Arch Wood Protection Pty Ltd v Osmose (Australia) Pty Limited
[2014] APO 26
•16 May 2014
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Arch Wood Protection Pty Ltd v Osmose (Australia) Pty Limited [2014] APO 26
Patent Application: 2008207612
Title:Surface Treatment for Wood and Wood Products
Patent Applicant: Osmose (Australia) Pty Limited
Opponent: Arch Wood Protection Pty Ltd
Delegate: Dr S.K. Aggarwal
Decision Date: 16 May 2014
Hearing Date: 10 April 2014, in Sydney
Catchwords: PATENTS – request to file further evidence – satisfactory explanation of delay – D54 is relevant prior art – interest of parties offsetting - public interest favours grant of request – leave to file further evidence allowed – costs awarded against the applicant
Representation: Patent applicant: Ms Julia Baird (Senior Counsel), assisted by Anthony Glen Place, of the patent attorney firm Molins & Co., Sydney
Opponent:Dr Gareth Dixon, of the patent attorney firm Shelston IP, Sydney
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2008207612
Title:Surface Treatment for Wood and Wood Products
Patent Applicant: Osmose (Australia) Pty Limited
Date of Decision: 16 May 2014
DECISION
I allow the request to file further evidence in relation to the document D54.
I award costs against the applicant.
REASONS FOR DECISION
1. Patent application 2008207612 directed to Surface Treatment for Wood and Wood Products was filed on 29 August 2008 by Osmose (Australia) Pty Limited (the applicant). The application is a divisional of patent application 2003302613 and derives its priority from provisional application 2002953128 filed on 5 December 2002. The application 2008207612 was advertised accepted on 19 January 2012.
2. An opposition to the grant of a patent was filed by Arch Wood Protection Pty Ltd (the opponent) on 19 April 2012 and a statement of grounds and particulars was served on 18 July 2012. The opponent completed their evidence in support on 15 November 2012 and the applicant completed their evidence in answer on 15 August 2013. The evidence in reply by the opponent was completed on 15 November 2013.
3. On 23 December 2013, subsequent to the completion of all evidentiary steps, the opponent filed a request for leave to file further evidence which was opposed by the applicant.
4. The matter was heard in Sydney in the office of Shelston IP on 10 April 2014. The parties provided their written submissions for the hearing via their respective attorneys on 3 April 2014.
The Specification
5. The invention relates to superficial treatments of wood at a sawmill using bifenthrin. The specification concludes with twenty claims of which only claim 1 is independent. The independent claim 1 reads as follows:
1.A method of timber product preservation when performed at a sawmill, the method comprising the steps of:
applying a superficial treatment of water based formulation of bifenthrin to the timber product; the water based formulation further comprising a colorant;
the superficial treatment comprising an application of between 4g/m3 and 38g/m3 of timber product; and
wherein the timber product does not require redrying.
The evidence
6. The statement of grounds and particulars alleges lack of novelty in light of each listed prior art document D1-D53 and lack of inventive step in light of one or more of the documents D1-D53. The evidence in support of the opposition is a first declaration by Dr Karl Johann Schmalzl, together with exhibits KJS-1 to KJS-11. In his first declaration, Dr Schmalzl discusses the disclosures of documents D1, D11 and D44-D50, and concedes that claim 1 of the opposed application may be novel by virtue of the “sawmill” plus “colorant” or “sawmill” plus “dosage” features. Regarding inventive step, Dr Schmalzl puts the view that each of the combinations of the above features would have been obvious to him at the priority date of the opposed application.
7. The evidence in answer consists of several declarations by Mr Elias Akle, Mr Anthony Thomas Jennings and Mr Anthony Haslett. The evidence in reply consists of a declaration by Dr Gareth Dixon and a second declaration by Dr Schmalzl.
8. The opponent is requesting leave to file further evidence in relation to a new prior art document (“D54”) entitled “What’s New in Forest Research (No. 234): NZ FRI Lektraspray – Controlled Application of Antisapstain Chemicals” published by Rotorua Printers, Rotorua, New Zealand in 1994. A copy of the above document and a third declaration by Dr Schmalzl accompanied the opponent’s request to file further evidence. In his third declaration, Dr Schmalzl explains the circumstances in which he found D54, and states that he would welcome the opportunity to consider the above document.
The relevant law
9. On 15 April 2013, the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No 1) (the Amendment Regulation) commenced. The Amendment Regulation significantly amended the Patents Regulations (the Regulations) as they apply to patent oppositions. Pursuant to subregulation 23.36, item 2, an application to file further evidence in this opposition is governed by subregulations 5.10(4) and 5.10(5) as they existed immediately before 15 April 2013. This is because the notice of opposition was filed before 15 April 2013. These subregulations state:
(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.
The above provision must be read in conjunction with subregulation 5.10(5) which provides that:
(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.
10. Consequently, it is a prerequisite to any decision that the Commissioner must ensure that the other party has been notified, and that both parties have had the opportunity to make representations. In the present case the other party has been notified, and both parties have been given the opportunity to make representations.
11. Leave to file further evidence can only be granted if the Commissioner is reasonably satisfied that it is appropriate. In exercising this discretion I am guided by the decisions of Burchett J in Ferocem Pty Ltd v Commissioner of Patents (1994) AIPC 91-057; 28 IPR 243, Sackville J in A Goninan & Co Ltd v Commissioner of Patents (1997) AIPC 91-330; 38 IPR 213 and Goldberg J in National Starch & Chemical Co v Commissioner of Patents [2001] FCA 33 on the operation of subegulation 5.10(5) in relation to extensions of time. The general principles that flow from these decisions are as follows:
(a)The power is discretionary: Regulation 5.10 confers a broad discretion, which cannot be reduced to imperative compliance with particular requirements. It is necessary to give genuine and proper consideration to all relevant considerations. (Ferocem at AIPC 38,208; IPR 247-8, Goninan at AIPC 39,434; IPR 220)
(b)Explanation of delay: The reasons why the evidence was not served earlier are a relevant consideration, but a satisfactory explanation is not a mandatory requirement. (Ferocem at AIPC 38,207-8; IPR 247)
(c)The public interest: The public interest in determining a serious opposition on its merits is a relevant consideration. (Goninan at AIPC 39, 435-6; IPR 222)
*In order to do this, it is necessary for the Commissioner to form a view as to the nature of the evidence that it is sought to adduce, and the significance of that evidence for the opposition proceedings. (Goninan at AIPC 39,438; IPR 225-6)
*The significance of the evidence is assessed having regard to any relevant material available, not just the evidence itself. (National Starch at [33])
*The public interest is not protected merely because some evidence has already been served. (Goninan at AIPC 39,438; IPR 225)
(d)The interests of the party seeking the exercise of discretion: The interests of the party seeking the exercise of discretion are a relevant consideration. (Ferocem at AIPC 38,208; IPR 247)
(e)The interests of other party: It is relevant to consider the disadvantage to the other party of delays in determining the opposition, and the effect of delays on the efficient and orderly administration of the Patent Office. (Ferocem at AIPC 38,208; IPR 247, Goninan at AIPC 39, 436; IPR 222).
12. The above principles are equally relevant to the determination of the present request to file further evidence.
Explanation of delay
13. In their explanation of the delay, the opponent stated that D54 was discovered independently by their witness, Dr Schmalzl, on his own volition on 11 December 2013 while doing some background reading on the subject. They indicated that they did not carry out any searching on their part in this opposition and the prior arts generally relied upon in their statement of grounds and particulars were discovered by various patent offices throughout the world. The opponent further submitted that soon after D54 was discovered, Dr Schmalzl’s declaration was executed and the request for leave to file further evidence was filed with the Patent Office on 23 Dec 2013. They stated that had D54 been discovered earlier, it would have been entered in the evidence sooner and it does not suit them to introduce a document at the further evidence stage.
14. In reply, the applicant stated that the opponent and Dr Schmalzl were aware of the existence of “Lektra Sprayer” for surface treatment of timber at the time of first declaration of Dr Schmalzl on 14 November 2012 through Exhibit KJS-11, however neither the opponent nor Dr Schmalzl made any enquiries regarding the “Lektra Sprayer” at that time and no explanation has been advanced for this failure to enquire. The applicant put the view that Dr Schmalzl’s own background reading does not explain the inordinate delay in taking any steps to locate the document now sought to be put into evidence, and that the opponent is seeking leave to file unidentified evidence in relation to D54, and yet no further such evidence has been filed to date.
15. The applicant appears to be suggesting that had the opponent made enquiries regarding the “Lektra Sprayer” as shown in KJS-11, D54 would have been discovered much earlier. In my view, the opponent is not required to carry out any further search in relation to the documents listed in their statement of grounds and particulars, and even if they were to conduct further inquiries on the “Lektra Sprayer”, it is difficult to predict whether they would have found it.
16. Regarding the applicant’s contention that no further evidence has been filed to date, I consider that it is not mandatory for the opponent to file any further evidence while their request for the said evidence has not been allowed by the Commissioner. However, it would have better had the opponent filed the evidence because then its significance would have been apparent to others including the applicant. Overall, I am satisfied with the circumstances in which D54 was discovered and note that the opponent was diligent in filing their request to file further evidence soon after D54 was discovered. I conclude that the opponent has provided a satisfactory explanation of the delay.
The public interest
17. The public interest in opposition proceedings calls for a balance between an opposition being dealt with on its merits and expeditious processing of that opposition. In order to determine the extent to which a correct and just determination of the opposition on its merits can be made, I need to assess the nature and the significance of the further evidence that will be filed.
18. The opponent submitted that D54 teaches in-line superficial spraying of water based timber treatment chemicals, to sawn, debarked timber at sawmills. They stated that the document is not relevant to novelty because it does not disclose bifenthrin, however it does disclose each and every other feature of at least claim 1 of the opposed application. The opponent asserted that were leave to file further evidence granted, their burden would then be to adduce evidence supporting the contention that selecting bifenthrin was an obvious adaptation of the water-based formulation of antisapstain chemicals disclosed in D54.
19. In response, the applicant argued that D54 does not further advance the opponent’s case over Exhibit KJS-11 already submitted in evidence in support as both documents refer to “Lektra Sprayer” and that it would not materially affect any determination in the substantive opposition. The applicant further indicated that the opponent, while aware of and referring to the “Lektra Sprayer” system in both the evidence in support and evidence in reply, did not adduce evidence of obviousness of the applicant’s claimed invention.
20. Disagreeing with the applicant, the opponent stated that D54 goes considerably beyond KJS-11 both in terms of teaching and enablement because it discloses the features of water-based wood treatment chemicals and the use of colorants. They submitted that these features as defined in claim 1 are neither mentioned nor derivable from KJS-11. The opponent argued that since the features of “water based” and “colorant” are clearly taught in D54 as opposed to being arguable on the basis of common general knowledge in the art, any further evidence pertaining to lack of inventive step of switching antisapstain for bifenthrin on the basis of D54 is likely to be significant.
21. On comparison of D54 with KJS-11, I find that although both of them relate to the “Lektra Sprayer”, the features of “water based” and colorant” as defined in claim 1 of the opposed application are only disclosed in D54. In view of the disclosure of D54, I am of the opinion that the further evidence to be filed may present a serious challenge to the opposed application. Although the allowance of the present request will delay the opposition further, given the relevance of D54, it is in public interest to allow the leave to file further evidence.
The interests of the party seeking the exercise of discretion
22. The opponent stated that excluding D54 at this stage could amount to the opposed application surviving on technicality thus causing severe prejudice to them, and if that were the case, they would be excluded from a market they have every right to compete in. It is clear that the opponent’s interests lie in allowing the present request for further evidence.
The interests of the party opposing the exercise of discretion
23. The applicant submitted that since the “Lektra Sprayer” system was not previously relied on by the opponent in support of its ground of lack of inventive step, they will need to find one or more further experts to provide evidence relating to the system. They added that it took them almost six months to secure their primary expert witness and envisaged that a similar amount of time was likely to be incurred identifying new experts. In view of the above, I conclude that the applicant’s interests lie in disallowing the further evidence.
The balance of considerations
24. There is a satisfactory explanation of the delay from the opponent. The public interest dictates allowance of leave to file further evidence. The interests of the parties are largely offsetting. On balance, I am of the view that the public interest outweighs the other considerations.
Conclusion
25. I conclude that it is appropriate in all the circumstances to allow the request to file further evidence in relation to the document D54.
Other matters
26. I allow the opponent one month from the date of this decision to file further evidence in relation to the document D54. I allow the applicant two months to file their responding evidence after the filing of the further evidence by the opponent.
Costs
27. The applicant submitted that the opponent has not provided any reasonable explanation for the delay in locating the document D54 and in requesting leave to file further evidence and therefore the award of costs should not be made against the applicant. However, I have already determined that there is a reasonable explanation of delay.
28. Ordinarily in proceedings such as these, costs follow the event. I see no reasons to deviate from this practice in the present case. The opponent has been granted the leave to file further evidence. Therefore I award costs against the applicant.
Dr S.K. Aggarwal
Delegate of the Commissioner of Patents
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