more patentees, the buyer, and a person claiming through the buyer, may deal with the product as if it had been sold by all the patentees.

(3) This section does not affect the rights or obligations of a trustee or of the legal representative of a deceased person, or rights or obligations arising out of either of those relationships.

60 Patentable inventions are described in section 18. "Invention" itself is defined in the Dictionary (Schedule 1 of the Act) as meaning any manner of new manufacture the subject of letters patent and grant of privilege within section 6 of the Statute of Monopolies, and includes an alleged invention.

61 As will appear from the authorities referred to, whether or not a person should be regarded as an inventor is quintessentially a question of fact and it is therefore important to carefully analyse precisely what the person has done in relation to the invention and whether that can be described as qualitative or quantitative.

62 In Bodkin's Patent Law in Australia (2nd edition), the author notes at [8030] that there has been relatively little judicial consideration in Australia of what amounts to inventorship.

63 In JMVB Enterprises v Camoflag Pty Ltd (2005) 67 IPR 68, Crennan J observed at [132]:

Rights in an invention are determined by objectively assessing contributions to the invention, rather than an assessment of the inventiveness of respective contributions. If the final concept of the invention would not have come about without a particular person's involvement, then that person has entitlement to the invention. One must have regard to the invention as a whole, as well as the component parts and the relationship between the participants. The fact that the parties were in collaboration can be a major consideration: see Illuka Midwest Ltd v Wimmera Industrial Minerals Pty Ltd (2001) 55 IPR 140; Re Upham and Commissioner of Patents (1998) 28 AAR 276; [1998] AATA 852; Re Applications by CSIRO and Gilbert (1995) 31 IPR 67; Row Weeder Pty Ltd v Nielsen (1997) 39 IPR 400; Sunstrum & Payette v Boland (2003) 59 IPR 146.

64 In Polwood v Foxworth (2008) 165 FCR 527 (per Finn, Bennett and Greenwood JJ), the Court said:

[33] The entitlement to the grant of a patent as the inventor is not determined by quantitative contribution. The role of joint inventors does not have to have been equal; it is qualitative rather than quantitative. It may involve joint contribution or independent contributions. The issue is whether the contribution was to the invention. What constitutes the invention can be determined from the particular patent specification which includes the claims. In some cases, evidence can assist. In some cases, the reduction of a concept to a working apparatus by a person may not be part of the invention, in other cases it may be. For example, the construction of an apparatus may involve no more than carrying out the instructions in the specification. This would not normally entitle that person to joint inventorship. On the other hand joint inventorship may arise where the invention is in the apparatus itself, or where the person constructing the apparatus contributed to a different or better working of it which is then described and claimed.

[34] One criterion for inventorship may be to determine whether the person's contribution had a material effect on the final invention. It may be that an invention is made as part of a collaborative effort. In those circumstances, it would ordinarily follow that the collaborators are joint inventors of the product of the collaboration. In the present case, the subject of the patent application was not part of a continuing collaboration recognised as such by the parties.

[35] To ascertain the inventor for the purposes of entitlement to the grant of the patent it is therefore necessary to determine the contributions to the invention described in the patent application. The claims may assist in that determination, bearing in mind that the claims may be to less than the totality of the invention. It may also be appropriate to investigate the contributions to the inventive steps giving rise to the invention.

...

[60] The invention or inventive concept of a patent or patent application should be discerned from the specification, the whole of the specification including the claims. The body of the specification describes the invention and should explain the inventive concepts involved. While the claims may claim less than the whole of the invention, they represent the patentee's description of the invention sought to be protected and for which the monopoly is claimed. The claims assist in understanding the invention and the inventive concept or concepts that gave rise to it. There may be only one invention but it may be the subject of more than one inventive concept or inventive contribution. The invention may consist of a combination of elements. It may be that different persons contributed to that combination.

65 At [8070] of Patent Law in Australia, it is noted that "it has been said in a number of cases that it is not appropriate to consider the novelty or inventiveness of what is alleged to be the invention, before determining whether a person was properly identified as the inventor or co-inventor of it". This must be correct, as otherwise quite distinct stages of enquiry would be unnecessarily conflated.

66 In University of Western Australia v Gray (2008) 76 IPR 222, French J (as His Honour then was) observed at [1441]:

Plainly there are no bright lines to be drawn between inventorship based on inventive concept and verification or reduction to practice. In the Polwood case the Full Court found that the patent application described the apparatus as an aspect of the invention. It was described and claimed. Polwood did not itself play any part in its design and construction prior to the filing of the patent application. The apparatus was held at first instance to be "an invention" of Foxworth. So there was a finding of inventive contribution by Foxworth. The concept itself was not found sufficient to encompass the machine that made it workable. Those factors argued against Polwood's contention that the concept equated with the invention of the patent application.

67 On appeal, in University of Western Australia v Gray (2009) 82 IPR 206, the Full Federal Court (comprising Lindgren, Finn and Bennett JJ) dismissed the appeal. At [248], the Court observed:

Polwood does not change Australian law in respect of the identification of inventorship. The law remains that a putative inventor or putative joint inventor must have made a material contribution to the invention. What the case illustrates is that the reduction to practice of an inventive concept may or may not require an invention or inventive step. If not, reduction to practice does not demonstrate inventorship.

68 Counsel for the plaintiff pointed to several decisions by delegates of the Commissioner of Patents in their written submissions.

69 Costa v GR & IE Daking Pty Ltd (1994) 29 IPR 241 was cited in support of the proposition that if the final concept of an invention would not have come about without a particular person's involvement, then that person has an entitlement to that invention as joint inventor.

70 In Row Weeder Pty Ltd v Nielsen and Ors (1997) 39 IPR 400, the Delegate discussed several decisions that gave guidance with respect to an application for a declaration as to entitlement as an inventor, observing at 405:

The Harris v CSIRO (1993) 26 IPR 469 decision puts forth a number of questions to consider. These are: (1) what the invention(s) is/are of the person making the s 36(1) request; (2) what the invention(s) disclosed in the specifications is/are of the person who made the patent application; and (3) whether one person has any rights in the invention of the other, and vice versa. The decision also suggests a more significant question of whether the invention would have occurred without a particular person's involvement.

The Costa v GR & IE Daking Pty Ltd (1994) 29 IPR 241 decision found two people to be joint inventors since the invention only occurred because of the involvement of both. The invention resided in a machine for picking vegetables, being a conveyor arrangement mounted laterally on a trailer. One person had a general idea of what was required to solve the problems of tilting of the conveyor boom and providing different heights for different crops. However, that person did not necessarily know how to give effect to those ideas. The creation of the invention required the input of the other person.

The Re Applications by CSIRO and Gilbert (1995) 31 IPR 67 decision stated the key issue in that case was not one of inventiveness but of entitlement. The rights in an invention do not flow from an assessment of the inventiveness of respective contributions but rather from an objective assessment of the contribution simpliciter to the invention. The decision held that a consequence of collaboration between parties is that entitlements to any inventions, associated with the collaboration, are shared between the parties.

The Falkenhagen v Polemate Pty Ltd (AIPO, application No 84712/91, 16 June 1995, unreported) decision stated that a second person, engaged because of that person's expertise to construct a device based on instructions from or given the concept of a first person, is not normally regarded as an inventor of the device. This holds true even if the second person suggests ways to aid its design or operation. However, if the second person's suggestions give a result or advantage not contemplated by the original concept then the second person may qualify as a joint inventor of the improved device. The result or advantage would need to be a material one so that the resulting device is an improved one not merely a preferred workable embodiment of the original concept.

The common theme from the above decisions is that a person has entitlement to an invention if that person's contribution, either solely or jointly with others, had a material effect on the final concept of the invention. A secondary issue is whether that person's contribution involved a key inventive step.

71 In conclusion, the Delegate stated:

A person need not necessarily make the key inventive step to be classified an inventor. Primarily, if the final concept of the invention would not have come about without that person's involvement then that person has entitlement to the invention. The inventiveness of a person's contribution is the secondary issue.

72 Both of these decisions were also considered in Polwood: see [52].

73 In Wake v Cavitus Pty Ltd (2010) 88 IPR 169; [2010] APO 11, the Delegate of the Commissioner of Patents, O L Haggar, followed what had been said in Polwood v Foxworth and University of Western Australia v Gray. The Delegate observed:

[53] The law on inventorship was most recently discussed in University of Western Australia v Gray (2009) 179 FCR 346; 259 ALR 224; 82 IPR 206; [2009] FCAFC 116 (UWA) and Polwood Pty Ltd v Foxworth Pty Ltd (2008) 165 FCR 527; 244 ALR 626; 75 IPR 1; [2008] FCAFC 9 (Polwood). The Full Court in Polwood considered a number of authorities in other jurisdictions which were observed to draw a distinction between the conception of an invention and its verification or implementation (called "reduction to practice" under US patent law).

[54] In Gunter v Stream (1978) 573 F 2d 77 the "conception" of the invention was described as the complete performance of the mental part of the inventive act. That is to say, the invention is the "formation in the mind of the inventor of a definite and permanent idea of the complete ad operative invention, as it is thereafter to be applied in practice". A concept can be complete although experimentation may continue. In Polwood (at [46]), the Full Court referred to Mueller Brass Co v Reading Industries Inc (1972) 352 F Supp 1357 (Mueller) for the proposition that inventorship is a role in the final conception of that which is sought to be patented:

It is clear that, in working out the inventive concept in a patent, each patent will be different and it will be necessary to ascertain the inventive concept from the whole of the specification. Contribution after the invention was fully conceived where that contribution was under the direction of the inventor does not give rise to entitlement to the invention. A person must be able to say that without his or her contribution to the final conception it would have been less.

[55] The reference in Mueller to "the final conception" does not mean that a co-inventor need necessarily devise the final form of the invention. As noted in Monsanto Co v Kemp 154 USPQ 259, a co-inventor's role could occur at any stage in the development of the invention. Thus, for example, where one person makes an initial step leading toward the invention and their work is taken up and finalised by another, both may be considered to have jointly contributed to the invention.

[56] There has also been some consideration of the principles of joint inventorship in Australia. In Row Weeder Pty Ltd v Nielsen (1997) 39 IPR 400 (Row Weeder), joint inventorship was said to arise where one person has a general idea for solving a problem but is unable to give effect to the idea while another person is able to do so. The delegate concluded in Row Weeder (at 405) that a person has entitlement to an invention if that person's contribution, either solely or jointly with others, had a material effect on the final concept of the invention.

[57] The same point was made in Mueller at 372:

... it is reasonably clear that a person who has merely followed instructions of another in performing experiments is not a co-inventor of the object to which those experiments are directed. To claim inventorship is to claim at least some role in the final conception of that which is sought to be patented. Perhaps one need not be able to point to a specific component as one's sole idea, but one must be able to say that without his contribution to the final conception, it would have been ... less something of benefit.

[58] This was reinforced in Falkenhagen v Polemate Pty Ltd [1995] APO 32 (Falkenhagen) [see above in Row Weeder]

[59] Although not referring to the distinction drawn in other jurisdictions between inventorship based on conception and verification or implementation, the delegate in Falkenhagen did differentiate between the involvement of a person in the final concept of the invention as opposed to a preferred working embodiment of it.

[60] The Full Court in UWA did not depart from the above principles, and in fact reaffirmed (at [248]) that the law in Australia in respect to inventorship:

[248] ... remains that a putative inventor or putative joint inventor must have made a material contribution to the invention. What [Polwood] illustrates is that the reduction

to practice of an inventive concept may or may not require an invention or inventive step. If not, reduction to practice does not demonstrate inventorship.

74 In Minnesota Mining and Manufacturing Company v Beiersdorf (Australia) Limited (1980) 144 CLR 253, Aickin J observed at 293 in relation to an alleged lack of an inventive step that "the opening of a safe is easy when the combination has already been provided".

75 Another useful observation is that of Dowsett J in Firebelt Pty Ltd v Brambles Australia Pty Ltd (1998) 43 IPR 83 at 113:

To describe oneself as an inventor is merely to say something about one's capacity to identify and solve a problem. The line between a competent technician, able to solve problems on the basis of an established state of knowledge in his or her industry and an inventor will not always be easily discerned. Further, a person who is an inventor may well also perform non-inventive work.

76 That comment was approved by the High Court in Firebelt Pty Ltd v Brambles Australia (2002) 188 ALR 280 at [44].

Comparison between the provisional and PCT applications

77 It is clear that there is no question directly before the Court as to whether the PCT application is entitled to claim the priority date of the provisional application. A consideration of whether the provisional application provides a fair basis for the PCT application (the previous requirement) or "clearly discloses" the invention in a manner that is clear enough, and complete enough, for the invention to be performed by a person skilled in the relevant art (the new statutory requirement as a result of the Intellectual Property Laws Amendment (Raising the Bar) Act 2012) is not strictly necessary. Nevertheless, in my view, such a consideration does assist me in forming a view as to whether the plaintiff did make a material contribution to the invention the subject of the PCT application. If the PCT application cannot be said to be fairly based on, or reasonably disclosed by, the provisional application, that might suggest that the plaintiff did make such a contribution. However more importantly as I have already said it is crucial to analyse previously what steps the plaintiff took.

78 In CCOM Pty Ltd v Jiejing Pty Ltd (1994) 122 ALR 417, the Full Federal Court (comprising Spender, Gummow and Heerey JJ) considered whether a claim was fairly based on a provisional specification. Their Honours observed at 432:

The term "fairly based" was introduced into Australian patent law by ss 40 and 45 of the 1952 Act. It was used to describe the relationship between the claims defining the invention and the matter described in the complete specification (s 40(2)), and as a criterion for fixing the priority date of a claim of a complete specification fairly based on matter disclosed in the preceding provisional specification (s 45(2) and (3)). Other uses of the term in the 1952 Act, as amended (for example, with international applications) are detailed in Rehm Pty Ltd v Websters Security Systems (International) Pty Ltd (1988) 81 ALR 79 at 94. Section 159(1) of the 1952 Act made it clear that disconformity on the ground that the invention claimed was wider than that of the specification was not of itself a ground of objection to grant or of invalidity: see Coopers Animal Health Australia Ltd v Western Stock Distributors Pty Ltd (1987) 15 FCR 382 at 388; 76 ALR 429, per Fox J. This serves to emphasise the width and significance of the ground now covered by what in 1952 was the new concept of "fair basing".

As we have indicated, the phrase "fairly based" is carried over into the 1990 Act. In particular, claims must be fairly based on matter described in the specification (s 40(3)), and the priority date of a claim may be determined as the date of making the "relevant application" in which the matter was first disclosed, if the claim is fairly based on that matter: reg 3.12.

79 At 436, their Honours continued:

In answering that question [of what is required to be fair being not the broader sense of the applicant's conduct but the basis which one document affords for a claim in the other], Buckley LJ [in Stauffer Chemical Co's Application [1977] RPC 33] eschewed an over meticulous verbal analysis. That this is so is apparent from the following passage ([1977] RPC at 54):

If a new feature were a development along the same line of thought which constitutes or underlies the invention described in the earlier document, it might be that that development could properly be regarded as fairly based on the matter disclosed in the earlier document, and that the new process described in the later document which incorporates that development could as a whole be regarded as fairly based upon the matter disclosed in the earlier document. If, on the other hand, the additional feature involves a new inventive step or brings something new into the combination which represents a departure from the idea of the invention described in the earlier document, it could not, I think, be properly described as fairly based upon the earlier document.

This judgment was approved by Fox J and Spender J in Coopers Animal Health Australia Ltd v Western Stock Distributors Pty Ltd at FCR 385, 389, 401 ; ALR 433, 436, 448. ; Fox J (at FCR 389; ALR 436) added:

Where the holder of the provisional specification proceeds with a complete specification with a view to the grant of a patent, it is recognised that greater definition, as a result of further experimentation or otherwise, may be achieved before the later step is taken and the result expressed therein. Some generality of expression in the provisional specification is accepted.

80 However, it is not in dispute that the Raising the Bar provisions govern the PCT application: see Walsh expert report at CB4/1302.

81 There is certainly some force to the defendants' submission that the plaintiffs impermissibly resort to textual comparisons between the two applications. Nevertheless, at a minimum such a comparison does have some utility, arguably, in assessing the credibility of Mr Walsh.

Misuse of confidential information

82 The plaintiff seeks to establish that the defendants misused his confidential information and relies on the decision in Del Casale and Ors v Artedomus (Aust) Pty Ltd [2007] NSWCA 172; (2007) 73 IPR 326. In that case, Campbell JA set out the principles relating to an equitable obligation of confidence. His Honour observed at [101]-[107]:

[101] It is now established that, for an equitable obligation of confidence,

"its rational basis does not lie in proprietary right. It lies in the notion of an obligation of conscience arising from the circumstances in or through which the information was communicated or obtained": Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 156 CLR 414 at 438 per Deane J, with whom Gibbs CJ, Mason, Wilson and Dawson JJ agreed.

[102] The conditions for the existence of an equitable obligation of confidence, independently of contract, were identified by Megarry J in Coco v A N Clark (Engineers) Ltd [1969] RPC 41 at 47:

"First, the information itself ... must "have the necessary quality of confidence about it." Secondly, that information must have been imparted in circumstances importing an obligation of confidence. Thirdly, there must be an unauthorised use of that information to the detriment of the party communicating it."

[103] On Megarry J's account, the information is "of a confidential nature" if it is not "public property and public knowledge", or if it is "constructed solely from materials in the public domain", to which "the skill and ingenuity of the human brain" has been applied (47). This is a fairly undemanding test.

[104] Concerning the requirement that "the information must have been communicated in circumstances importing an obligation of confidence", Megarry J says, at 47-48:

"However secret and confidential the information, there can be no binding obligation of confidence if that information is blurted out in public or is communicated in other circumstances which negative any duty of holding it confidential. From the authorities cited to me, I have not been able to derive any very precise idea of what test is to be applied in determining whether the circumstances import an obligation of confidence. ... It may be that that hard-worked creature, the reasonable man, may be pressed into service once more; for I do not see why he should not labour in equity as well as at law. It seems to me that if the circumstances are such that any reasonable man standing in the shoes of the recipient of the information would have realised that upon reasonable grounds the information was being given to him in confidence, then this should suffice to impose upon him the equitable obligation of confidence. In particular, where information of commercial or industrial value is given on a business-like basis and with some avowed common object in mind, such as a joint-venture or the manufacture of articles by one party or the other, I would regard the recipient as carrying a heavy burden if he seeks to repel the contention that he was bound by an obligation of confidence ... I doubt whether equity would intervene unless the circumstances are of sufficient gravity; equity ought not be invoked merely to protect trivial tittle-tattle, however confidential."

[105] This account has been adopted in Australia: The Commonwealth v John Fairfax and Sons Ltd (1980) 147 CLR 39 at 51 (Mason J as a single judge of the High Court); Half Court Tennis Pty Ltd v Seymour (1980) 53 FLR 240 at 255 (Dunn J); O'Brien v Komesaroff (1982) 150 CLR 310 at 326 per Mason J (with whom Murphy, Aickin, Wilson and Brennan JJ agreed); Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 14 FCR 434 at 443 (Gummow J); Smith Kline & French Laboratories (Aust) Ltd v Department of Community Services and Health (1990) 22 FCR 73 at 86-87 (Gummow J). That adoption might be subject to a question about whether detriment is an element of the cause of action (Smith Kline & French at 111-112; NP Generations Pty Ltd v Feneley (2001) 80 SASR 151 at 157-158; [2001] SASC 185 at [21]), but no question arises in the present case that depends on whether detriment is indeed an element of the cause of action.

[106] There is also a partial adoption of such a test in Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 156 CLR 414 where Deane J, at 438, identified two necessary conditions for the grant of relief concerning an equitable obligation of confidence:

"Relief under the jurisdiction is not available, however, unless it appears that the information in question has "the necessary quality of confidence about it" (per Lord Greene MR, Saltman [Saltman Engineering Co Ltd v Campbell Engineering Co. Ltd] (1947) 65 RPC 203, at p. 215) and that it is significant, not necessarily in the sense of commercially valuable (see Argyll v Argyll [1967] Ch 302, at p. 329) but in the sense that the preservation of its confidentiality or secrecy is of substantial concern to the plaintiff."

He did not, however, purport to list the sufficient conditions for grant of relief.

[107] The cases provide examples of such a principle being applied to novel fact situations. In National Education Advancement Programs (NEAP) Pty Ltd v Ashton (1995) 128 FLR 334 at 344, Young J said, concerning a trial examination paper:

"... if a person was given a document which on the face of it screamed out that it was confidential, that the document would come into the category of one where the recipient would be deemed to have known that the information was confidential."

83 The defendants submit that the first and second odds spreadsheets are largely based on information in the public domain, and that the burden of establishing the confidential nature of the information provided by Mr Kafataris is therefore heavier.

84 They submit that a document based on publicly available materials will be protected by the duty of confidence only where it is the product of "skill, effort and value, or of time, effort and money" (Bates & Partners Pty Ltd v Law Book Co Ltd (1994) 29 IPR 11 at 16 per Santow J), creates a "new solution to a problem" (Krueger Transport Equipment Pty Ltd v Glen Cameron Storage & Distribution Pty Ltd (2008) 78 IPR 262 at 283 per Gordon J) or "has been the result of the expenditure of considerable money, skill and ingenuity" (RLA Polymers Pty Ltd v Nexus Adhesives Pty Ltd (2011) 280 ALR 125 at 139). Where a document is "no more than the application of ordinary common sense", it will be outside the category of information which a Court would protect: Independent Management Resources Pty Ltd v Brown (1986) 9 IPR 1 at 7 per Marks J.

Witnesses and other matters

85 As will appear later in my judgment, a number of credit issues arose for determination.

86 Generally speaking a trial judge is in no way restricted in his or her assessment of a witness; he or she is not bound to accept any of that which the witness attests to or indeed may only accept part thereof: Cubillo v Commonwealth of Australia [2000] FCA 1084; (2000) 174 ALR 97 at [118]- [123].

87 The court is not obliged to accept evidence, even in the absence of cross-examination. In Ali v Nationwide News Pty Ltd [2008] NSWCA 183, Tobias and McColl JJA observed at [112]:

There can be no doubt that where factual evidence is not cross-examined upon, prima facie it should be accepted. However, it ought not necessarily be accepted where, as Tobias JA said in Multiplex, there is a credible body of evidence of a substantial character in direct contradiction of the non cross-examined evidence.

88 In any case involving oral representations, it is important always in my view to keep in mind the observations of McLelland CJ in Equity in Watson v Foxman (1995) 49 NSWLR 315 at 318-319:

Where, in civil proceedings, a party alleges that the conduct of another was misleading or deceptive, or likely to mislead or deceive (which I will compendiously described as "misleading") within the meaning of s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), it is ordinarily necessary for that party to prove to the reasonable satisfaction of the court: (1) what the alleged conduct was; and (2) circumstances which rendered the conduct misleading. Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.

...

Considerations of the above kinds can pose serious difficulties of proof for a party relying upon spoken words as the foundation of a causes of action based on s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), in the absence of some reliable contemporaneous record or other satisfactory corroboration.

...

What I have said above as to the cause of action based on s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act) is equally applicable, mutatis mutandis, to the causes of action based on contract and on equitable estoppel (with the added requirements, in the case of contract that any consensus reached was capable of forming a binding contract and was intended by the parties to be legally binding, and in the case of equitable estoppel that any representation alleged was clear and unequivocal and was relied on to the substantial detriment of the representee).

89 Although, of course, in the present case the claims in contract, estoppel and misleading and deceptive conduct were abandoned, those observations are relevant to any assessment of a witness giving evidence about their recollection in the absence of contemporaneous documents.

90 I was also invited to infer that, given the importance of the evidence of Mr Thomas to the present case, any evidence on the topic of his instructions to Mr Walsh would not have assisted him. In Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418-419, Handley JA observed:

In my opinion the Court should not draw inferences favourable to the insured on these matters when no attempt was made to prove them by direct evidence and in particular when no relevant questions were asked of Mr Ferrarese. Rather it seems appropriate to apply the principles of Jones v

Dunkel (1959) 101 CLR 298.

There appears to be no Australian authority which extends the principles of Jones v Dunkel to a case where a party fails to ask questions of a witness in chief. However I can see no reason why those principles should not apply when a party by failing to examine a witness in chief on some topic, indicates "as the most natural inference that the party fears to do so". This fear is then

"some evidence" that such examination in chief "would have exposed facts unfavourable to the party": see Jones v Dunkel (at 320-321) per Windeyer J. Moreover in Ex parte Harper; Re Rosenfield [1964-5] NSWR 58 at 62, Asprey J, citing Marks v Thompson 1 NYS 2d 215 (1937) at 218, held that inferences could not be drawn in favour of a party that called a witness who could have given direct evidence when that party refrained from asking the crucial questions.

...

In my opinion the trial judge fell into error in drawing the inference that the endorsement would not have been acceptable to the insured. Counsel for the insured did not ask Mr Ferrarese about this matter either in chief or in reply and did not cross-examine Mr Green on the matter either. Moreover the insured did not call any representative of the broker to establish what view the broker would have taken and what advice it would have given Mr Ferrarese. In these circumstances I do not consider that inferences should be drawn favourable to a party whose counsel refrained from asking any question on this topic. Again it appears to me that the principles earlier referred to derived from Jones v Dunkel and the decision of the Appellate Division of the Supreme Court of New York in Milliman v Rochester Ry Co are applicable, and indeed the proper inference is to the opposite effect of that drawn by the trial judge.

Baccarat and blackjack

91 The case to a large extent turned on the manner on which both the game of baccarat and blackjack are played. This was important for a number of reasons, but primarily for the purpose of assisting the Court to understand the precise nature of the invention and the opportunity for the placement of a supplementary bet.

92 Clearly the perceived attractiveness of the supplementary betting option in either game is that it can be placed by a third party who has not previously placed a bet, in addition to forming an additional opportunity for players who have previously placed a bet.

93 Therefore it is necessary to set out briefly the rules of each game. However, it should be noted that the rules of course vary from venue to venue. The rules set out below are not intended to be exhaustive but rather to identify the circumstances in which the supplementary betting option may take place.

Baccarat

94 The version of baccarat that is relevant to these proceedings is referred to as punto banco.

95 Baccarat is a game involving comparing two hands. One is referred to as the "player" and one is referred to as the "banker". However, participants are not dealt a hand themselves but merely bet on whether the player wins, the banker wins or there is a tie.

96 If there is a tie, participants who bet on a tie receive a large dividend while those betting on either player or banker either receive their bets back or they remain on the table for the next round (depending on the rules of the venue in which the game is played).

97 Once bets are placed, each hand is dealt two cards from a standard deck. Those cards have a point value, which is calculated in the following manner. Tens, jacks, queens and kings have a zero point value. Aces have a point value of one. All other cards have their face value. The value of the two cards is added together and the rightmost numeral of the total is the score. For example, if the banker receives a six and a seven, their sum is thirteen (13) and therefore the score of that hand is three. If the player obtains a queen and a seven, the total is seven.

98 If either the player hand or the banker hand has a total of eight or nine (being the highest possible score), then participants who initially bet on that outcome receive a dividend. All other participants forfeit their bet.

99 If neither hand obtains an eight or a nine (which is the highest possible score), a third card may be drawn for one or both hands.

100 For the player hand, a third card is drawn if the player total is five or less. The third card is added to the total of the player hand using the same rules as above.

101 For the banker hand, more complex rules apply for whether a third card is drawn. It is not necessary to set those rules out, but it is critical to note that at no point does either the banker or the player make any decision as to whether to draw any additional cards. The rules of the game prescribe whether either the player hand or the banker hand is entitled to a third card. If so entitled, the third card is added to the total of the banker hand using the same rules as above.

102 Therefore, once a third card is drawn for one or both hands, it is once again possible to determine whether the outcome is a win for the player hand, a win for the banker hand or a tie. As above, dividends are distributed according to the initial bet.

103 The supplementary betting opportunity adds an extra element to the rules described previously. It only applies when there is a requirement for a third card for one or both hands. At that point, certain information is available to any participant (namely, the four cards consisting of the two cards dealt to the player hand and the two cards dealt to the banker hand). However, whether a third card is drawn is prescribed by the rules of punto banco baccarat.

104 The supplementary betting opportunity allows both participants and third parties (i.e. persons who did not place an initial bet before the cards were dealt) to place a bet, at certain odds that are not static but depend on the cards already revealed, on what the outcome of the game will be. It is anticipated that those odds would be displayed on a screen to enable participants to decide whether to take the supplementary betting opportunity.

Blackjack

105 Blackjack is a game with many possible variants. Therefore, the rules I set out below are merely a guide and may be altered depending on the venue in which the game is played. I set them out merely to demonstrate the point at which a supplementary betting opportunity has been identified by one or more of the parties to these proceedings.

106 Blackjack involves the comparison of one's own cards against the cards of the dealer. Multiple participants can play simultaneously, but they do not compete against one another. The object of the game is to reach a final score which is higher than that of the dealer without having a total score of more than twenty one.

107 Once a bet is placed in favour of the player, the player receives two cards. Kings, queens and jacks are counted as ten points. Aces may be one or eleven depending on the election of the player. Other cards have their face value.

108 Players have the option of taking another card and adding it to their total. They are not required to take a card and can exercise their own judgment. For example, a player with a jack and a five has a total of 15. They may take the risk that the third card they will receive will be higher than a six, which would give them a total of twenty-two. A total greater than twenty-one results in the player "busting" or "breaking", and therefore forfeiting their bet.

109 Additional cards can be taken until the player is satisfied with their total (described as "standing") or has gone bust. There is no requirement to take any additional cards to the two initially provided.

110 The dealer, however, also has two cards. Often one of those two cards is dealt face up so all players are at least partially aware of the dealer's position. In some cases, the dealer is required to offer optional insurance to players if an ace is turned up. This is because if the other card is a ten (giving a point value of 21 called a 'blackjack') the dealer will automatically win.

111 Importantly, whether or not the dealer is required to take additional cards is prescribed by the rules of the game. Generally, a dealer is required to take a card until their total is 17 or more. Therefore, if the dealer has a queen and a six, giving a total of 16, there is a requirement to take an additional card (even though drawing a card which is a six or higher will result in the dealer going bust). Often, but not always, there is also a set rule as to the value of an ace, in contrast to the player who has discretion as to whether it carries one or eleven points.

112 There are additional rules (such as splitting hands which contain a pair into two separate hands, or doubling down) but it is not necessary to set those out in detail.

113 In blackjack, the supplementary betting option is not available on the outcome of the game, as was the case for baccarat. That is because in blackjack the player could place a large bet on the dealer winning and then choose to simply draw additional cards until they go bust. The bet is placed, not on the outcome of the game itself, but on whether the dealer will go bust. This point was heavily relied on by counsel for the plaintiff to draw a distinction between the two games.

114 In the PCT application at [0060], it is suggested that each player is dealt an initial hand of two cards visible to the people playing on it, and often to any other players. Later in the same paragraph it is suggested that the players' initial cards may be dealt face-up or face-down.

115 The blackjack dealer bet rules provided to Mr Walsh on 18 March and Mr Davis on 20 March (Exhibit P2, Tab 20) suggest that the wager is placed on whether the dealer will bust or not at the point when only the dealer's card is visible. The odds at page 103 are only calculated in relation to that face-up card. That would seem to suggest that it is only feasible to place a supplementary bet when the player cards are face down.

116 It would seem to follow that that the side bet is available at an early point in the game, rather than being available only once the dealer is required by the rules of the game to draw an additional card or cards.

The Witnesses

Mr Kafataris

117 Mr Kafataris has over 37 years' experience in wagering and gaming including online markets. He also operated as an on course bookmaker in the horse racing industry for over 35 years until 2010.

118 On any view he has been successful in innovating and launching online wagering businesses in Australia, the UK, Spain and Greece.

119 He has also been involved in other diverse activities such as a company called Video on Demand which supplied movie content and internet connectivity to hotels, hospitals and mining sites. He has been a successful property developer.

120 He has had experience on many boards including private and publicly listed companies.

121 How much of his background and obvious expertise he actually applied to his contribution to the invention is however problematical. He was not very precise in describing in any real detail what he had done especially in devising various odds; perhaps for good reason. Nor was it clear exactly what he did in relation to his consideration of the game of blackjack. For example he obviously had to consider the rules of the game but he does not expressly say what he in fact did.

122 I regarded Mr Kafataris as largely a truthful witness, however I consider he exaggerated the extent of his analyses, especially on odds. Nonetheless it is accepted by the defendants that from about December 2012 he raised in discussion with Mr Thomas and others on a number of occasions the question of a possible supplementary betting option within the existing rules of blackjack, and calculating odds on various outcomes.

123 He of course did not conceptualise in any respect the idea of a supplementary betting option, and his activities as explained in detail later were entirely devoted, it seems to me, to identifying whether and if so when a supplementary bet could be placed within the existing rules of blackjack.

Mr Thomas

124 Mr Thomas was a rather unsatisfactory witness. He was more than a little reluctant understandably in confronting his somewhat shabby past.

125 That said it was simply not disputed that Mr Thomas had come up with the idea of a supplementary or subsidiary betting option in the game of baccarat. Indeed the case put against him was that this notion was the only idea he ever came up with.

126 For reasons which will emerge, I am unable to accept he ever thought a supplementary bet was available in any other card game prior to Mr Kafataris raising it. I do not accept his evidence to the contrary. I regard his assertion that he intended prior to the filing of the provisional application that a person could make such a bet in all table card games as opportunistic and untruthful.

Mr Walsh

127 I also regard Mr Walsh as a somewhat unsatisfactory witness. He was fulfilling the role of a lay and expert witness. This placed him in a difficult position.

128 On occasions I thought his evidence was contrived and he far too frequently avoided directly answering questions. Rather he put forward answers as if merely advocating a particular position or stance.

129 I consider that on occasions he was concerned, however untenable his position might appear to be, to advance propositions which were objectively untenable.

130 I do however accept that in early 2012 he considered the supplementary betting option was the true invention, or the crux of it, as opposed to the card game baccarat, but his inability to accept he had not perhaps fully captured that notion in the provisional application was unconvincing and somewhat disingenuous.

Mr Davis

131 Mr Davis was unable to make in my view any meaningful contribution to the resolution of any of the relevant issues. He had never even read the provisional application (T149/12) and just assumed that the PCT application was for one and the same thing as the provisional application (T150/24). He agreed that his understanding of the invention was based on a series of assumptions made about which he had no direct knowledge (T150/45).

132 Clearly the utility of the evidence of Mr Davis, if any, was impacted by the reduction in the plaintiff's case at the commencement of the hearing. The defendant submits that the cross-examination demonstrated that both Mr Walsh and Mr Thomas had consistently advised Mr Davis that the scope of the invention is as contended for by the defendants, and that his evidence should be accepted (final submissions of the defendant at [15]). I do not agree. I am not satisfied that Mr Davis provided any relevant evidence that would assist me in resolving the disputes between the parties.

The activities of Mr Walsh and Mr Thomas prior to the filing of the provisional application

Mr Thomas

133 It is not in issue that from about 2010 Mr Thomas started giving consideration to an idea for a supplementary betting option which could be exploited at least in baccarat. He coined the term "double up" at some time prior to April 2012.

134 It was put in effect to Mr Thomas that the only card game which he ever had in mind at least prior to the provisional application being lodged in April 2012 was baccarat. He denied that and asserted that at all points in time, indeed from the very moment he commenced thinking about his idea and concept, he believed that his invention could be applied to "all casino table card games".

135 There is however little doubt that if one considers any contemporaneous documentation prepared by him, either prior to April 2012 or immediately following the filing of the provisional application, it clearly indicates that baccarat was the only card game that he specifically had in mind and in respect of which he devoted seemingly the entirety of his efforts. In a handwritten document headed "examples" which was a document created by him together with some tables of odds it is plainly apparent that baccarat was all he had in mind (Ex P2, Tab 1).

136 At some point in 2011 Mr Thomas asked Mr Davis to assist him in obtaining a patent and as a result Mr John Walsh, a patent attorney was retained in or about February 2012.

137 Mr Thomas, realising no doubt the limitations in his own attempts to calculate odds, approached a mathematician to create a set of odds that might ultimately be shown to a casino as part of a marketing exercise.

138 A Dr Müller from the University of Sydney was retained and he provided some odds in relation to baccarat and was paid accordingly. Mr Thomas asserts and he was not challenged that he found errors in what Dr Müller had done. Dr Müller prepared an amended set of calculations which Mr Thomas believed were correct. In the end nothing turns on Dr Müller's involvement in the case, but his work was limited to baccarat.

139 Mr Thomas somewhat oddly on one view gave no evidence about his early discussions with Mr Walsh. However Mr Walsh in his evidence accepted that he first met Mr Thomas and Mr Davis on 14 February 2102. He has a diary note evidencing some parts of that meeting (Ex P2, Tab 2).

140 Mr Walsh to whose evidence I shall need to return in greater detail asserted in his affidavit that Mr Thomas had told him either at this meeting but certainly before April 2012 that he invented a supplementary betting option that could be applied to casino card games, such as baccarat. There is no evidence however that Mr Thomas gave any examples but for baccarat.

141 As I have said, Mr Thomas asserted that he gave consideration even prior to the filing of the provisional application in April 2012 to other card games. I do not accept that evidence as either accurate or truthful. I am not satisfied that any card game other than baccarat passed through his head at that time.

142 I regard his opinion in [6] of his affidavit of 4 July 2014 that the supplementary betting system can be applied to "all casino table card games" as at best speculative and at worst a contrivance. It can obviously apply to baccarat and blackjack, but Mr Thomas was conspicuously incapable of pointing to other card games to which it might be applied, and he never did, prior to the involvement of Mr Kafataris, identify when it would be available for blackjack.

143 Likewise, I do not accept his evidence that he intended it to apply to all table card games, as he asserted at [7] of his affidavit. If he did intend that I would have expected to find some contemporaneous support, but there is none. When given ample opportunity in cross examination he was entirely inept at explaining his views as set out in those paragraphs [6] and [7]. He was simply incapable of giving any comprehensible explanation as to what card games he had in mind in relation to a supplementary betting option. He nominated poker but again could not explain how a supplementary betting option could be exploited in that game (T74/25-T76/25).

144 I do not consider Mr Thomas ever held the view, prior to Mr Kafataris raising the possibility in relation to blackjack, that it could be applied in that context. There is no evidence for example he had worked through the rules of any game other than baccarat and I consider it is inconceivable, absent some special expertise which he clearly did not possess, that he would have been able to make such a statement that the option was available for "all casino table card games" unless he was being boastful or simply dishonest.

145 There is no doubt it was Mr Kafataris who raised blackjack with Mr Thomas, for example on 19 December 2012, but again I simply do not accept Mr Thomas responded in the manner he asserts in [45] and [48] of his affidavit because his knowledge in my view could never have allowed him to have expressed those views at that time.

146 His efforts, although perhaps laboured and spread over a significant period of time, were in reality in my view confined to baccarat.

Mr Walsh

147 Mr Walsh gave both factual and expert evidence. He purported to give evidence that he had from soon after he met with Mr Thomas in early 2012 discussed the possibility of the invention (which he identified as the auxiliary or secondary betting option) in the context of baccarat and other card games. I do not accept the latter part of this evidence. I will return to this.

148 Although he purported to give evidence of conversations with Mr Thomas to that effect and although whenever tested on the topic was resistant to any suggestion that such matters had not been raised as I have said I simply cannot accept his evidence. He has no contemporaneous notes supporting his assertion Mr Thomas said such things about games other than baccarat in 2012. I consider Mr Wash has convinced himself such things were said even in the absence of any note to that effect. Unsurprisingly he wants to see the best outcome for his clients and I consider he has reconstructed his evidence with that aim firmly in mind.

149 I am fortified in the view that baccarat was the only card game discussed between Mr Walsh and Mr Thomas in early 2012 for several reasons. First as I have already indicated Mr Walsh had no note to the contrary. Secondly Mr Thomas has no contemporaneous note of course which suggests that he in fact raised other card games other than baccarat. All of the documentation he provided Mr Walsh, including descriptions of how the game would be played in the context of the secondary betting option, point only to baccarat, and the terms of the provisional application make it abundantly clear to me that only baccarat was the subject of any consideration.

150 That said however, I do accept Mr Walsh's evidence that he identified in his mind the invention as one relating to a regime of wagering or the secondary betting option for a player playing baccarat. I also accept his evidence that he did not see the invention as simply baccarat as it were with a twist. He said in effect on a number of occasions that the invention was the method of wagering, although the terminology he chose in the provisional application was not always consistent.

151 Mr Walsh remained unshaken as to his view of the invention throughout cross-examination. He described the inventive step as "related to an auxiliary or secondary bet option for a player of [any] card game" (T157/29-T157/43); the invention as "a method of wagering according to a certain number of steps" (T157/47); he agreed it was his professional opinion that the Double Up invention as described in the provisional application is a betting regime that can be applied to all card games (T164/38); that "there was a proposal for an auxiliary betting regime with reference to an example, and one example was baccarat" (T164/45) and that "the invention was not a card game" but rather "an auxiliary betting regime" (T164/50-T165/2); he rejected the statement that the method of wagering was not the invention (T167/23); he claimed that "this invention is not about a game per se [but] about a wagering system" (T170/19); that "the inventor [sic] step here relates to the method of wagering" and that "the game aspect is something on which the invention can be applied as opposed to the invention itself..." (T173/47-T174/1); that Mr Walsh was "instructed by the inventor that he invented a wagering system that applied to all card games and his preferred method was Baccarat" (T177/19) and that he was "told the invention was the supplementary betting option" (T177/38); "baccarat is a preferred embodiment of the wagering invention" (T183/43); that he understood the crux of the invention to be "a method of wagering on a card game" (T190/14-T190/20; T197/15); and that "the provision [sic] was intended to cover card games generally, and Blackjack is another example of a card game to which the wagering system can apply" (T240/1).

152 I am satisfied in drafting the provisional application he approached it as an ambit claim (T193/4) and, as far as he could imagine it and based on his instructions, Mr Walsh used general terminology so as to allow his clients latitude to argue ultimately that any additional innovation that might be included in the PCT application could be said to be fairly based or otherwise on the provisional application. That said, I am satisfied he had no other specific examples in his head other than baccarat.

153 Under the heading "Background" in the provisional application he twice used the plural in describing the invention as relating to "games of chance". In his evidence however he placed little reliance on that section of the provisional application to support his contentions.

154 He contended that baccarat was used at the time of drafting the provisional application to simply refer to the preferred embodiment. The reality is that it was the only embodiment in which a secondary or auxiliary betting opportunity was identified. However as I have said I do accept his contention otherwise that the invention as he saw it albeit limited to baccarat in the provisional application was for a supplementary betting option.

155 It was suggested by the plaintiff and with some justification that Mr Walsh was an unsatisfactory witness. I consider he was on occasions somewhat evasive and acted more as an advocate. In saying that of course I recognise that he was attempting to fulfil a dual role namely the witness of fact and expert which only underlines the exquisite complexity in any witness, however intelligent, attempting to discharge such dual obligations. In fairness to Mr Walsh, I should note his expert evidence was not objected to on any basis.

156 Mr Walsh's assertion that the provisional application was expressly intended to include blackjack is simply fanciful. I do not consider the language can support that. He had no particular expertise in card games himself and his client Mr Thomas was exclusively focussed on baccarat to the exclusion of anything else. In the circumstances, and given his instructions, he had no basis whatsoever for imagining that the invention as a matter of practical reality could at that time apply to any other card game. That however does not, as is clear from the PCT application, affect the very nature of the novelty identified. There is nothing new about baccarat or blackjack, but what was new was the supplementary betting option and I consider he did have that firmly in his mind at all times. That was the invention he was purporting to describe.

157 I consider the reason he remained so devout in his assertion that other card games had been discussed prior to the filing of the provisional application is a combination of his belief that they would have been, readying himself as it were for the argument with IP Australia that blackjack ought to have the same priority date as baccarat and in addition perhaps the knowledge that his client Mr Thomas had insisted in his evidence that the invention was applicable to other unspecified card games. Insofar as Mr Walsh asserted that he and Mr Thomas had discussed other card games as I have said I do not accept that evidence. I am of the view that Mr Walsh is mistaken in his recollection in that regard. He has unwittingly compressed a whole series of events and is now firmly but mistakenly of the view other card games were discussed at an early point in time.

158 He had to accept in cross-examination that there is terminology to be found in the PCT application which first did not appear in the provisional application and secondly would not have appeared were it not for the work undertaken by Mr Kafataris.

159 Mr Walsh contended for example that although the words "methods of wagering" did not appear as such in the provisional application that was nonetheless indeed the crux of the invention. He asserted that claim 27 in the PCT application which articulates the method of wagering should be seen as fairly based on the provisional application. Having accepted that he intended the invention to be and be seen as the supplementary betting option I consider that to be correct but that particular terminology simply is not there. Of course one would always expect much greater detail and precision in the PCT application for at least two reasons. First, the concept would generally be much further advanced, and secondly the process requires the articulation of quite precise claims so as to describe the alleged invention in detail.

160 I accept that in the provisional application, under the heading "Background" it seems to me arguable from the language it was intended to leave open the possibility that the patent may have a wider application than merely baccarat, purely in a theoretical sense. In my view that is plainly apparent from the terminology used in the first two paragraphs under that heading. The references to "games of chance" is one example. The use of the term "more particularly" in the second paragraph under the heading "background" is another. It is also clear that what is being described is a "game feature" where a person can play a primary game and exercise bet options on a secondary or ancillary game either separate from the primary game or in co-operation with the primary game. That is stated in terms. This is certainly what I consider Mr Walsh thought was the crux of the invention. The description of a secondary or auxiliary game just referred to are in my view importantly repeated under the heading "Invention" later in the provisional application.

161 Also under that latter heading, although there is language which arguably points solely to baccarat, there is a statement referring to the "present invention" providing increased betting options and a reference to the invention providing a "betting regime". Mr Walsh also pointed to the phrase (Ex P2, Tab 9, p 49) indicating that the alleged detailed description which was said to follow should not be taken in a limiting sense and that it foreshadowed that the scope of the invention should be seen as best defined by the "appended" claims, none of which of course were appended.

162 In summary then I accept Mr Walsh thought the invention or the crux of it was the supplementary betting option and, with instructions limited to baccarat, did his best to leave the door ajar as to other possibilities.

Mr Kafataris' involvement

163 It is common ground that via a Mr George Barbouttis the plaintiff came to know Messrs Thomas and Davis.

164 Mr Kafataris asserts that the context in which he came to be introduced to Messrs Thomas and Davis was Mr Barbouttis approaching him to see whether he could assist the defendant with the "mathematics in order to make it workable". Mr Thomas denies that he was looking for any assistance with mathematics because he had retained and received information from Dr Müller but he agrees he was looking for the possibility of partnership with someone who may provide at least some financial support for the project.

165 Nonetheless it is common ground that the parties met for the first time on 14 November 2012.

166 Mr Thomas asserts that during the course of this meeting Mr Kafataris, having been informed that some odds had been prepared by a mathematics academic, expressed interest at looking at them. Mr Thomas contends he indicated to Mr Kafataris there was no need to check them but he was happy to provide them. Mr Kafataris on the other hand asserts that Mr Thomas simply said that numerous attempts had been made to calculate the odds and that an actuary had been engaged but there was little success in completing the task and requested Mr Kafataris to assist. I accept Mr Kafataris' version as being more probable.

167 There is certainly no doubt that on 14 November Mr Davis forwarded Dr Müller's "final report" to Mr Kafataris. It is plain from that email that Dr Müller wished to have nothing further to do with the defendants.

168 Mr Kafataris indicates that he considered the odds and came to the view having reviewed Dr Müller's calculations that they did not consider all available outcomes and were unworkable in a commercial context largely due to the fact that some odds appeared to provide for payments of odd amounts, eg $2.25.

169 Over the course of December, Mr Kafataris sent two sets of odds to the defendants which are described in the pleadings as the First and Second Kafataris Additions respectively.

170 Mr Kafataris was cross examined about his methodology in calculating odds and I am satisfied that despite some grandiose claims to the contrary he very largely accessed the website "The Wizard of Odds" which provides for both the game of baccarat and for that matter blackjack the probability of certain events occurring, and calculated a return based on certain probabilities. Having had access to the website, at least to the extent described in the affidavit of Ms St John, I am also satisfied that Mr Kafataris performed relatively straightforward mathematical exercises by either adding in a 5% margin for the casino (about which he made an assumption) and re-did the calculations in the event that the return provide an odd amount eg $2.25.

171 Whilst I accept Mr Kafataris may have spent many hours over a number of days considering the odds and undertaking his calculations, so far as odds were concerned I am satisfied he very largely if not entirely relied upon publicly available information from a web site called Wizard of Odds. He however tried to down play that in his evidence (T25/25-29). He accepted that the probabilities tables that he used came direct from the Wizard of Odds table to which he then undertook a number of obvious and modest adjustments, as far as I could tell.

172 In particular, Mr Kafataris acknowledged that the figures in the First Kafataris Additions (ie the email sent 12 December 2012 at CB1/115) were not obtained from the website in that form, but that "some of the source of those calculations and the derivations I made to calculate the odds were from those Wizard of Odds" (T23/46). He asserted that "Wizard of Odds was one component of understanding the probabilities" (T24/2).

173 Mr Kafataris was taken to Exhibit D1, Tab 21 which sets out a comparison of the tables attached to the email of 12 December with the evidence provided by Ms Frances St John. I should note the affidavit of Ms St John was read but she was not required for cross-examination.

174 The first set of tables he prepared gives the odds for a banker win, player win and tie win (ie a three way outcome). The figures in each cell can be calculated as described below.

175 Mr Kafataris agreed that probability tables were taken from the Wizard of Odds website (T25/31). With no inclusion for casino margin (T24/32), those probabilities are then inverted to give the true odds (T25/46). Mr Kafataris acknowledged that the inversion exercise was one component in which the first three tables in the attachment to the email of 12 December were created (T26/12). I cannot see any other component which would be involved in the creation of those odds. At that stage, no smoothing had been attempted or casino margin included.

176 The odds were also calculated for a two way outcome, in which a tie did not pay out. In that case, odds were only calculated for a player win or a banker win.

177 Mr Kafataris again acknowledged that the probability figures were derived from the Wizard of Odds probabilities tables (T26/34, T26/49). A formula was inserted to redistribute the probability of a tie between the already existing probabilities for a banker win or player win (T27/7-T27/20). Those probabilities are then inverted, in the same way as for the three-way outcome tables, to produce odds for a banker win and a player win.

178 Mr Kafataris agreed that the Second Kafataris additions, as attached to his email of 26 December 2012 (CB1/122) and which includes a theoretical margin and some smoothing of the odds, were based on the figures produced in his previous email described above (T27/47).

179 The tables attached to this email gave odds for a two-way outcome, and so use the redistributed probabilities described above. By adding a certain margin to the probability of a win, inverting the probability and smoothing where necessary, the figures were obtained (T28/3-T29/18).

180 In the meantime, the parties had various meetings in December and importantly on 19 December Mr Kafataris appears to be well advanced in what I think it is fair to say was a due diligence he was undertaking for the purposes of coming to a view of whether or not he would become an investor or joint venturer in the proposed patent application and invention devised by Mr Thomas. It was at this meeting which Mr Kafataris asserts Mr Thomas raised a proposed partnership and adverted to a split of percentages offering Mr Kafataris 30% and the remaining split 30% to Mr Thomas, 30% to Mr Davis and 10% to Mr Barbouttis. Importantly however Mr Kafataris asserts that it was at this meeting and for the first time he raised the prospect of him doing some calculations to see what the odds would be in relation to blackjack (upon the assumption I infer that a supplementary betting option existed).

181 Mr Thomas agrees that Mr Kafataris raised the question of blackjack at the 19 December meeting. However Mr Thomas contends it was raised in a very different way. He asserts that Mr Kafataris asked the question whether the "patent" could be used for blackjack. Mr Thomas says that he said that it could be used as a supplementary betting option for "all casino table card games" and it was not just about baccarat or blackjack.

182 I accept that blackjack was raised by Mr Kafataris. I am not prepared to accept Mr Thomas had even considered blackjack let alone was in a position to assert one way or the other that his invention would apply to it. I consider Mr Kafataris' version of this conversation as more probable and I accept it.

183 Mr Thomas also insists that Mr Kafataris raised the question of whether or not there existed in Singapore a variation which was similar to double up and referred to as insurance. Again Mr Thomas indicates that he corrected what was a clear misunderstanding of the game on Mr Kafataris' part. Nothing much turns upon that in my view, but I am of the view Mr Kafataris did raise the question of an "insurance bet", given his email of 12 December 2012, and that he was confused about its similarity with Mr Thomas' invention.

184 Relevantly Mr Thomas and others and Mr Kafataris met again on 28 December. Mr Kafataris asserts that again he raised the possibility of blackjack being another opportunity and was becoming more enthusiastic about the issue. Mr Thomas on the other hand asserts that Mr Kafataris simply asked the question whether the system could be applied to blackjack to which Mr Thomas then again indicated that it was a betting option for all table card games. Again for the reasons already stated I reject Mr Thomas's version of the conversation and I am inclined to accept the version given by Mr Kafataris.

185 There is little doubt that the parties in late 2012 and early 2013 were seemingly enjoying a cordial relationship and one which each hoped would be commercially productive. However they were sizing each other up and no doubt exploring the possibility of whether they thought they could work with each other. Mr Kafataris was making contributions gratuitously to the calculation of odds and Mr Thomas and Mr Davis were on all accounts candidly discussing their thoughts with him and each other.

186 The next meeting of relevance it seems to me is 17 January 2013. This was a meeting which on this occasion was by telephone and included Mr Davis, Mr Thomas, Mr Barbouttis, Mr Kafataris and Mr Walsh. Mr Kafataris insists during this meeting he asked Mr Walsh whether other games could be included in the PCT application to which Mr Walsh is alleged to have said that they could be if they were related to the invention but they had to be finalised by April of that year.

187 Not unimportantly Mr Kafataris volunteered to do some more work and revise his tables to which Mr Walsh indicated that that would not be necessary. Again I am satisfied that Mr Kafataris' version is however likely the accurate account.

188 Mr Kafataris does not however assert that at this meeting with Mr Walsh and others he raised the question of blackjack. Mr Thomas on the other hand recalls Mr Kafataris posing a question for Mr Walsh namely whether the patent applied to blackjack. Mr Thomas's recollection of the conversation was that Mr Walsh indicated that the patent was for a supplementary betting option and that it did apply to all "table games". Mr Walsh's version of this conversation does not include any recollection of Mr Kafataris raising blackjack. Mr Walsh has a diary note (Ex P2, tab 13), although it makes no mention of any detail of any item discussed at the meeting.

189 Although not critical in the determination of the matter it seems to me more likely that Mr Kafataris did not raise the question of blackjack at this meeting and to that extent I prefer the versions of the meeting deposed to by Mr Walsh.

190 A number of meetings were held between the parties in January and Mr Kafataris on 23 January during a business trip to Macau undertook what he described as "further research" by visiting casinos and trying to determine whether any side games for baccarat existed. He thought about the potential exploitation commercially of the invention. He satisfied himself that at least so far as his research went he could not detect any baccarat games in existence which had a similar side bet arrangement to the invention.

191 On 12 February Mr Kafataris met with Mr Davis and Mr Barbouttis. It is at this meeting that Mr Kafataris outlined for the first time the basis upon which he wished to proceed. He says that he proposed that he be given the ability to commercialise the invention without any outside interference. He would of course keep the other parties informed but proposed that there be a 51% split to himself and 49% to all others. He asserts at this meeting that he indicated that the reason he proposed to have a 51% shareholding in the venture was because he intended to add blackjack which he told those present at the meeting he had been working on together with other conceptual ideas. He put forward as it were his credentials as being experienced in marketing and matters of that sort. He said Mr Davis at the meeting indicated that that sounded good but that he invited Mr Kafataris to document the terms and forward them to Mr Davis and others.

192 I am not satisfied that at this meeting Mr Kafataris advanced his work on blackjack as the reason to justify his 51% offer. The simple fact is that on 18 February when Mr Kafataris forwarded his proposal (dated 15 February and which is very detailed) it referred only to baccarat and does not advance his contribution or development of the blackjack option as a reason for substantiating his offer of 51%. I would have expected it to be there if in fact at the time it was a genuine reason why he thought he was entitled to 51% of any deal. I do not accept that as at 15 February he advanced blackjack as a reason for his 51% share.

193 In Mr Kafataris' proposal of 15 February there was also attached a diagrammatic representation of his proposed corporate structure in the event the parties reached agreement.

194 Mr Thomas and Mr Davis considered Mr Kafataris' proposal but unsurprisingly wanted to see some draft contracts. Mr Davis also wanted to consult with his lawyer. Mr Kafataris wanted complete management control and the defendants wanted to consider their position carefully.

195 On 26 February Mr Kafataris sent an email to Mr Davis and Mr Thomas indicating his suggestions about who should do what in terms of putting the commercial deal together. Mr Kafataris volunteered to instruct lawyers to draft contracts and think about setting up the new corporate structure and discretionary trust.

196 In February and early March 2013 Mr Walsh was preparing for the filing of the PCT application which had to occur by 3 April. As a result he had meetings and discussions with his clients and Mr Kafataris for that purpose.

197 On 4 March 2013, Mr Kafataris made a telephone call to Mr Walsh, in which he indicated he wanted to include a reference to blackjack in the PCT application. Mr Kafataris disagreed with Mr Walsh's account but did not deny that request was made (affidavit in reply dated 19 August at [96]).

198 Mr Walsh asserts that he told Mr Kafataris such an inclusion was unnecessary because it was in effect already part of the provisional application. Mr Kafataris denies Mr Walsh responded in that fashion.

199 I observe Mr Walsh was not challenged in cross examination by the plaintiff in respect of his alleged response. However, whilst I am satisfied he did have in his mind that the invention was the wagering system or supplementary betting option and not simply the game of baccarat, I do not accept that his own instructions or state of knowledge would have honestly led him to have said such a thing at that time. Although the evidence in totality is left in a somewhat unsatisfactory state, in the circumstances I accept Mr Kafataris' denial that Mr Walsh made the relevant statement.

200 Mr Walsh must have appreciated by early 2013 that Mr Kafataris had been asking questions and raising blackjack in the context of the invention. As a result it follows Mr Walsh must then have thought about it as well. On one view the answer he allegedly gave Mr Kafataris on 4 March is consistent with what he asserts he thought from early 2012. However I am not satisfied Mr Walsh did say such a thing. Whilst there is no doubt Mr Kafataris clearly requested the inclusion of blackjack in the PCT application, neither Mr Walsh's diary note of the telephone call on 4 March nor his email to Mr Davis of 5 March makes any reference to him telling Mr Kafataris that he regarded blackjack as another embodiment. For those reasons I do not accept Mr Walsh's version.

201 In [47] of his affidavit, Mr Walsh asserts that he did not consider it essential to include blackjack in the PCT application but it would not be "harmful". I am not satisfied he actually held that view in early March 2013 and I do not consider he said statements to that effect. I think that evidence is a contrivance.

202 On 10 March Mr Kafataris sent an email to Mr Walsh. He referred to the conversation "last week" and gave Mr Walsh a description of what he called the "variant blackjack bet type". I have referred to this email earlier. Of course he was yet to complete the "mathematics".

203 At this stage all persons concerned appreciated that 3 April 2013 was the deadline for the filing of the PCT application.

204 On 11 March Mr Walsh met with Mr Thomas and Mr Davis in the absence of Mr Kafataris. He updated them on a number of things including his recent conversation with Mr Kafataris. He has a diary note of the conversation. He informed the others that Mr Kafataris had raised the application of the invention to blackjack to which Mr Thomas indicated that blackjack was not best commercially as it was associated with "mums and dads" gaming, which he regarded as much less important commercially than baccarat. Mr Davis agreed with Mr Thomas. Mr Walsh indicated that he informed those present that adding blackjack would be to add another example of how the invention could be applied so it would not be a problem if they wanted to include it however the invention is not a particular game but rather a betting regime that could be applied to card games generally. He told Mr Thomas and Mr Davis that it was not necessary to include a reference to blackjack but they needed to make some decisions about whether the PCT application should cover casinos and on line gambling and which countries they want to cover. I am not by any means certain Mr Walsh said this but really nothing much turns on this in this case.

205 There is little doubt that Mr Walsh, Mr Thomas and Mr Davis discussed blackjack possibly at some length on 11 March. However Mr Thomas makes no reference to such a meeting in his affidavit, nor for that matter does Mr Davis. I am satisfied, based on Mr Walsh's diary note of the meeting, that Mr Thomas as Mr Walsh suggests, made comments to the effect that blackjack was not best commercially and that it was a "mums and dads" game. There is also no doubt that notwithstanding those views a decision was taken to include it. I am satisfied this was done because in effect Mr Kafataris, with whom commercial negotiations were well advanced, had requested such an inclusion and it was thought by the others to be not inconvenient to do so. It also plainly provided another example where the supplementary betting option could be exploited.

206 Mr Kafataris also asserts in his affidavit at [84] that in the period January to March 2013 he "developed a side bet specific to the card game known as blackjack" and he set out the "specifications of this game" in a document titled "Blackjack Dealer Bet Games Rules". There is no doubt he did this work.

207 I consider in passing however that it is clear from Mr Kafataris' email to Mr Davis of 14 March that he substantially created the blackjack dealer bet games rules from the format of the baccarat game rules created by Mr Thomas. In addition I am satisfied Mr Kafataris clearly had to make himself familiar with the rules of the game for the purpose of identifying when, if at all, a supplementary or subsidiary betting opportunity might arise.

208 On 18 March Mr Kafataris sent to Mr Walsh a number of documents including the blackjack dealer bet game rules. He said (Exhibit P2, Tab 20):

Find attached 2 documents in relation to the existing baccarat patent and the addition for the blackjack side bet.

I have taken the liberty to review the baccarat document previously submitted by Rowland on the baccarat rules and made some changes to the document as there was some grammatical and formatting errors in the document. I have used the baccarat format to outline the blackjack rules as well.

...

209 In his affidavit of 26 March 2014 he asserts that between the period of mid-January to mid-March 2013 he spent about 50 hours working on the game of blackjack and in particular working on odds creating tables and creating a blackjack dealer bet game rules document. I accept that he did undertake those activities.

210 I should note that at [85] of his affidavit, Mr Kafataris describes a similar process in relation to blackjack of calculating odds for the dealer to bust, adding theoretical margins and smoothing where necessary. In the circumstances it is reasonable to infer that he undertook a similar if not identical methodology to the one described above. If he had adopted a different methodology I would have expected him to give direct evidence to that effect.

211 On 20 and 22 March Mr Kafataris was busily communicating with his lawyer Mr Dheer in an attempt to have the contractual documentation finalised.

212 On 25 March Mr Kafataris and Mr Dheer continued to correspond with each other about drafts of the various proposed contractual documents.

213 Later on 25 March Mr Kafataris sent to Mr Davis two draft agreements which he described as forming "part" of the arrangements moving forward. He asked Mr Davis to pass them on to Mr Thomas for his review. He noted that his lawyers would be sending copies to Mr Walsh. He acknowledged that "time is of the essence' and invited Mr Davis to contact him that afternoon.

214 Indeed a meeting did take place but not until Tuesday 26 March in the morning. Mr Kafataris met with Mr Thomas only on that morning. He asked Mr Thomas whether Mr Thomas had had an opportunity to look at the documents. Mr Thomas said he had according to Mr Kafataris they looked fine, but he wanted to speak with Mr Walsh. Mr Kafataris suggested that the documents be executed Thursday of that week at 1.30om.

215 A little later that morning, Mr Kafataris sent an email to Mr Dheer. In the email he referred to a meeting with Mr Thomas and Mr Davis. In any event he indicated to Mr Dheer that "they" had accepted the documents as they are. Mr Kafataris expressed his surprise at Mr Thomas's reaction as he expected some pushback on some of the "commercials". He asked Mr Dheer to have clean copies available for execution on Thursday of that week but also requested that he perform background checks on Mr Thomas and Mr Davis and his father.

216 Having previously sent him an earlier version of some of the proposed contractual documents Mr Dheer sent revised copies to Mr Walsh. Mr Kafataris asserts he had a conversation with Mr Thomas in which he indicated that he was simply following up to see how Mr Thomas and others were going with the draft documents. He told Mr Thomas that he wanted to make sure that all was in order for execution on the Thursday. He also indicated that his lawyers had not heard back from Mr Walsh. Mr Thomas indicated that he would follow it up with Mr Walsh with whom he had had a meeting the day before. Mr Thomas says in his affidavit at [58]-[60] that he was concerned with a number of the terms that Mr Kafataris had had inserted into the proposed contractual documents. Some of the terms he had not seen before. He says he had a conversation with Mr Davis and they both agreed that the proposed contractual documents were one sided.

217 Mr Thomas makes clear in his affidavit that he told Mr Kafataris at the meeting on 26 March that he would need to get legal advice before the proposal could be discussed further. Mr Kafataris rang Mr Thomas again on 27 March to ask how things were going and again Mr Thomas indicated that he wanted to get legal advice. A conversation to the same effect according to Mr Thomas took place on the 28th.

218 On 1 April Mr Thomas asserts that he discussed the proposed contracts with a Mr Cameron who was a business colleague of his. Mr Cameron confirmed Mr Thomas' view that the documents were somewhat one sided.

219 Between 29 March and 3 April Mr Kafataris' lawyers exchanged emails with Mr Walsh concerning the filing of the PCT application. Indeed on 31 March Mr Dheer sent an email to Mr Walsh to ensure that the PCT application was ready for filing.

220 On 2 April Mr Walsh sent an email to Mr Dheer indicating that both on that day and the next he would be working on the PCT application for filing on 3 April. There was also discussion about the assignment of the patent from Mr Thomas to Mr Davis. Mr Walsh also gave Mr Dheer an assessment of the approximate fees involved in preparing and filing the PCT application.

221 On 2 April Mr Kafataris sent an email to Mr Dheer indicating that he believed Mr Davis and Mr Thomas expected to see their solicitor that day with a likely execution of the documents on 3 April. He also mentioned the 3 April deadline for the PCT application and that he had checked with Mr Thomas and Mr Davis the previous week just to confirm that the filing of the PCT application would be done on time.

222 Meanwhile on 2 April Mr Thomas and Mr Davis had met with a Mr Rhydderch, solicitor about the proposed documents. As a result of that meeting Mr Thomas decided he would not agree to Mr Kafataris' proposal or the signing of an agreement with him on the terms set out in the proposed contracts.

223 On 3 April Mr Kafataris informed Mr Dheer that he had heard from Mr Thomas and Mr Davis that on advice from their "new" lawyer they did not want to sign the proposed documents but wanted to restructure the deal. Mr Kafataris expressed his surprise at this change of position.

224 Later on 3 April Mr Dheer sent an email to Mr Rhydderch indicating his client was surprised at the change of position.

225 What is clear is that no doubt in the context in which he hoped or expected to do a deal, Mr Kafataris was it seems at least offering the material on blackjack for inclusion in the PCT application. Indeed on one view he was requesting that it be included and was obviously authorising or consenting to Mr Walsh making use of it as part of the application.

Discussion

226 As I have previously said, the plaintiff does not contend that Mr Thomas did not create something novel when he identified the possibility of a supplementary betting option within the game of baccarat. The plaintiff's contention is that Mr Kafataris made a material contribution by identifying a supplementary betting option within the game of blackjack. I do not agree.

227 A contribution has to be a material, tangible or qualitative contribution to the invention. Therefore there has to be some contribution to the concept, design or perhaps method. It seems to me that when added, the contribution must be seen objectively as indeed part of the invention.

228 Clearly in this case the parties were working closely together in order to forge an ongoing commercial relationship based on the patent application. It was submitted by the plaintiff that collaboration is an indicia of being a joint inventor: see JMVB Enterprises Pty Ltd v Camoflag Pty Ltd (2005) 67 IPR 68 at [132] per Crennan J; plaintiff's final submissions at [39]-[50]. While I accept that proposition, it cannot trump in and of itself the need for a Court to distinguish between a qualitative rather than merely quantitative contribution to the invention as a matter of fact.

229 Fundamental to determining whether a contribution is material requires a determination of what the invention in fact is. The PCT application is the obvious guide. As I have already said, it seems to me it is a method of wagering whereby a supplementary betting option can be exploited, and I agree with the defendants' final submissions on this point set out at [51] and [54] to that effect.

230 There is no doubt Mr Thomas created the concept of a supplementary wagering opportunity in the context of baccarat. That opportunity was constrained entirely by the rules of that game, in particular the rules of that particular species of baccarat known as punto banco.

231 There is little doubt in my mind that Mr Thomas never did advert specifically and I am satisfied at all to the possibility of such wagering opportunity in respect of blackjack or for that matter any other card game.

232 Nonetheless it seems to me that the invention or the novelty which Mr Thomas had identified, and which Mr Walsh on the basis of his instructions was attempting as broadly as he could to articulate in the provisional application, was a supplementary betting or wagering opportunity within the rules and hence the constraints of an existing and very well known card game, being baccarat. That therefore was the inventive step in my view mainly to conceive of the possibility of such an opportunity and then to undertake by luck, hard work or otherwise the identification of an appropriate point within the rules of baccarat when such an opportunity could be exploited. Mr Thomas addressed a problem and came up with a solution to use familiar terminology so as to conceive of an idea of doing a new thing (that is, exploit an additional betting opportunity) or perhaps put another way a new idea of achieving a previously known goal.

233 The mere fact that only one opportunity was detected by Mr Thomas within the rules of baccarat does not affect the notion of novelty.

234 I am satisfied that Mr Kafataris, alerted to the concept or idea of a supplementary or subsidiary betting opportunity by Mr Thomas, approached the rules of blackjack in order to identify whether a similar opportunity arose. He knew as a result of the work undertaken by Mr Thomas that in the baccarat context the opportunity arose when the dealer or banker was obliged to take a third card. With this information he then undoubtedly reviewed the rules of blackjack to identify a similar if not identical opportunity namely the opportunity of the dealer or banker being placed in the position where they were required by the rules of the relevant game to take a third card. He says as much in my view in his email to Mr Walsh of 10 March, set out at [33] above.

235 I am not satisfied that his analysis as it were involved any inventive step at all or should be seen as a material contribution to the invention. As Justice Aickin pointed out in Minnesota Mining the opening of a safe is easy when the combination has already been provided. More relevantly perhaps in this case Mr Thomas identified the possibility of a supplementary betting option and provided Mr Kafataris with in effect a torch. Mr Kafataris decided with the acquiescence of Mr Thomas and others that he would use it on the rules of blackjack. But Mr Kafataris was only able to identify a similar opportunity in blackjack after the idea of a supplementary betting opportunity had already been identified in baccarat.

236 I do not consider Mr Kafataris' activity to involve a material contribution or to have brought something new or different to the invention. It does not represent a departure from the idea of the invention, but rather what it does is simply to provide an additional opportunity for a supplementary bet.

237 Counsel for the plaintiff suggested that identification of the supplementary betting opportunity in a second card game leads to the generalisation from a method of playing baccarat to a wagering system applicable to all card games, and that is a material contribution (T259/30-T259/43). It is submitted that broadening is a "critical change" and that Mr Kafataris made a material contribution to that change (T271/24-T271/43). I do not agree. Mr Kafataris was able to identify that opportunity in blackjack, and therefore enable Mr Walsh to draft the PCT application more broadly and amplify or elaborate on the crux of the invention with the benefit of a second example. Mr Kafataris' contribution as it were cannot be properly regarded as material to the final form of the invention as described in the PCT application. It did not bring about a change to the invention, rather it merely provided another example.

238 It was also submitted by counsel for the plaintiff, and the subject of significant cross-examination, that the result of the exploitation of the supplementary betting opportunity in each card game was materially different and that this pointed, in and of itself, to a material contribution. In other words, a distinction was drawn between the application of the invention to baccarat in which the bet is placed on the outcome of the game, with the application of the invention to blackjack in which the bet is placed on whether the dealer will bust. It would be possible in the latter game to place a bet on the dealer not busting and win both the primary and secondary bet (for example if the dealer had 18 and the player 20). I do not regard that distinction as pointing, in any way, to a material contribution on the part of Mr Kafataris but rather an indication of the supplementary betting option being exploited by reference to the particular rules of the game to which it is applied. The consequence or event on which the bet is being placed is neither here nor there; as a matter of course the application would differ based on the different rules of the game.

239 The plaintiff also submitted that it would be theoretically possible to find that although provisional application clearly disclosed a wagering system relating to all card games, that disclosure was wider than what Mr Thomas had actually invented, and that would simply mean that Mr Walsh had drafted wider than what had actually been invented. It was submitted that it was not until Mr Kafataris contributed blackjack that a method of wagering relating to all card games was actually invented: see plaintiff's final submissions at [18]. I do not accept that analysis on the basis it assumes that the invention was baccarat with a twist as it were, whereas I am of the view that Mr Walsh was correct in regarding the supplementary betting option as the crux of the invention, of which only one example could be given at the time of the provisional application. For the reasons I have already advanced, what Mr Kafataris did was to provide another example in which the invention could be used.

240 It seems to me that one might describe what Mr Kafataris did as to identify a development along the same line of thought which constituted or underlay the original invention. In that sense I do not think it is appropriate to describe him or regard him as an inventor as opposed to a competent technician who was able to solve a problem on the basis of Mr Thomas' idea and the rules which constrain the playing of the game of blackjack.

Were the parties in a fiduciary relationship?

241 The plaintiff pleaded a fiduciary relationship between the defendants and Mr Kafataris in respect of their dealings with the invention the subject of the PCT application and/or the confidential information (being the first and second Kafataris additions and the blackjack invention). Fiduciary duties to avoid a position of conflict and profit, and breaches thereof, were pleaded: see [35]-[42] of the statement of claim.

242 Counsel for the plaintiff made it clear that this aspect was still being pressed insofar as it might be a component of the confidential information case, but otherwise it was not being pressed (T143/20-T143/28).

243 In closing submission, counsel for the plaintiff submitted that parties in commercial negotiations, when handing over confidential information, repose in each other a level of trust and confidence (T306/14). No further points were made in written submissions by the plaintiff as to the basis upon which fiduciary duties might be imposed on the plaintiffs: see final submissions at [51]-[56].

244 Counsel for the defendant made written submissions on this point: see defendant's closing submissions at [81]-[88]. It is submitted that there is no evidence that any of the parties undertook to act in the interests of the others, and their relationship was one of arms' length commercial negotiations: see, for example, Hospital Products International v United States Surgical Corporation (1984) 156 CLR 41 at 70 (per Gibbs CJ). Indeed, it never progressed beyond such a relationship. It is also submitted that the relevant trust and confidence was absent.

245 I consider given my factual findings that the submissions of the defendant are correct, and I do not find the relationship between the parties to be one in which the defendants undertook or agreed "to act for or on behalf of in the interests of another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense" (Mason J in Hospital Products at 96-97).

The confidential information case

246 The plaintiff pleads that the defendants were bound by an equitable obligation to keep the first and second Kafataris additions and the blackjack invention confidential. Such an obligation was said to extend to a requirement not to disclose or use the confidential information other than for the joint benefit of the plaintiff and the defendants or unless Mr Kafataris was named in the PCT application as an inventor or an applicant. That obligation was said to have been breached by the incorporation of the confidential information in the PCT application: see statement of claim at [29]-[31].

247 The plaintiff submitted that "there can be little doubt that the information... was confidential in equity" and that it "clearly satisfied the three elements required in Coco v AN Clark (Engineers)": plaintiff's final submissions at [51]-[52]. I am not satisfied that either of those statements is correct.

248 The defendant submits that the two odds spreadsheets and the blackjack rules document were largely comprised of publicly available information and a document Mr Kafataris obtained from the defendants. Furthermore, it is submitted that these materials were freely circulated by Mr Kafataris.

249 Indeed, in relation to the first odds spreadsheet, the following exchange occurred between counsel for the defendant and Mr Kafataris (T22/44-T23/28):

Q. In this email, you're attaching some of the workings for the odds for the invention, correct?

A. Yes.

Q. You're not making any claim in this email that the information is confidential?

A. I don't state that in the email, no.

Q. It wasn't your view at the time that it was confidential information?

A. No, it depends on your definition of "confidential" but in normal sense, no.

Q. In what other sense are you suggesting it might be confidential?

A. I understand in a legal sense I've just found out, but I'm not sure. No, it wasn't.

Q. It would be far better if we just focus on the normal for a moment.

A. Sorry, okay.

Q. We'll deal with the abnormal in closing submissions, but as to the normal -

A. Yes.

Q. - normal meaning of "Confidential Information", why did you understand that this information was not confidential?

A. I gave it freely, I gave the information freely.

Q. Why did you give it freely?

A. Because I did it as a favour to George.

Q. Any other reason?

A. No.

Q. Could it be that you considered that in part it was information based on publicly available information you'd located for the purposes of performing the calculations?

A. That's not publicly available information.

[emphasis added]

250 What followed was the elucidation of the process of creating the figures in the two spreadsheets, to which I have already referred.

251 Given the source of the material from a public website and/or the defendants themselves, and the ease with which the information in the odds spreadsheets could be easily duplicated, I am not satisfied that the information has the requisite qualities which would require protection by equity.

252 Nor am I convinced that the information was imparted in circumstances importing an obligation of confidence. There was never any request to keep such information confidential, nor any attempt to impose a non-disclosure agreement or other similar means of protecting confidential information in commercial negotiations. There is in fact no evidence whatsoever that Mr Kafataris ever indicated, expressly or impliedly, that the information now sought to be protected should be regarded as confidential by the defendants or Mr Walsh.

253 Finally, to the extent that the information has the necessary quality of confidentiality or was imparted in circumstances suggestive of such, I am not satisfied that Mr Kafataris did anything other than consent or authorise the inclusion of such information in the PCT application. He was a willing participant in such an inclusion.

254 Therefore the plaintiff's claim of a breach of an equitable obligation of confidence must fail.

Conclusion

255 For the reasons advanced, the plaintiff must fail on his statement of claim. He is not entitled to a declaration that he is an inventor within the meaning of section 15 of the Patents Act 1990 of the invention the subject of the PCT application. Nor is the plaintiff entitled to a declaration of constructive trust in his favour on the basis of a breach of confidence.

256 I invite the parties to prepare short minutes to give effect to my reasons, and to relist the matter if necessary so that the question of costs may be determined.

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Decision last updated: 24 October 2014