Acres Gaming, Inc and IGT (Australia) Pty Limited v Aristocrat Technologies Australia Pty Ltd - [2003] APO 19

OFFICIAL NOTICE
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 748263 in the name of ACRES GAMING, INC. AND IGT (AUSTRALIA) PTY LIMITED

Title : OPERATION OF GAMING MACHINES IN A
LINKED BONUS PRIZE WINNING MODE

Action: An application for an extension of time by ARISTOCRAT TECHNOLOGIES AUSTRALIA PTY LTD to serve evidence in support under regulation 5.10(2) and an objection thereto by ACRES GAMING, INC. AND IGT (AUSTRALIA) PTY LIMITED

Decision: Issued 17 April 2003.
Abstract

Found that the opponent had provided sufficient details supporting a case, which justified the requested extension of time. Regarding the public interest three different aspects had been considered. In the matter of the need for the Commissioner to ensure that invalid patents are not granted, the public interest would clearly favour a grant of an extension of time. In the consideration of the nature of the evidence the opponent seeks to adduce and the significance of that evidence for opposition proceedings, it was found that from a consideration of the statement of grounds and particulars, an extension of time would clearly be in the public interest. Against this, the need to ensure that proceedings are not unduly protracted would require that the request for an extension be refused but as the protraction has not been shown to be undue, a refusal of the extension would be unjustified. In the matter of the private interests of the parties, the opponent’s interests were best served by the grant of an extension, whereas the applicant’s interests were best served by a refusal of the extension.
Finally after due consideration of all relevant matters, the granting of an extension of time to 28 May 2003 to the opponent to file evidence in support was found to be appropriate in all the circumstances.
Costs (in accordance with Schedule8 of the Patents Regulations) awarded against the applicant Acres Gaming, Inc. and IGT (Australia) Pty Limited and in favour of the opponent Aristocrat Technologies Australia Pty Ltd.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No. 748263 by ACRES GAMING, INC. and IGT (AUSTRALIA) PTY LIMITED and an opposition under Section 59 of the Patents Act 1990 by ARISTOCRAT TECHNOLOGIES AUSTRALIA PTY LTD. An application for an extension of time by ARISTOCRAT TECHNOLOGIES AUSTRALIA PTY LTD to serve evidence in support under Regulation 5.10(2) and an objection thereto by ACRES GAMING, INC. and IGT (AUSTRALIA) PTY LIMITED

BACKGROUND

Patent application 64844/98 entitled "Operation of Gaming Machines in a Linked Bonus Prize Winning Mode" was filed on 11 May 1998 by Acres Gaming, Inc. and IGT (Australia) Pty Limited. The application was advertised accepted on 30 May 2002 and assigned the number 748263. Aristocrat Technologies Australia Pty Ltd filed a notice of opposition on 29 August 2002 and its statement of grounds and particulars on 29 November 2002.
The time for filing evidence in support was due to expire on 28 February 2003. Aristocrat filed an application for an extension of time till 28 May 2003 to file the evidence in support of their opposition. This was opposed by Acres, resulting in this hearing.
The matter was heard in Canberra on 9 April 2003. The applicant appeared via telephone. Robert Miller, patent attorney, assisted by Gideon van Rensburg, patent attorney, both of Spruson & Ferguson, Sydney, represented the applicant. Charles Berman, patent attorney, F B Rice & Co, appearing in person, represented the opponent.
THE APPLICATION FOR EXTENSION
I have summarised the opponent's submissions in their application for extension of time as follows:
1. A major obstacle to finalisation of the evidence in support arose from the directed amendment of the statement of grounds and particulars. This had arisen as a result of the applicant seeking further and/or better particulars. The matter had not yet been resolved.
2. If, as a result of the amendment of the statement of grounds and particulars, the opponent was not going to be allowed to rely on certain grounds, then it would be unreasonable to put the opponent to the expense of obtaining evidence in respect of grounds and particulars on which the opponent would be precluded from relying.
3. The opponent has collected a large volume of evidence (as is evident from the statement of grounds and particulars) and they have identified a witness, Mr Les Gosden to act as its expert in this matter. However due to uncertainty surrounding the statement of grounds and particulars as well as the intervening Christmas holidays, the opponent has not yet had an opportunity of meeting Mr Gosden to finalise his evidence. This has been compounded by the fact that Mr Gosden has taken up a new job, which requires him to spend large amounts of time, interstate as well as overseas.
4. The Evidence in support is the only opportunity available to the opponent to present its evidence. It is therefore in the public interest that the opponent be afforded the opportunity to prepare and submit its case comprehensively.
SUBMISSIONS
Both parties provided copies of their submissions via facsimile prior to the hearing. I shall refer to the submissions from both parties, wherever relevant, in my decision.
DECISION
The requirements for granting an extension of time to serve evidence are set out in Regulation 5.10 of the Patents Regulations in force under the Patents Act 1990. In particular, subregulation 5 requires:
"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 before I can grant an extension of time I must be reasonably satisfied that the extension of time is appropriate in all the circumstances.
Regarding the factors that must be considered some guidance is provided by Burchett J in the Federal Court decision of Ferocem Pty. Ltd. v Commissioner of Patents 28 IPR 243:
“The determination of an application for an extension of time under reg. 5.10(2) involves a balancing exercise, in which competing considerations must be taken into account. There are interests of the persons directly concerned in the application and opposition in question. There are also public interests, which are not necessarily ranged on the same side. They include the expeditious disposal of matters in the Patents Office, and questions of costs, of efficiency, and of insistence upon proper professional standards being maintained by those who deal with the office. But they also include, as Kitto J pointed out in Kaiser Aluminum & Chemical Corporation v The Reynolds Metal Co (1969) 120 CLR 136 at 143, “the public interest that a serious opposition by a person entitled in fact to oppose the grant of a patent should be dealt with on the merits, rather than it should be shut out in consequence of a failure of procedure, lamentable though the failure may be”. This proposition was cited by Bowen CJ in Vangedal-Nielsen v Smith (Commissioner of Patents) (1980) 33 ALR 144 (at 150), where he also set out some of the considerations involved upon an application for an extension of time.”
Considerations arising from this judgement, which are relevant to an extension of time, are:
a)The Commissioner, before allowing an extension, must consider whether the
person seeking the extension has made a proper case justifying the extension
(though lack of a proper case does not necessarily mean that an extension will be
refused); and
b)        The Commissioner must consider not only the private interests of applicants for
           patents and opponents, but also the public interest, by ensuring that invalid patents
           are not granted, and that proceedings are not unduly protracted.
These considerations were also raised in A Goninan & Co Ltd v Commissioner of Patents (1997) 38 IPR 213 (and more recently in National Starch & Chemical Company vCommissioner of Patents [2001] FCA 33). In that (National Starch (supra)) judgement, with regard to the public interest, Sackville J stated:
“The decision-maker still has to consider whether an extension to allow further evidence is appropriate, having regard to the public interest in having a serious opposition determined on the merits. Of course, that aspect of the public interest must be weighed with and against other relevant considerations, including the absence of any satisfactory explanation for the failure (or failures) to comply with the time limits specified in the Regulations.
In order for the Commissioner or his delegate to give proper, genuine and realistic consideration to the aspect of public interest I have identified, it is necessary to consider the nature of the evidence the opponent seeks to adduce and the significance of that evidence for the opposition proceedings. I do not mean to suggest that the evidence has to be scrutinised in the same way as would occur at a hearing on the merits. But unless the delegate forms a view as to the issues addressed by the proposed evidence, and whether that evidence is likely to be important in the opposition proceedings, it is difficult to see how proper consideration can be given to the public interest in having such proceedings being determined on its merits.”
All relevant matters must be taken into consideration. The absence of a satisfactory explanation of the delay does not preclude an extension of time being granted if an extension is appropriate in the circumstances (Ferocem (supra)).
Justification For The Extension
Both parties were in general agreement regarding the law applicable to the consideration of the application for an extension of time to file further evidence. They referred to various cases including Ferocem (supra) and Goninan (supra). In order to determine whether the opponent has made out a proper case justifying the extension it seeks, I shall have regard to the teaching of Sackville J in A Goninan & Co Ltd v Commissioner of Patents (supra):
"Nor do I think there is any substance in the contention that the finding that the first application was not properly based was "wholly irrelevant" to the determination of the second application. One of the factors to be taken into account in determining whether a further extension should be granted was the extent of any delay in filing evidence and whether Goninan had offered a satisfactory explanation for the delay, or any part of it. As Ferocem shows, this consideration cannot be regarded as paramount in the sense that it forecloses proper consideration of other relevant factors. But it was clearly a relevant factor in the delegate's deliberations and he was entitled to take into account that at no stage had a satisfactory explanation for the delay been forthcoming."
The opponent's submissions indicate that there were two major issues to be considered as reasons for requesting the extension. The first related to the request by IP Australia for the opponent to supply further and better particulars. The second issue related to delays faced by the opponent in seeking to obtain expert evidence to support their opposition.
Further and Better Particulars:- The applicant had objected to the opponent's statement of grounds and particulars by a letter dated 11 December 2002 and the opponent was informed of this by a letter dated 17 December 2002. The matter was finally concluded with a direction issued by IP Australia dated 5 March 2003 requesting that further and better particulars be filed by the opponent in respect of the grounds of: - Manner of manufacture, Inventive Step, Section 40-Best method of performance and Section 40-Fair Basis.
I have considered the requirements set out in the direction of IP Australia to the opponent dated 5 March 2003. The matters were not such as to drastically alter any of the particulars originally raised by the opponent. I note that the applicant's initial request for further and better particulars also requested that certain grounds should not be available for the opponent to raise at the opposition in view of the inadequate particulars supplied. Thus the issue of concern to the opponent until 13 February 2003 were, whether certain grounds would not be available for the opposition to argue at the hearing.
The applicant made the following submissions relating to these issues:
·    The submission that evidence could not be prepared until the matter of directions relating to the statement of grounds and particulars was resolved is wrong in law and demonstrably wrong in fact.
·    There is nothing in the regulations that dictate the statement of grounds and particulars must be finalised before any evidence is served. Amendment of the statement can occur at any time in the evidentiary timetable, even in terms of further evidence. The opponent could have sought a Direction from the Commissioner (which may or may not have been given) as to the serving of evidence, but consciously chose not to.
·    The opponent's attorneys should know what level of particularisation is required and in two instances of the direction provided the particulars were known all along.
The matter of the possible non-availability of grounds was subject to the opponent furnishing further and better particulars and thus entirely within their hands. I do not consider this was a major issue, which would delay the preparation of evidence for the grounds of opposition.
Delays in obtaining expert evidence:- The opponent stated at the hearing that they had retained the services of a suitable witness (Mr Les Gosden) by way of a letter dated 20 December 2002. The opponent had submitted (in the request for extension of time) that "due to uncertainty surrounding the statement of grounds and particulars as well as the intervening Christmas holidays, the opponent has not yet had an opportunity of meeting Mr Gosden to finalise his evidence. This has been compounded by the fact that Mr Gosden has taken up a new job which requires him to spend large amounts of time interstate as well as overseas." The opponent also stated in the statutory declaration of Mr Charles Berman dated 8 April 2003 that:
·Meeting with Mr Gosden after his engagement as an expert witness (on 20 December 2002) was put on hold due to the Applicant's objection to the Opponent's statement of grounds and particulars. The meeting was put on hold until the statement of grounds and particulars, more particularly, aspects dealing with particularising a person skilled in the art had been finalised.
·Mr Gosden commenced a new job on 10 February 2003,
·Mr Gosden worked in Adelaide from 17 February 2003 until 28 February 2003,
·Mr Gosden spent 10 days in New Zealand from 14 March 2003 to 25 March 2003.
The opponent submitted that they had been unable to finalise the evidence due to their inability to meet Mr Gosden for discussions.
The applicant made the following submissions regarding the delays:
· At the time the opponent applied for their extension of time they already had at least 6 months to prepare their evidence (the notice of opposition was filed on 30 August 2002).
· There is nothing in the reasons for the extension application which indicates that the attorneys for the opponent have moved expeditiously to complete the evidence in support. The reasons advanced are far from full and frank. We have just received at the hearing a statutory declaration regarding the reasons for the delay. There was no active pursuit of the expert witness and no indication that any alternatives were sought.
The opponent stated that the statement that they had six months to prepare the evidence was incorrect. They said that they had to prepare the statement of grounds and particulars after filing the notice of opposition and also respond to the objection by the applicant to their statement of grounds and particulars. Further expert witnesses were not easily available as most worked for private companies which placed them in a "conflict of interest" situation when providing expert evidence. Mr Gosden had been selected as he was an independent consultant at the time. However shortly thereafter he sought employment and only after he had received permission to supply expert evidence did he commence his employment.
Given the above submissions I am satisfied that the opponent has provided a full disclosure of the circumstances surrounding the delay in providing the evidence in support of their case. They had been able to select a suitable witness shortly after filing the statements of grounds and particulars, but due to various circumstances, which also required their attention, they had been unable to finalise the evidence. After due consideration of the circumstances outlined in the submissions above from both parties I am satisfied that the opponent has made out a proper case justifying the extension it seeks. However I also need to consider the private interests of the parties in this matter as well as public interests before deciding whether or not an extension of time is appropriate in all the circumstances.
The Public Interest
The first issue in this matter is for the Commissioner to ensure that invalid patents are not granted. This can best be done when both parties have had the opportunity to provide evidence supporting their case. The opponent has filed its statement of grounds and particulars but has not filed any evidence in support. Consequently the stages of service relating to evidence in answer and evidence in reply cannot proceed.
The applicant submitted that in the circumstance where an extension to file evidence in support was refused, "…the public interest is not disadvantaged to any significant degree and the public is protected against an invalid patent being granted by the fact that the Patent Office can take into account the documents listed in the Statement (if they have any relevance) in a re-examination". The applicant was indicating that the 17 references relied on in the statement of grounds and particulars, of which 16 were patents and 1 was a brochure, would be available to the Commissioner. However in this case the Commissioner does not have the benefit of expert evidence which may be relevant to a proper determination against all the grounds raised in the opposition. The public interest relating to this first issue would clearly favour a grant of an extension of time to enable the opponent to file evidence in support.
Another aspect of the public interest I have to cover (arising from the teaching of A Goninan & Co Ltd v Commissioner of Patents (supra)) lies in a consideration of the nature of the evidence the opponent seeks to adduce and the significance of that evidence for opposition proceedings. The opponent has only filed a statement of grounds and particulars in this matter. The Commissioner has directed that further and better particulars be supplied. In support of the grounds of novelty and inventive step 17 documents have been cited. Detailed submissions have also been provided relating to section 40(2) considerations relating to clarity. Having considered the statement of grounds and particulars I am satisfied that a serious opposition is in train even though the opponent has not yet filed their evidence in support. The grounds of novelty and inventive step would require expert evidence for establishing the state of the art and what constituted the common general knowledge in Australia at the relevant date (see National Starch (supra) at para 29). I consider that the filing of evidence in support consistent with the statement of grounds and particulars, is clearly of significance for a proper determination of the opposition and therefore definitely in the public interest. Thus a refusal of the extension would work against a proper determination of the opposition and thus go against the public interest.

Against this, the other factor I must consider deals with ensuring that proceedings are not unduly protracted. The opponent has previously had no extensions of time. They are seeking a three months extension. The opponent’s submissions in this matter indicate that they have retained an expert witness. They have also been in touch with the witness but have so far been unable to meet to finalise their evidence. I consider that this delay in filing the evidence will protract the proceedings, as the applicant has to wait till the filing of evidence in support is completed. In view of the fact that, this is the first request for an extension of time for filing of evidence in support, I consider that this protraction will not be undue. Therefore I consider that the resulting protraction in proceedings is clearly not against the public interest and favours a grant of the request for an extension of time.
The Private Interests Of Applicants For Patents and Opponents
The private interests of the applicant in this matter will best be served when it is able to defend its patent application. A proper determination of the opposition (either a grant/refusal/suggested amendments to the specification) will help it with determining future actions in respect of its patent application. At this juncture the applicant has only the notice of opposition and a statement of grounds and particulars available to it. I note that IP Australia has issued a direction to the opponent to supply further and better particulars. In the absence of detailed submissions from skilled witnesses of the opposition, the applicant is disadvantaged in that it does not have the full case before it that it has to answer. Also any unnecessary protraction of the opposition proceedings is to the applicants' disadvantage, as it cannot proceed to a full commercial exploitation of its patent application. I conclude that a delay in the proceedings is clearly against the interests of the applicant.
The opponent's case would clearly be prejudiced if I were to refuse the extension and thus preclude it from serving any evidence in support of the opposition. The stages of the serving of evidence in answer and evidence in reply would then proceed in the absence of arguments and expert evidence from the opponent in the matters of novelty, inventive step, section 40/fair basis and manner of manufacture. This could potentially impact on the rights of the opponent and public at large in terms of the monopoly finally granted. The opponent's interests clearly lies in a proper determination of the validity or otherwise of the patent application and a clear indication of the monopoly ground if any that they cannot encroach upon. I conclude that the opponent's interests lie in obtaining an extension of time to enable it to file evidence in support of its opposition.
Is The Extension Of Time Appropriate In All The Circumstances?
I shall now consider the various factors and how they impact on a final decision in this matter. I had found that the opponent had provided sufficient details supporting a case justifying an extension to file evidence in support. In the matter of the private interests of the parties, the opponent’s interests were best served by the grant of an extension, whereas the applicant’s interests were best served by a refusal of the extension.
Regarding the public interest three different aspects had been considered. In the matter of the need for the Commissioner to ensure that invalid patents are not granted, the public interest would clearly favour a grant of an extension of time. In the consideration of the nature of the evidence the opponent seeks to adduce and the significance of that evidence for opposition proceedings, I found that from a consideration of the statement of grounds and particulars, an extension of time would clearly be in the public interest. Against this, the need to ensure that proceedings are not unduly protracted would require that the request for an extension is refused but as the protraction has not been shown to be undue, a refusal of the extension would be unjustified.
Having looked at the above, I find that five factors favour grant of an extension whereas one factor favours a refusal of the extension. However not all factors may be considered to be evenly weighted in this regard. I consider that the public interest lying in the need for the Commissioner to ensure that invalid patents are not granted does carry a substantial weight. It affects the public, the applicant and the opponent, as the grant of invalid patents may prevent the public from practising what they may be entitled to do and could also possibly lead to revocation actions. The filing of evidence in support by the opponent at this stage has been delayed by over a month, which is not unduly long. After due consideration of all relevant matters, I consider that the granting of an extension of time to the opponent until 28 May 2003 to file evidence in support would be appropriate in all the circumstances. At the time of issuing this decision, I am not aware that the opponent has as yet filed any evidence. Consequently I grant the opponent an extension of time up to 28 May 2003 to file evidence in support.
COSTS
Usually in actions such as this costs follow the event. Both parties submitted that costs should follow the event. In this instance the opponent has made out a proper case justifying the extension sought. The extension sought has been granted after taking all relevant considerations into account including consideration of the public interest. In these circumstances I believe it is appropriate to award costs (in accordance with Schedule8 of the Patents Regulations) against the applicant Acres Gaming, Inc. and IGT (Australia) Pty Limited and in favour of the opponent Aristocrat Technologies Australia Pty Ltd.
Jacob Elijah
Delegate of the Commissioner of Patents
17 April 2003
Patent attorneys for the applicant : Spruson & Ferguson, Sydney
Patent attorneys for the opponent : F B Rice & Co, Sydney