American National Can Co. v W.R. Grace & Co.-Conn

[1994] APO 29

official notice

decision of a delegate of the commissioner of patents

Application        :    No. 571175 in the name of AMERICAN NATIONAL CAN COMPANY

Title:    Polymeric and film structure for use in shrink bags

Action: Opposition under section 59 of the Patents Act 1952 by W.R.GRACE & CO. -CONN;  award of costs

Decision:    Issued  
Costs awarded against the applicant.

patents act 1990

decision of a delegate of the commissioner of patents

Re:Patent Application No. 571175 by AMERICAN NATIONAL CAN COMPANY, and Opposition thereto under section 59 of the Patents Act 1952 by W.R.GRACE & CO. -CONN

background

Patent application number 12308/83 in the name of American National Can Company was advertised accepted on 14 April 1988 and assigned the number 571175.  A notice of opposition to the grant of a patent was lodged on 13 July 1988 by W.R.Grace & Co. -Conn.

The matter was heard in Canberra on 28 and 29 September 1993, and a decision issued on 10 January 1994.  In that decision I made the following statement with regard to costs:

"At the hearing it was agreed between the parties that I should invite written comments with regard to costs after the decision had been given.  I agreed with this course of action.  Consequently, I allow both parties four weeks from the date of this decision in order to file written submissions with regard to costs.  I will then issue a separate decision with regard to costs."

Both parties filed submissions with regard to costs.

SUBMISSIONS

The patent attorney for the opponent filed submissions in a letter dated 21 January 1994.  That letter stated in part:

"We hereby submit that costs should be awarded against the applicant and that costs should include Counsel's fees, travel and accommodation.

Notwithstanding that leave to amend the claims was given, the claims which were considered by the Delegate of the Commissioner were held to be invalid.

The decision of the Delegate of the Commissioner of Patents concluded that the opposition succeeded on the grounds that the specification did not meet the requirements of Section 40 and that the claims are prior claimed.  In addition it was held at page 19 that the claims as presently drafted are not restricted to heat shrink films.  As a result, the claims as drafted are not directed to a manner of new manufacture.  Also it was stated at page 16 when analysing the obviousness of the claims that the claims as drafted are not directed to the invention in that they omit the feature of heat shrink films, and the claims will have to be amended to incorporate that feature.  Accordingly obviousness was assessed assuming that the feature of heat shrink is included.  It is implied from this that the claims as currently drafted are obvious.

Accordingly we submit that the opponents were successful on every ground of opposition proceeded with at the hearing i.e. those listed on page 10 of the decision.

As a general rule costs follow the event (Australian Patent Office Manual of Practice and Procedure, Part 14.1).  Office practice has been that so long as a successful ground of opposition is a substantial objection, costs are awarded against the applicant, with no qualifications (Manual of Practice and Procedure, Part 14.7.4)."

The patent attorney for the applicant filed submissions in a letter dated 10 February 1994.  That letter stated in part:

"It is the Applicant's position that the opponents were unsuccessful in each of the substantive issues that were considered during the opposition.  Considering the decision in the order in which they are referred to, we provide the following comments:

i)  a)  The opponents were concerned about the clarity of claim 6.  It was held by the Delegate that there were clarity difficulties with this claim as a result of amendments that were filed 6 July 1992.  The Opponents were provided with a copy of the amended claims with a copy of our letter of 6 July (copy enclosed).  At the same time, the Opponents were invited to withdraw the opposition, and the Applicant would meet the Opponents' costs at that time.  The Opponents declined, and were also offered an opportunity to comment upon the amendments with a letter from the Office dated 13 July 1992.  The Opponents also declined to comment at that stage.  It was not until the hearing that the Opponents first drew the attention of both the Applicants and the Office to the clarity difficulties.  If the difficulties were of particular concern to the Opponents, they could have raised the matter at an earlier stage, and avoided protracting the hearing as they did.  The clarity difficulties of claim 6 were not a substantial issue, and did not justify attendance at a hearing to clarify these difficulties.

b)  The Delegate also considered the claims were not fairly based as they were not restricted to heat shrink films.  The Applicant was invited to amend the claims to refer to heat shrink films.  It was however, the submission of the Applicant that the claims were so limited, as it was inherent from the teaching of the specification as a whole.  The Delegate was merely confirming this position, and it was not a point of dispute between the Opponent and the Applicant.

c)  The Opponent was unsuccessful in arguing that claim 6 was not fairly based as it did not include the best method of performance.

ii)     In relation to the substantive ground of obviousness, the Delegate did not consider that the Opponent had established that the invention was obvious.  It was the Opponent's position that the application was manifestly invalid as it was obvious in light of prior art which was referred to extensively in their submission.  However, they failed to establish that such prior art formed part of the common general knowledge of the skilled addressee in the field of the present invention. ...

iii)     The Delegate also considered the ground of manner of new manufacture, and considered that once the claims had been amended in order to clarify the invention by restricting to heat shrink films, that the claims were directed to a manner of manufacture.

iv)     The opponents were partially successful on the ground of prior claiming in that the Delegate had given a construction to the term "adhered to" to include "adhered directly to" and "adhered by the use of an adhesive layer".  It was the submission of the Applicant that this term should have only been construed as meaning adhered directly to, and an opportunity was provided in order to ensure that the claims clearly reflected this position.  The Opponent was only successful in having claim 1 amended to reflect what the Applicant considered to be the invention.  If this was their objective, it could have been achieved at an earlier stage.

Claim 6 was prior claimed only to the extent where the outer layer includes 20% LLDPE and 80% EVA.  Again, if it was the Opponent's intention to have the Applicant remove the overlap in claim 6, this could have been achieved at an earlier stage.  The Delegate considered that claim 13 was not prior claimed.

It is clear that the Opponent was only successful in having the claims improved for lack of clarity.  This extends not only to their position on Section 40 matters, but also to their position on prior claiming, fair basis and manner of manufacture.  The end result will be that the claims will be amended to a form which the Applicant considered was where the invention resided. ...  Applicants seek costs in this matter, as the Opponent was only successful in establishing a minor part of its case."

The parties were allowed 10 days to comment on the submissions.  The patent attorney for the applicant responded in a letter dated 24 February 1994.  That letter stated in part:

"The Opponent's assertion that they were successful on every ground of opposition proceeded with at the hearing including each of the substantial objections is clearly taking a very liberal interpretation of the decision.  The Opponents were successful concerning Section 40 difficulties and to a lesser extent with their prior claim objection.  Any other "success" which the Opponents claim to have had stemmed as a result of the Section 40 difficulties in particular."

The patent attorney for the opponent responded in a letter dated 28 February 1994.  That letter stated in part:

"The Decision of the Delegate of the Commissioner of Patents provided 4 weeks from the date of the decision in order to file written submissions with regard to costs.  The date of the decision was 10 January 1994 and therefore the period for filing written submissions with regard to costs expired on 7 February 1994.  Accordingly, the applicant's submissions, which are dated 10 February 1994 were lodged out of time and we submit should not be taken into consideration.

As the applicant's submissions as to costs were lodged out of time and should not be taken into consideration, the opponents do not propose making comments on the submissions.  If, however, the Hearing Officer proposes to take the applicant's submissions for costs into account then we request further time to make comments on the applicant's submissions."

I contacted the patent attorney for the opponent by telephone on 4 March 1994 and informed her that any decision on whether I would have regard to the submissions of the applicant would be made in my written decision.  The patent attorney undertook to file comments by the end of the next working day.  Comments were filed in a letter dated 7 March 1994.  The letter reiterated that the opponent was successful on all grounds of opposition. In addition, the letter stated in part:

"Applicant states that "The Opponent was only successful in having claim 1 amended to reflect what the Applicant considered to be the invention."  On the applicant's own admissions the claims which were proceeded with at the hearing did not define what the applicant considered to be the invention.  As the applicant took claims to a hearing which were not considered by them to define the invention and were not considered by the Hearing Officer to define the invention then we submit that costs should be awarded against the applicant.

With regard to the last paragraph of the applicant's submissions we submit that the opponent was successful on the grounds of manner of new manufacture, obviousness, Section 40 and prior claiming.  Accordingly costs should follow the event and costs should be awarded against the applicant including Counsel's fees, travel and accommodation."

decision

The first matter that I will address is whether the late filed submissions can be taken into account.  The delay of 3 days in filing submissions by the opponent has not resulted in any inconvenience or protraction of the matter.  In the circumstances I consider it would be unreasonable for me not to have regard to the submissions.  Comments made by the applicant regarding the opponent's submissions were also filed outside the time allotted.  For analogous reasons, I will also have regard to these comments.

The power of the Commissioner to award costs is based on section 210:

"210.  The Commissioner may, for the purposes of this Act: ...

(d)award costs against a party to proceedings before the Commissioner."

and regulation 22.8:

"22.8     (1)  The Commissioner must not award costs in proceedings to which this Division applies, other than costs specified in Schedule 8, unless each party to the proceedings has had the reasonable opportunity to make a submission on the matter of the award of those costs."

The relevant proceedings for the purposes of regulation 22.8(1) are proceedings before the Commissioner (regulation 22.7A).  The present opposition is such a proceeding.

The power to award costs is discretionary, so the exercise of the power must take into account all relevant considerations.  The general rule that costs follow the event is not determinative of the question of costs.

In the present case, the relevant facts are in dispute.  The parties disputed the relevance of success on the ground of manner of manufacture, the applicant arguing that this ground was merely consequential upon section 40 deficiencies.  There was also disagreement over whether the opposition had been successful on the ground of obviousness.  In the present case I do not need to determine these issues.

The opponent was successful on the substantive ground of prior claiming.  The applicant submitted that the opponent was only partially successful on this ground.  However, my decision states clearly (at page 22):

"I find that the opposition succeeds on the grounds that the specification does not meet the requirements of section 40 and that the claims are prior claimed."

I consider that success on one substantive ground of opposition is sufficient to entitle the opponent to an award of costs in its favour.

The applicant has suggested that the behaviour of the opponent during the opposition should influence the awarding of costs (paragraphs i)a) and iv) of their letter of 10 February 1994).  A successful party could be deprived of costs if they have engaged in conduct calculated to produce unnecessary litigation and expense (see for example Jones v North Australian Aboriginal Legal Aid Service Inc (1986) 82 FLR 264). In the present case I am satisfied that such conduct has not been demonstrated.

Both parties have been provided with a reasonable opportunity to make submissions on the award of costs other than those in Schedule 8.  I do not consider that it is appropriate to award costs other than those specified in Schedule 8.

CONCLUSION

I award costs in accordance with Schedule 8 against the applicant, American National Can Company.

S.D.BARKER

Delegate of the Commissioner of Patents

Patent attorneys for the applicant  :  Phillips Ormonde & Fitzpatrick, Melbourne

Patent attorneys for the opponent   :  Davies Collison Cave, Melbourne