ABB Engineering Construction Pty Ltd v a Goninan & Co Limited

[1999] APO 16

OFFICIAL NOTICE

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Application  :          No. 657639 in the name of ABB Engineering Construction Pty Ltd

Title:          Cam mechanism for a system for discharge of bulk materials from vehicles

Action:          Opposition under s.59 by A Goninan & Co Limited and an objection to an application by A Goninan & Co Limited to serve further evidence

Decision:          Issued            .

Abstract

After an amendment to the statement of grounds and particulars, the opponent served further evidence and the applicant served evidence in response.  The opponent applied to serve further evidence to reply to the evidence in response.

The evidence, which had not yet been prepared, was not considered to be such as to probably have an important influence on the case.  Because of this, there would be an unnecessary protraction of the case.

While ABB and the public would not be disadvantaged, the degree of disadvantage to Goninan, if the application to serve further evidence was refused, would not be great.  The main evidence had already been served by Goninan.

Where the opponent is allowed to amend the statement of grounds and particulars after the evidence in support has been completed, there is no automatic entitlement for the opponent to serve evidence in support and evidence in reply in relation to the amended particulars.

Application to serve further evidence refused.

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent Application No. 657639 by ABB Engineering Construction Pty Limited, s.59 opposition by A Goninan & Co Limited and an objection to an application by A Goninan & Co Limited to serve further evidence.

BACKGROUND

Patent application no. 657639 was filed on 14 September 1993 by ABB EPT Construction Pty Limited, now ABB Engineering Construction Pty Limited (hereinafter ABB).  The application is for a patent of addition based on patent 649883.  That patent is the subject of infringement and revocation proceedings in the Federal Court.

Application 657639 was advertised accepted on 16 March 1995.  A Goninan & Co Limited (hereinafter Goninan) filed a notice of opposition on 16 June 1995 to the grant of a patent on the application.  The company subsequently filed a statement of grounds and particulars on 15 September 1995.  Goninan completed the serving of evidence in support on 24 April 1996.  ABB completed the serving of evidence in answer on 11 March 1998. The evidence in reply was completed on 11 September 1998.

On 20 March 1998, Goninan filed a request to amend the statement of grounds and particulars.  ABB objected to this request.  In a decision dated 21 August 1998, a delegate of the Commissioner allowed the amendment to the statement of grounds and particulars.  The amendment referred to a system called the Dalrymple Bay system.  The delegate allowed Goninan one month from the date of the decision to serve further evidence in support of the amended statement of grounds and particulars.  The delegate also allowed the applicant two months from the date of service of the further evidence to serve evidence in response.

Goninan completed service of the further evidence in relation to the Dalrymple Bay system on 21 September 1998.  This took the form of a statutory declaration by Mr David Watkins.  Part of the evidence in response was served on 23 November 1998 and the evidence in response was completed on 4 December 1998 after a short extension of time was allowed.

In a letter dated 27 November 1998, Goninan indicated that, pursuant to reg. 5.8(4)(a)(ii), it intended to serve evidence in reply to the applicant's evidence in response served on 23 November 1998.  In a letter from the Patent Office, dated 30 November 1998, Goninan was advised that the provisions of reg. 5.8(4)(a)(ii) do not apply to evidence in response to further evidence.  Goninan was advised that it would have to apply under reg. 5.10(4) for leave to serve further evidence if it wished to respond to ABB's evidence in response.

On 8 December 1998, Goninan requested leave to serve further evidence to allow it to respond to the applicant's evidence in response.  In another letter from the Patent Office, the applicant was afforded the opportunity to object to the application to serve further evidence.  Both parties were advised that the Commissioner's delegate considered it appropriate if the application was allowed that Goninan be allowed 1 month to serve its evidence.  The Commissioner's delegate also expressed the view that, given the history of the evidentiary stages of the present opposition process, it was not appropriate to allow the applicant an opportunity to respond to Goninan's further evidence if the application to serve further evidence was allowed.  If Goninan served further evidence which included an issue to which the applicant wished to respond, the delegate indicated that the applicant would also need to apply for leave to serve further evidence.  I note here that included in the history of the evidentiary stages referred to by the delegate is a separate application for further evidence by ABB to file evidence in relation to Goninan's normal evidence in reply.

The applicant objected to the application by Goninan to serve further evidence.

The matter was heard in Canberra on 1 February 1999.  ABB was represented by Mr Bernard Holt, patent attorney of Halford & Co, Sydney.  Goninan was represented by Mr Philip Kerr and Mr David Yates, solicitors of Allen Allen & Hemsley, Sydney.

APPLICATION TO SERVE FURTHER EVIDENCE

In reasons provided with the application to serve further evidence filed on 8 December 1998, Goninan indicated that the serving of evidence on the Dalrymple Bay system and evidence in response had been allowed by the delegate as a result of a change to the statement of grounds and particulars.  Goninan argued that, if the new particulars had in fact been part of the original statement of grounds and particulars, it would have been entitled to serve evidence in support and also evidence in reply to ABB's evidence in answer.  All that it was seeking to do in the present application to serve further evidence was in effect be able to serve evidence in reply to the applicant's evidence in answer (evidence in response).  This was something it would normally have been entitled to do in line with the normal evidentiary cycle provided by the regulations for opposition matters.

Goninan also argued in the reasons accompanying the application that there would be no injustice to ABB if the application to serve further evidence were allowed because Goninan would only be receiving what was normally due to it in the normal cause of serving evidence.  Also, there would be no injustice to ABB because any further evidence served by Goninan would only more narrowly define the issues of conflict between the two parties.

The application was not accompanied by any further evidence.

SUBMISSIONS

At the hearing, Mr Kerr, for Goninan, expanded on the above reasons accompanying the application for leave to serve further evidence.  This further evidence was really only evidence in reply to what was really evidence in answer by ABB, he submitted.

Mr Kerr also referred to the office decision Micronair (Aerial) Limited v Waikerie Cooperative Producers Limited 7 IPR 107. Taking the three criteria set out in this decision, he argued that the evidence could not have been obtained earlier because it was evidence which was going to respond to the applicant's evidence. Mr Kerr argued that the evidence probably would have an important influence because it will help to establish, in conjunction with the earlier filed evidence, that the present invention is anticipated. The evidence could not be said to be not credible because the proposed declarant had already filed earlier evidence on the Dalrymple Bay system. There would be no protraction to the opposition because Goninan is only seeking a 1 month time period to serve this further evidence. Mr Kerr also argued that the applicant would not be unduly prejudiced because this was the normal cycle of serving evidence.

Mr Kerr drew my attention to the fact that a Federal Court matter was on foot in relation to the parent of the present patent application which is an application for a patent of addition.  He indicated that the same material in relation to the Dalrymple Bay system had been filed in the Federal Court matter in relation to the parent and that the Court had allowed Goninan an opportunity to put in further evidence to reply to ABB's evidence responding to the evidence on the Dalrymple Bay system.  He indicated that the Federal Court hearing was set down for 15 March 1999.  Therefore, as the cases were dealing with similar, although not the same subject matter, the evidence which Goninan wished to serve in the present matter would be similar to that which would be filed in the Federal Court.  Mr Kerr argued that ABB could hardly claim to be disadvantaged in the present matter if it was dealing with roughly the same evidence in the Federal Court hearing.

Mr Holt provided me with a written summary of his oral submissions at the hearing.  Mr Holt submitted that the delegate's decision of 21 August 1998 did not contemplate any other evidentiary stages than the initial further evidence by Goninan and evidence in response by ABB.  Goninan made no representations at that hearing that evidence in reply to the evidence in response by ABB would be required.  The present application is not properly made out under reg. 5.8(4) but is an application under reg. 5.10(4) and therefore has no basis on which to be called evidence in reply.

Mr Holt further submitted that the present proceedings would be unnecessarily protracted if the present application to serve further evidence was allowed.  Goninan has not yet started preparing the further evidence so that inevitably the case will be protracted.

Mr Holt also argued that, because it is not possible to view the further evidence, the importance or otherwise of the proposed evidence cannot be determined.

Because of the likely protraction to the present proceedings and the lack of any indication of the importance of the proposed evidence, Goninan has not made out its case to support the application for further evidence

Mr Holt submitted that the present application to serve further evidence should be considered under the rules and practice relating to reg. 5.10(4) which would require that the applicant is entitled to serve evidence in response.  If ABB is not allowed to serve evidence in response then it would be required if it sought to respond to the further evidence to apply to serve further evidence itself.  This would allow Goninan the opportunity to object to this application but also would give Goninan an opportunity to serve evidence in response to any evidence that ABB might be allowed to serve.  This would further protract the present proceedings.

DECISION

While Goninan initially applied under reg. 5.8(4) to serve evidence in reply, the subsequent application was made under reg. 5.10(4). There was no disagreement between the parties that the application has been made under reg. 5.10(4). Consequently, I need to consider the requirements provided by reg.5.10(4) in deciding whether or not to allow further evidence to be served.

Subregulations 5.10(4) and (5) of the Patent Regulations 1991 provide the statutory basis for the Commissioner to allow further evidence to be served.  These subregulations are as follows:

"(4)   The Commissioner may:
(a)       on the application of a party; and
(b)       on such reasonable terms (if any) as the Commissioner specifies;
permit the party to serve further evidence on the other party.

(5)   The Commissioner must not give a direction under subregulation ( 1) or grant an application under subregulation (2) or (4) unless the Commissioner:

(a)if he or she proposes to grant an application by a party- is reasonably satisfied that the other party has been notified of the application: and

(b)if he or she proposes to act on his or her own motion- ensures that the parties are notified of the proposed action; and

(c)       in either case:

(i)gives the parties a reasonable opportunity to make representations concerning the application or proposed action; and

(ii)is reasonably satisfied that a direction, an extension of time or the serving of further evidence is appropriate in all the circumstances."

From this, I conclude that I must be reasonably satisfied the serving of further evidence is appropriate in all the circumstances.  If I am so satisfied and I allow the serving of further evidence then I may specify reasonable terms for the service of that evidence.  In the present case such reasonable terms might include a direction that ABB is able to or is not able to serve evidence in response to the further evidence.

In considering what are all the circumstances I need to take into account in being reasonably satisfied on whether the present application is appropriate, I was referred by both parties to some decided cases on applications for serving further evidence.  Mr Kerr referred me to the Micronair v Waikerie case (supra). As Mr Holt noted, this is a case dealing with a request to adduce further evidence under the Patents Act 1952. However, as Mr Holt also noted, cases dealing with applications under reg.5.10(4) of the Patents Regulations 1991 generally refer back to the criteria set out in Micronair v Waikerie with approval.  Mr Holt referred me to Imperial Chemical Industries PLC v Mitsubishi Gas Chemical Co 29 IPR 285 where 5 criteria were identified in relation to considering an application for the serving of further evidence as follows:

1. Has the party applying to serve further evidence shown that the evidence could not have been obtained with reasonable diligence at an earlier stage?

1. Is the evidence such that, if given, it would probably have an important influence on the result of the case?

1. Is the evidence such as is presumably to be believed, i.e. is it apparently credible, though not necessarily incontrovertible?

1. Would allowance of the application to serve further evidence cause unnecessary protraction of the opposition?

1. Would there be any injustice done to the other party?

It seems to me that these factors provide me with guidance when determining whether the application to serve further evidence is appropriate in all the circumstances.  However, they are not necessarily exhaustive of all the circumstances I need to consider.  I will nevertheless consider these factors first.

Has the party applying to serve further evidence shown that the evidence could not have been obtained with reasonable diligence at an earlier stage?

Mr Kerr argued that, as this evidence was intended to be evidence in reply, by its very nature it could not have been served until after ABB had served its evidence in response to the Dalrymple Bay evidence.  Mr Holt submitted that there was no indication that preparation of the evidence had even commenced.

I do think that it is fair to say that the evidence could not have been obtained earlier.  The evidence, according to Mr Kerr, is to be provided by Mr Watkins who has already provided the initial evidence in relation to the Dalrymple Bay system.  I think that it is fair to say that it was not apparent that this evidence needed to be obtained until after the serving of the evidence in response by ABB.

Is the evidence such that, if given, it would probably have an important influence on the result of the case?

Mr Kerr submitted that the evidence probably would have an important influence because it will help to establish, in conjunction with the earlier filed Dalrymple Bay evidence, that the present invention is anticipated.  Mr Holt argued that the further evidence was not available for review so that it was not possible to determine its relevance.

At the hearing, I asked for submissions from Mr Kerr on whether ABB's evidence in response raised any new issues which necessitated further evidence being served by Goninan in order to address such new issues.  Mr Kerr indicated that no new issues had been raised in ABB's evidence in response and the further evidence was only intended to be evidence in reply.

This criterion is not easy to evaluate in the present case because the evidence to be served has not yet been prepared.  I think it is true to say however that, in general, evidence served in reply in accordance with reg. 5.8(4) can and sometimes does have an influence on the result of opposition cases.

I note that the criterion does not require that the evidence would have an important influence on the result of the case.  If that were the question, then I believe that I would have to answer in the negative because I do not have the evidence before me to make such a judgement.

The criterion requires that the evidence would probably have an important influence.  I have quickly perused the Dalrymple evidence and the evidence served in response by ABB.  I am of the opinion that there are serious issues being dealt with in this evidence and that it is possible that evidence in reply to ABB's evidence may be influential.  However, as evidence in reply by its very nature does not raise new issues, I am unable to agree with Mr Kerr that the further evidence would probably have an important influence on the outcome of the case.

However, I note that the test or criterion for the respective relevance of further evidence has been worded differently in other decided cases.   For example in Sue & Anor v Carpenter (1991) AIPC 90-750 the criterion was expressed in the following terms:

"Is the evidence which is proposed to adduce, based on the nature thereof and the grounds as set out in the declaration, relevant to the action, in the sense that it would contribute to a more correct, just, or expeditious result?"

This test is worded in relation to the requirements of the 1952 Act (as was the Micronair decision).  However, in applying it to the present matter, I cannot say that any evidence in reply is relevant to the opposition proceedings in that it would contribute to a more correct, just or expeditious result.  It is not possible to come to any other conclusion without considering the nature of the evidence which of course has not yet been prepared.

Is the evidence such as is presumably to be believed, i.e. is it apparently credible, though not necessarily incontrovertible?

Mr Kerr indicated that the further evidence would be from Mr Watkins, the same declarant who had produced the Dalrymple Bay evidence.  The Dalrymple Bay evidence was credible because the delegate had allowed an amendment to the statement of grounds and particulars and the serving of further evidence in relation to it.  Therefore, evidence by Mr Watkins in reply was also likely to be credible.  Mr Holt maintained that it could not be determined what the further evidence was going to be like because it had not yet been produced.

To the extent that the evidence is to be produced by the same declarant who produced the initial Dalrymple Bay evidence, I agree that it would presumably be credible.  To the extent that any other declarants are used to produce further evidence if the present application to serve further evidence is successful, I cannot assess this criterion.

I find that it is likely that any further evidence produced by Mr David Watkins in reply to ABB's evidence in response would be apparently credible.

Would allowance of the application to serve further evidence cause unnecessary protraction of the opposition?

Mr Kerr argued that Goninan would only require one month from the date of allowance of the application to serve further evidence to actually have the evidence served.  He indicated, as I have previously mentioned, that the evidence would be similar, though not necessarily the same as evidence being filed in the Federal Court matter in relation to the parent patent.  Mr Kerr also was of the view that, as this was meant to be evidence in reply, ABB would not be entitled to serve any evidence in response.  Therefore, there would be little protraction and no unnecessary protraction of the case.  Mr Holt contended that, if ABB was not entitled to serve evidence in response to this further evidence, the only opportunity open to it to challenge any new evidence which might be introduced by Goninan was to seek its own application to serve further evidence. This would prolong the opposition even further.  This would be exacerbated if Goninan then sought to serve evidence in response to this.

I agree with Mr Kerr that, on the face of it, there would not be unnecessary protraction of the case if Goninan served its further evidence within one month of any allowance of the application to serve further evidence for the following two reasons:

• There would be no unnecessary protraction only if ABB was not given the opportunity to serve evidence in response to Goninan's further evidence.  I have not at this stage considered the appropriateness or otherwise of placing any such restriction on ABB.

• In the light of the lengthy nature of the opposition proceedings to date, one month is not significant.  The notice of opposition was filed by Goninan over three and half years ago.

I also think that the one month delay would not cause unnecessary protraction of the case if the evidence was such as to have a significant influence on the outcome of the opposition.  However, I have indicated above that I cannot decide that the further evidence will have a significant influence in the outcome of the opposition.  It seems to me that any extra time taken to serve evidence which is not going to be determinative of the opposition would be unnecessary.  Therefore, I cannot conclude that there will be no unnecessary protraction to the present case. 

Would there be any injustice done to the other party?

Mr Kerr argued that this further evidence was to be evidence in reply.  This was evidence that, in the normal course of events if the Dalrymple Bay system had been included in the original statement of grounds and particulars, Goninan would have been entitled to serve.  It could not be said that ABB would suffer any injustice whether the evidence was served in the normal evidentiary stages or now as further evidence.  Mr Kerr also pointed out that ABB was going to have to deal with similar evidence in the Federal Court hearing in relation to the parent patent.  Therefore ABB was not going to suffer any injustice because of the serving of this further evidence.  Mr Holt submitted that ABB would suffer further delay in the hearing of the substantive opposition if the application to serve further evidence was allowed.  This would be especially the case if it was not allowed to serve evidence in response to the further evidence.

I agree with Mr Kerr that ABB will not suffer injustice to any marked degree if the further evidence is served within one month and that further evidence is strictly in reply to ABB's evidence.

Other circumstances to consider

In applications to serve further evidence which have been allowed both under the 1990 Act and the previous 1952 Act, the purpose of filing the further evidence has always been for one of two reasons.  They are to introduce new evidence in relation to matters which have come to light after previous evidence has been completed or to rebut previous evidence which raises new matters for the first time.  The reason for the present application does not fall into either of these categories.  As I indicated above, Mr Kerr acknowledged that ABB's evidence in response did not raise any new issues.

Another issue which relates in some ways to the question of whether or not the case will be further protracted concerns the reasons behind the introduction of the opposition procedures of regulation 5 in the Patents Regulations 1991. In 1984, the Industrial Property Advisory Committee recommended that pre-grant opposition be abolished because opposition proceedings were frequently used by competitors to delay the grant of a patent. The government of the day rejected the recommendation to abolish pre-grant opposition but the regulation 5 was introduced to streamline the pre-grant opposition procedures to reduce the cost of pre-grant oppositions and to speed up the resolution of those oppositions. This streamlining included the introduction of the need to serve a statement of grounds and particulars to give the patent applicant early warning of the case it had to answer. Regulation 5 allows the amendment of that statement of grounds and particulars so the opponent is able to include issues which arise subsequent to the initial serving of the statement. However, the regulations setting out the evidentiary stages of the opposition proceedings do not specify that the opponent is entitled to serve both evidence in support and evidence in reply in relation to particulars which have been raised after the normal cycle of evidence has been completed. Indeed, the Patents Regulations 1991 no longer specify that the Commissioner is required to allow the other party to serve evidence in response to any further evidence which the Commissioner allows to be served as was required under the Patents Act 1952. To me, this all points to the conclusion that the Patents Regulations 1991 not only do not specify that the opponent is entitled to serve evidence in reply to any evidence the applicant serves in response to further evidence but also that there is no intention that this should be the case. Adding an extra cycle of evidence as a matter of course would not only increase the cost of oppositions but also would slow down the overall proceedings. This was not the intention of the streamlined provisions of the Patents Regulations 1991.

In this respect, Mr Kerr argued that, if the Dalrymple Bay material was included in the original statement of grounds and particulars, Goninan would have been entitled to serve both evidence in support and evidence in reply.  This is true.  However, it was not.  The regulations provide a remedy to allow the opponent a chance to present material which arises later in the proceedings so that the opponent is not shut out from presenting what might be highly relevant material as appears to be the case in the present matter in relation to the initial evidence on the Dalrymple Bay system.  However, that remedy, to my mind, does not extend to providing the opponent with the same rights as if the material was included in the original statement of grounds and particulars.

In taking into account other factors which may need to be considered when the Commissioner exercises a discretionary power, I note the decisions Ferocem Pty Ltd v Commissioner of Patents (1994) 28 IPR 243 and A Goninan & Co Ltd v Commissioner of Patents (1997) 38 IPR 213. While these decisions deal with the Commissioner's discretionary power to extend the time within which to serve evidence in opposition matters, the relevant factors would seem to be equally applicable to the Commissioner's discretionary power to allow the service of further evidence. Factors which these decisions took into account include:

• an explanation of why the evidence was not served at an earlier date;

• the nature and significance of the evidence yet to be served; and

• the interests of the respective parties including that of the public.

In relation to an explanation of why the evidence was not served at an earlier date, I have already dealt with this above.  I am satisfied that Goninan did not realise that further evidence would be needed until after ABB served its evidence in response.

With respect to the nature and significance of the proposed evidence, I have indicated that I am unable to agree with Mr Kerr that the evidence would probably play an important part in the opposition proceedings.  It seems to me that, at best, the proposed evidence would play only a supporting role in the determination of the opposition.

With respect to the interests of Goninan, the serving of the further evidence may bolster its case.  If I refuse the application to serve further evidence, Goninan may therefore be disadvantaged to some extent. I am not convinced that the degree of that disadvantage would be great because Goninan already has served the main evidence in relation to the Dalrymple Bay system.  Because this main evidence is already in, I do not believe that either ABB or the public will be disadvantaged if I refuse the application to serve further evidence.

Is the serving of further evidence appropriate in all the circumstances?

I have found that, in three of the five factors referred to in Imperial Chemical Industries v Mitsubishi Gas Chemical (supra), the further evidence is appropriate under certain conditions.  However, I am not able to agree that the evidence would probably have an important influence on the result of the case. No new issues will be introduced if the evidence is truly in reply.  The evidence is being sought to reinforce matters which have already been raised in the Dalrymple Bay evidence.  Without the evidence before me, I cannot say that it would have any influence at all on the outcome of the substantive opposition.  Because of this, I am also unable to agree that there will be no unnecessary protraction of the opposition if more time was taken to serve the further evidence.

I have also decided that the Patents Regulations 1991 neither specify nor intend that the opponent is automatically entitled to serve evidence in reply after a round of further evidence and evidence in response.

I believe that there will be no disadvantage to either ABB or the public if I do not allow the application to serve further evidence.  I have also decided that, although Goninan may be disadvantaged, the degree of that disadvantage would not be great if the application is not allowed.

Taking all these matters into account, I find that there are insufficient reasons for me to allow the application to serve further evidence.

CONCLUSION

I refuse Goninan's application to serve further evidence.

As all the evidence in relation to the substantive opposition has been served, I direct that the opposition be set down for hearing as soon as possible.

COSTS

As ABB has been successful in its objection to Goninan's application to serve further evidence, I award costs against Goninan.

R Hallett
Delegate of the Commissioner of Patents

Patent attorneys for the applicant  :  Halford & Co., Sydney

Solicitors for the opponent           :  Allen Allen & Hemsley, Sydney