Airsense Technology Ltd v Vision Systems Ltd

[1999] APO 61

OFFICIAL NOTICE

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Application  :          Nos. 689484 in the name of AIRSENSE TECHNOLOGY LTD

Title:          SMOKE DETECTION SYSTEM

Action:          APPLICATION FOR AN EXTENSION OF TIME TO SERVE EVIDENCE AND OPPOSITION THERE TO BY VISION SYSTEMS LTD

Decision:          Issued            .

Abstract

Application for an extension of time under regulation 5.10(2) granted.

The applicant applied for a second extension of time in which to serve the evidence in answer arguing that the staff of its company and its legal team had not previously been able to find sufficient time to assess the opponent's case and prepare evidence to rebut it.  Difficulties were also cited in obtaining evidence from a person skilled in the art in Australia.  Although not a great deal of detail was given it was decided that a proper case had been made out for an extension of time.  Also in view of the fact that the evidence served since requesting the second extension constituted the sole evidence served since the period of evidence in answer commenced it was considered in the interest of the public (as well as the applicants) to grant the extension.

Application for a direction under regulation 5.10(1) to defer evidence in answer refused.

The applicant filed amendments that it argued would simplify and expedite the opposition.
The applicant conceded that evidence in answer could be completed without waiting for the amendments to be finally dealt with.  The benefit obtained for all parties in waiting for the amendments to be allowed was found to be outweighed by the detriment to the opponent caused by the delay and to the Patent Office in preventing expeditious disposal of the opposition.

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent Application No.689484 by AIRSENSE TECHNOLOGY LTD, application for an extension of time under regulation 5.10(2), application for a direction to defer evidence in answer under regulation 5.10(1), and objection thereto by VISION SYSTEMS LTD.

BACKGROUND

Application 72694/94 in the name of Airsense Technology Ltd (herein after referred to as Airsense) was advertised as accepted on 2 April 1998.  Vision Systems Ltd (herein after referred to as Vision Systems) served a notice of opposition on 1 July 1998.

Vision Systems served a statement of grounds and particulars on 1 October 1998.  Evidence in support was completed on 29 December 1998.  Vision Systems served an amended statement of grounds and particulars on 18 January 1999 and the amended statement was allowed without opposition on 12 February 1999.  Evidence in answer was due to be completed on 29 June 1999 after one unopposed extension of time was granted to Airsense.  On 29 June 1999 Airsense requested an extension of time up to 29 September 1999 within which to serve evidence in answer.  This application for an extension was opposed by Vision Systems.

A hearing was held in Canberra on 4 August 1999.  Airsense was represented by Ms Doreen Perrin of Collison & Co.  Vision Systems was represented by Mr Keith Leslie of Davies Collison Cave.

During the hearing Ms Perrin advised that amendments under S104 were being lodged that day and it emerged that Airsense also wished to obtain a direction under regulation 5.10(1) to defer evidence in answer until the amendments were finally dealt with.  Ms Perrin advised that Airsense wished still to continue with its application under 5.10(2). 

In order to allow the opponent adequate time to consider the amendments and the application for a direction under regulation 5.10(1).  I arranged for the applicant and the opponent to provide submissions on the direction under regulation 5.10(1) after the day of the hearing.  The hearing proceeded in relation to the application for an extension under regulation 5.10(2) with the application for a direction under regulation 5.10(1) decided on the basis of the submissions the parties filed after the hearing.

Both parties agreed to a timetable to make representations on the applicant's request for a direction under regulation 5.10(1) to defer evidence-in answer until the proposed amendments had been finally allowed.  The opponent was granted a week of additional time to consider the applicant's submissions prior to filing its submissions.  Submissions were received from both the applicant and the opponent.

THE LAW ON EXTENSIONS OF TIME UNDER 5.10

The time for serving evidence in answer in an opposition is three months from the date of service of evidence in support under regulation 5.8.  This time may be extended under regulation 5.10:

(1)  The Commissioner may, on his or her own motion or on the application of a party:
(a)  give a direction that is not inconsistent with the Act or these Regulations for the
     conduct of proceedings to which this Chapter applies;  or ……

(2)  The Commissioner may:
(a)  on the application of a party in the approved form; and
(b)  on such reasonable terms (if any) as the Commissioner specifies;
extend the time within which the party may take a step prescribed in this chapter, not being a step that is taken under regulation 5.3 or paragraph 5.4(1)(a).

Regulation 5.10(5) provides:

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

(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……
is appropriate in all the circumstances.

The law on extension of time provisions, and specifically the law on regulation 5.10 of the Patents Regulations 1991, has been considered and summarised by Burchett J in Ferocem Pty Ltd v Commissioner of Patents (1994) 28 IPR 243 and more recently by Sackville J in A Goninan & Co Ltd v Commissioner of Patents (1997) 38 IPR 213.  Both of these decisions indicate that regulation 5.10 confers a broad discretion, which cannot be reduced to an imperative compliance with particular requirements.  On the contrary it is necessary to give proper, genuine and realistic consideration to all relevant aspects of the case.  Relevant aspects include:

(a)  The case provided to justify delay and the need for the extension

Relevant reasons include explanations on any delays in filing evidence to date.
The reasons why the evidence was not served in time are a relevant consideration, but a satisfactory explanation is not a mandatory requirement.  However, the power to grant an extension is discretionary and so there needs to be present such facts or circumstances that will enliven the discretion.

(b)  The interests of the parties involved in the opposition

Disadvantages to either the applicant or opponent are relevant considerations.

(c)  The public interest

The public interest in determining a serious opposition on its merits is a relevant consideration.  It is also in the public interest for an applicant to have the opportunity to defend its patent application on its merits.  Another relevant consideration is the efficient and orderly administration of matters before the Patents Office.

The case provided to justify the delay and need for the extension.

The applicant has indicated that the extension of time is required in order to:

(i) prepare a second declaration by Peter Fox

(ii) complete and execute evidence from David Mitchell

(iii) obtain evidence from Mr David Barrett

The applicant states they expect that most of the evidence would be completed early in the proposed extended period and that all the evidence will be finalised before the expiry of the extension period sought.  Since requesting this second extension the applicant has served two statutory declarations by Mr Peter Fox and an affidavit by Mr Alasdair Williamson together with some exhibits.

The applicant describes itself as a small company.  Because of Mr Fox's role in the applicant's organisation, the applicant claimed he had many business commitments which could not be neglected and it has therefore been necessary to balance the need to prepare evidence in answer against many other important and time consuming tasks.  The applicant has retained Australian legal counsel to advise in the matter and that counsel's time has been taken up with Federal Court matters.  These Federal Court matters have been more protracted than expected, running two weeks over time.  The applicant did not state what role, if any, counsel had in the preparation of evidence in answer.

Thus the reasons stated for evidence in answer not being completed in the initial three months and during the first extension of time appear to largely involve the inability of employees in the applicant's company and counsel they have engaged being able to spend enough time on the defense of the applicant's patent because of their other competing concerns. 

The applicant also appears to have difficulty in obtaining evidence from an appropriate person skilled in the art.  The applicant states they have consumed significant time discussing the opposition with a number of people skilled in the art of Australia who ultimately chose not to be involved in the applicant's case.  The applicant was reluctant to burden people with all the documents that had been provided until they were clearly identified as people who were able to partake in the opposition.  It appears this problem may have been at least partly overcome as the applicant now states that it expects to be able to serve evidence in answer from Mr David Barrett, an independent technical consulting engineer based in Australia, if the applicants current request to extend the period for service of evidence in answer is allowed.

I consider it credible that if the applicant is a small company with limited resources the applicant may well find it challenging to organise the defense of its patent application and to identify and obtain evidence from skilled people in the art.  I do not consider though, that this reason is an adequate justification on its own for failing to complete service of evidence in answer during the previous extended period.  However, it does appear to me that the applicant has had considerable difficulties in persuading an independent person skilled in the art in Australia to provide evidence on their behalf.  I should also note that I still have some reservations as to whether the applicant has made all appropriate efforts to complete its evidence in answer during that extended period.  These doubts derive from the limited information provided by the applicant about their efforts to progress completion of service of evidence in answer.

In summary, I have some reservations as to whether the applicant has made all appropriate efforts to complete its evidence in answer, as the applicant has provided little elaboration or detail on their efforts to complete the service of evidence in answer.  Nevertheless, I consider the applicant has provided enough information to indicate that they encountered significant difficulties during their previous extension, in obtaining evidence from a person skilled in the art in Australia. 
Taking into account also that the last extension was the applicant's first and that evidence involving detailed declarations has been subsequently served, I consider that the applicant did not lack diligence in the extended period for service of evidence in answer leading up to the current request.  Again, in regard to the applicant's current request, it is pertinent that since requesting this second extension they have served a number of items of proposed evidence in answer, and stated they expect to complete the remaining evidence during the proposed extended period

On balance, I find that the applicant has made out a proper case for an extension of time. 

The interests of the parties involved in the opposition

It is common ground between both parties that the opposition is serious and it is desirable to resolve the opposition as quickly as possible. 

The opponent has also argued that it has a substantial and established business interest in the supply and manufacture of smoke detection equipment.  The opponent could potentially lose market share as a result of a perception in the market that the monopoly provided by the applicant's patent covers the opponent's product.

It is in the applicant's interest to have the opportunity of presenting all relevant evidence that would allow the opposition to be decided on its merits.  The opponent has raised many issues in the statement of grounds and particulars about the validity of the patent.  The applicant has not provided me in this current request for an extension with much information about the significance of the evidence yet to be finalised and served.  The first request for an extension of time referred to the need to obtain evidence from a technical expert based in Australia.  The current application for an extension of time indicates that evidence is being obtained from Mr David Barrett, described as an independent consulting engineer based in Australia.  As indicated earlier, I infer from this that Mr Barrett's evidence at least, may be significant in providing independent technical testimony in respect to the case to be answered. 

I also have regard to the fact all the evidence served by the applicant is subsequent to filing the current application to further extend the period of service of evidence in answer.  If no extension is granted the applicant will have no evidence in answer included in the hearing and so may be greatly disadvantaged in presenting its case at the substantive hearing.

On balance, I think the interests of the applicant in having the opportunity of presenting relevant evidence that would allow the opposition to be decided on its merits outweigh the interests of the opponent in these circumstances.

The public interest

The question of the public interest in the granting of extensions of time by the Commissioner has been considered in a number of Federal Court decisions.  From these decisions it is apparent that the public interest is ascertained by weighing often conflicting concerns.  For example the public has an interest in both the need for expeditious disposal of matters in the patent office and the concern expressed by Kitto J in Kaiser Aluminium & Chemical v. The Reynolds Metal Company (1969) 120 CLR 136 at 143, viz a serious opposition should be dealt with on its merits rather than be shut out as a consequence of a failure of procedure."  It is also the case that the public has an interest in encouraging innovation and so it follows that the applicant should have the opportunity to defend its patent application on its merits and not have its defense shut out as a consequence of a failure in procedure. 

In weighing up these factors, I am mindful that granting this second extension will cause a further delay of three months before the substantive hearing.  However the applicant has stated that it expects to complete evidence in answer within the period of this extension and with the bulk of the remaining evidence being served early in the period of this proposed extended period.  As mentioned earlier in this decision, since requesting to extend evidence in answer the applicant has served evidence from Mr Fox and Mr Williamson together with some exhibits.  This recent demonstrated progress in serving evidence in answer persuades me to accept the applicant’s submission, that the applicant is in a position where it can expect to complete service of evidence in answer if an extension is granted. 

I am also mindful that no evidence in answer has yet been served within the extended period currently granted for evidence in answer.  A number of items of proposed evidence in answer have since been served by the applicant.  There is public interest in the applicant not being entirely shut out from presenting any of its evidence.  Furthermore, these recent pieces of evidence appear on a superficial reading to be of potential significance in the substantive opposition.  Overall, I think the public interest in this instance favours the applicant being granted an extension of time to complete evidence in answer. 

CONCLUSION ON THE APPLICATION UNDER REGULATION 5.10(2)

The applicant has made a proper case for an extension of time.  The public interest and the interest of the applicant favour allowing the applicant time to prepare and serve such evidence as will allow the case to be decided on its merits.  These interests overwhelm those of the opponent in the circumstances before me.  I am satisfied that the extension of time is appropriate in all the circumstances.  I grant the applicant the extension of time to serve evidence in answer.

PROPOSED AMENDMENTS AND DIRECTION UNDER REGULATION 5.10(1)

Regulation 5.10(5) requires that the Commissioner must not give a direction under 5.10(1) without giving the parties a reasonable opportunity to make representations concerning the application or proposed action, and unless the Commissioner is reasonably satisfied that a direction is appropriate in all the circumstances.

The applicant is seeking a direction under regulation 5.10(1)(a) to defer the requirement to file or prepare evidence- in-answer until after the proposed amendments have been allowed or otherwise disposed of.  The effect of this direction is to extend the period of evidence in answer, and so I think that guidance on the appropriate considerations in giving such a direction can be obtained from the body of law on extensions of time including extension under regulation 5.10(2). 

As outlined earlier in this decision the law on extension of time provisions, and specifically the law on reg. 5.10 of the Patents Regulations 1991, has been considered and summarised by Burchett J in Ferocem Pty Ltd v Commissioner of Patents (supra) and by Sackville J in
A Goninan & Co Ltd v Commissioner of Patents (supra).  I consider the approach outlined in these decisions is applicable to the question of deferring the period in which to serve evidence as well as to extending the period to serve evidence.  Considerations in making a decision on this request for a direction under 5.10(1) therefore include:

(a)   The case made justify the deferral

(b)  The interests of the parties involved in the opposition

(c)  The public interest

Case made to justify to deferral

The applicant seeks to defer evidence in answer until the amendments it has filed have been accepted or finally dealt with.  The opponent has argued that the applicant should be able to file its remaining evidence including any evidence based additionally on the proposed amendments without having the period for serving evidence in answer deferred.  The applicant has conceded that it expects to be able to file its evidence in answer irrespective of the proposed amendments within the extended period applied for under regulation 5.10(2).  The applicant however would prefer to complete evidence in answer after the amendments have been allowed.

The applicant has argued that the proposed amendments serve to focus the opposition and to eliminate matter not central to the applicant's invention.  The applicant's arguments therefore indicate that the amendments are not made in an effort to resolve the opposition but rather are a fine tuning of the claims directed at simplifying the substantive opposition.  I consider that any action taken to simplify the substantive opposition is laudable.  However there are no submissions by either party that the current claims are so unclear or complex as to cause great difficulties in the opposition.  There are no submissions that indicate that the proposed amendments should largely overcome the substantive issues raised by the opponent.  From the information provided I cannot find any compelling benefit in the facilitation of the substantive opposition from deferring evidence in answer until the amendments are finally allowed.

The applicant has argued that the amendments are not trivial in nature.  I am not convinced that this is so, at least in any sense that has much bearing on an application for deferment of evidence in answer.  In the context of the applicant's application for a direction to defer evidence in answer, I might consider amendments to be "non trivial", for example, if the amendments are likely to resolve the opposition or overcome significant grounds of opposition.  It may also be relevant if the amendment have a dramatic effect on the case the applicant needs to prepare, although due regard must also be had to the fact that the evidence in support served by the opponent is entirely directed at the claims as accepted. 

The applicant's amendments result in reduction of the number of claims from 28 to 7 and have introduced some features into two independent claims.  Superficially it would appear that the main change to the independent claims is that, the "main ducts means" is now a "main duct means in the form of a sampling duct means of a smoke detection system".  As the applicant's patent is titled "Smoke detection system" the new claims may well better define the invention.  Nevertheless neither the applicant's submissions or my own brief assessment of the amendments convince me that the amendments will produce a change that justifies deferment of evidence in answer.

I find that the applicant has not put forward a proper case justifying a direction to defer evidence in answer.

The interests of the parties involved in the opposition

The applicant submitted that if the applicant is required to prepare and submit evidence in answer on the claims as accepted, the applicant will necessarily be required to prepare and submit material that on the basis of the amended claims may be considered superfluous.  I accept that this is a disadvantage to the applicant.  However as the applicant has indicated that their evidence in answer is in an advanced state of readiness it therefore appears to me that there is not a great deal of preparation yet to be done.  Also while the extra work may be superfluous, it may also not be superfluous so the detriment is potential rather than definite.  In any case the amendments are made at the applicant's own behest and at a late stage in the opposition process.  In these circumstances I do not think it is appropriate to place a lot of weight on this potential disadvantage to the applicant.

Even if the Commissioner does not direct that evidence in answer is deferred until the amendments have been accepted, the applicant has stated that they still expect to complete evidence in answer. 

The applicant has submitted that it is appropriate that both parties know with certainty the form of the claims that are to be the subject of further opposition proceedings.  Although the opponent has not made submissions on this point, I accept there is some benefit in both the parties having greater certainty on the form of the claims being heard in the substantive opposition. 

The opponent has indicated that it greatly desires to resolve the opposition as quickly as possible and has cited potential damage to its' commercial interests as one reason the opponent wishes to avoid delay.  The impact of giving a direction so that evidence in answer is deferred is that the substantive opposition is delayed for a period much longer than the extension that the applicant seeks under regulation 5.10(2).  The opponent has expressed considerable concern with even this lesser delay.

On balance I think in this case the potential detriment that the opponent may suffer if evidence in answer is deferred, outweighs the benefits that may be derived from a greater certainty on the form of the claims during and following the stage of evidence in answer.  This detriment also outweighs the detriment that the applicant may suffer in preparing possibly superfluous material and submissions.

The public interest

The public has an interest in both the need for expeditious disposal of matters in the Patent Office and in the applicant having the opportunity to defend its patent on the merits and not have its opportunity to present appropriate evidence shut out as a consequence of a failure in procedure.  The need for an expeditious disposal of matter in the patent office weighs against issuing a direction to defer evidence in answer and prolonging the evidentiary stages of an opposition unless countered by other benefits such as resolution of the opposition. 

The applicant has argued that the affect of issuing the direction to defer evidence in answer will be to simplify and expedite the substantive opposition.  I accept that this may be so, but I am not convinced that this is of greater benefit to the public interest than the expeditious disposal of the evidentiary phases of the opposition.

If evidence in answer is not deferred until the amendments are accepted or disposed of the applicant can still complete evidence in answer.  Thus this is not a case where I must weigh the cost of having the applicant's defense shut out if no direction under regulation 5.10(1) is issued. 
I therefore consider that the public interest weighs against the issuing of a direction under 5.10(1) to defer evidence in answer.

CONCLUSION ON THE APPLICATION FOR A DIRECTION UNDER REGULATION 5.10(1)

I have found that the applicant has not made out a proper case for a direction to be issued under regulation 5.10(1) to defer evidence in answer.  I find in this case that the possible detriment to the opponent's interests if the substantive opposition was delayed by this proposed direction outweighs the possible detriment caused to the opponent's and applicant's interests by the increased uncertainty on the form of the claims that will be heard in opposition.  The public interest also weighs against issuing a direction under regulation 5.10(1).  I therefore refuse to issue a direction under regulation 5.10(1).

COSTS

Costs normally follow the event.  Airsense has succeeded in obtaining an extension of time under regulation 5.10(2).  But Vision Systems was successful in opposing Airsense's direction under regulation 5.10(1).  I also take into account Airsense's conduct in which they appeared to have unnecessarily delayed the decision on their application under 5.10(2) because of the manner in which they filed amendments and introduced without prior notice their application for a deferment of evidence in answer during the hearing.  For these reasons I think it is appropriate to not to make an award of costs.

Ross Osborne
Delegate of the Commissioner of Patents

Patent attorneys for the applicant  :    Collison & Co, Adelaide

Patent attorneys for the opponent   :  Davies Collison Cave, Melbourne