Aristocrat Technologies Australia Pty Limited v IGT - [2008] APO 27

ABSTRACTS OF DECISIONS
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 2002247379 in the name of IGT

Title: Method and apparatus for downloading peripheral code

Action: Opposition by Aristocrat Technologies Australia Pty Limited to an extension of time under section 223

Decision: Issued 29 October 2008
Abstract

Section 223(1): It has not been established that the Commissioner failed to issue an invitation to pay the acceptance fee. An extension of time on this basis is not appropriate.
Section 223(2)(a): It is clear the ITP was never received by Ms Turner, and she did not investigate this further because she had formed the view that an ITP was not expected in this case. The combination of these two errors is clearly apparent. It is clear that Ms Turner would have paid the acceptance fee if that error had not occurred. An extension of time under section 223(2)(a) is appropriate.
Section 223(2)(b): There is no evidence that Ms Turner or any other person made enquiries whether there was a record of receipt by Blake Dawson Waldron, or whether it had been sent to a different part of the organisation. Consequently, circumstances beyond control have not been established.
Section 223(2A): The use of a reminder system that could generate reminders that were considered to be erroneous falls short of taking due care. Section 223(2A) does not apply.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No. 2002247379 by IGT, and an opposition by Aristocrat Technologies Australia Pty Limited to an extension of time under section 223

BACKGROUND

Patent application 2002247379 in the name of IGT (hereafter referred to as the applicant) was accepted on 22 December 2006, and advertised accepted on 11 January 2007. On 11 January 2007 the Commissioner issued an Invitation to Pay the acceptance fee. The due date for payment of the acceptance fee was 11 April 2007. The invitation stated that if the fee was not received by the due date, the application would lapse.
A notice of opposition to the grant of the patent was filed by Aristocrat Technologies Australia Pty Limited (hereafter referred to as the opponent) on 11 April 2007.
As the acceptance fee was not paid in time, a letter advising of lapsing was sent to the applicant on 11 July, and the application was advertised lapsed on 26 July 2007. On 13 July 2007 the applicant filed a request under section 223 to extend the time for paying the acceptance fee. A statutory declaration supporting extension was filed on 9 August 2007. The Commissioner advertised the extension on 6 September 2007, and a notice of opposition to the extension was filed by the opponent on 10 September 2007.
The matter was heard in Canberra on 1 October 2008. The applicant was represented by Mr Clark, patent attorney of Blake Dawson Waldron, who appeared by telephone. The opponent was represented by Mr Mountford, patent attorney of Griffith Hack, who appeared by video conference.
THE EXTENSION OF TIME
The request for extension of time identified the following grounds:
(i)because of an error or omission by the Commissioner or Deputy Commissioner, the acceptance fee was not paid by the due date of 11 April 2007; or
(ii)because of an error or omission by the person concerned or by his or her agent the acceptance fee was not paid by the due date; or
(iii)although the person concerned took due care, as required in the circumstances, to ensure the acceptance fee was paid this did not occur within the required time.
The request was later supplemented with a declaration by Tracey Turner, a Practice Group Assistant with Blake Dawson Waldron. The relevant portions of the declaration are as follows:
1. I am responsible for processing incoming correspondence from IP Australia and reminding clients of due dates for patent filing and other prosecution work. I have been in this role at BDW since October 2003.
1. On 11 January 2007, I noted the receipt of a Notice of Acceptance for Australian Patent Application No 2002247379 by my office. I also noted from the date stamp by my office that the date of receiving the Notice of Acceptance was 29 December 2006. I entered the details of the acceptance into our records management system, Ozmark®.
1. On 11 January 2007, I noted that an Invitation to Pay (“ITP”) the acceptance fee had not been received by my office, which prompted me to check the filing date of the application to determine whether it was filed prior to 31 August 2002, in which case I understood that acceptance fees would not be payable.
1. On 11 January 2007, I determined from the official filing receipt that the application was filed on 20 March 2002 and therefore concluded that acceptance fees were not payable.
1. On 1 February 2007, I prepared a letter to our client reporting the receipt of the Notice of Acceptance, and explaining that acceptance fees were not payable as the application was filed prior to 31 August 2002. At this time, to the best of my knowledge an ITP had not been received by my office. A copy of this letter is attached as Exhibit TT1.
1. On 12 July 2007, I noted the receipt of a notification from IP Australia advising that the application had lapsed by failing to pay continuation fees. This notification was corrected by IP Australia when on 16 July 2007 we received a Corrected Version explaining that lapsing had occurred through failing to pay the acceptance fees.
1. On 13 July 2007, I telephoned IP Australia and advised a customer service officer that my office had not received an ITP, and that it was my belief that acceptance fees were not payable. I was informed by the officer that an ITP was issued on 11 January 2007. I immediately requested a copy of the ITP to be sent to my office. A copy of the ITP received by my office on 13 July 2007 is attached as Exhibit TT2. I was also made aware by the customer service officer that although the filing date of the application is 20 March 2002, the application entered the Australian national phase on 28 October 2003 and therefore acceptance fees were payable.
1. On 13 July 2007, an Application for Extension of Time was made by my office. I also understand that the outstanding acceptance fees were paid on 16 July 2007.
The day before the hearing I received a request under section 104 to amend the request for extension of time. The essence of the amendment is to insert the additional ground of section 223(2)(b): circumstances beyond the control of the person concerned. While this amendment has not yet been processed, both parties made submissions on this ground as well. Due to the short notice of the new ground, I allowed Mr Mountford a further two weeks to file any additional submissions in relation to this ground. Additional submissions were filed on 8 October 2008, and I have taken them into account.
EVIDENCE
In addition to the Turner declaration, evidence in support, answer and reply was filed by the parties. Evidence in support consisted of a declaration by Eytan Epstein. Evidence in answer consisted of a declaration by David Gerhard Clark. Evidence in reply consisted of a declaration by Nicholas George Mountford. I will refer to the relevant parts of the evidence where appropriate in my decision.
At the hearing, I asked Mr Clark to provide an explanation of the Ozmark® system, and the way that it is used. Mr Clark gave an explanation of the screenshots shown in the exhibits to his declaration. I also asked Mr Clark why the reminder generated by Ozmark® was not acted on. Mr Clark stated:
“That decision, that’s right, was based on Turner’s judgement that an acceptance fee was not payable because of the PCT filing date, when its derived from the PCT filing date, and that’s, as you’ve noted, reported to the client in that incident TT1, so any consequent reminders on that case were then not relevant”
Mr Mountford’s further submissions included the comment that this statement by Mr Clark was evidence, and there should be an opportunity to cross-examine Mr Clark. I do not agree. A delegate asks many questions during a hearing to ensure that they understand each party’s case. The position of the advocate can be difficult: they need to explain the evidence and give their opinion of the effect of the evidence, without giving new evidence of what they know. While some latitude is given to advocates, where they clearly give evidence they will be asked to restrict themselves to the role of an advocate unless they wish to formally become a witness. In the present case, I had no concern with Mr Clark’s statements at the time that they were made. I understood that he was providing me with his interpretation of the facts as to why the reminder was ignored. Upon review of the record, I continue to be of that view. Mr Clark’s explanation of the Ozmark® screens was requested to ensure that I properly understood the evidence that was already on file. I can see no basis for believing that Mr Clark had crossed the line and become a witness. Accordingly I consider that the opponent has not been denied natural justice in the conduct of the hearing.
DECISION
The significance of the present opposition lies in the fact that the application lapses if the acceptance fee is not paid. As a consequence, the opposition to the grant of the patent will be unnecessary if the extension is refused.
Section 223
The acceptance fee is item 213 in Schedule 7 of the Patents Regulations. The fee is payable when the application is accepted (regulation 22.2(2)(d)). This fee was introduced by amendment to the Patent Regulations having effect from 1 September 2002. As a result of regulation 22.2(5), the fee does not apply to applications filed before that date, or to PCT applications that entered the national phase before that date. The present application entered national phase on 28 October 2003. Consequently the acceptance fee is payable on the present application.
Although the fee was payable when the application was accepted, regulation 22.2I sets up an alternative mechanism for the payment of the fee. The Commissioner has one month from acceptance to invite the applicant to pay the fee. If this is done, then the fee must be paid within three months of publication of the notice of acceptance. Where the fee is not paid in time the application lapses. It is apparent that the lapsing of the application was in accordance with the Patents Regulations.
Section 223 permits the extension of time periods in limited circumstances. The relevant portions of section 223 are as follows:
(1)The Commissioner must extend the time for doing a relevant act that is required to be done within a certain time if the act is not, or cannot be, done within that time because of an error or omission by:
(a) the Commissioner or a Deputy Commissioner; or
(b) an employee; or
(c) a person providing, or proposing to provide, services for the benefit of the Patent Office.
(2)Where, because of:
(a) an error or omission by the person concerned or by his or her agent or attorney; or
(b) circumstances beyond the control of the person concerned;
a relevant act that is required to be done within a certain time is not, or cannot be, done within that time, the Commissioner may, on application made by the person concerned in accordance with the regulations, extend the time for doing the act.
(2A)If:
(a) a relevant act that is required to be done within a certain time is not done within that time; and
(b) the Commissioner is satisfied that the person concerned took due care, as required in the circumstances, to ensure that doing of the act within time;
the Commissioner must, on application made by the person concerned in accordance with the regulations and within the prescribed period, extend the time for doing the act.
(2B)An extension of time under section (2A) cannot exceed the period prescribed for the purposes of this subsection.
For subsection 223(2A), the relevant regulation is 22.11(1C):
For paragraph 223(2A)(b) of the Act the prescribed period is 2 months after the circumstances that prevented the person from doing the relevant act within the time required ceases to exist.
For subsection 223(2B), the relevant regulation is 22.22(1D):
For subsection 223(2B) of the Act the prescribed period is 12 months after the end of the time within which the act is required to be done.
In summary, subsection 223(1) permits an extension in circumstances of error or omission by an employee of the Patent Office. Section 223(2) permits an extension in circumstances of error or omission by, or circumstances beyond control of, the applicant or their agent. Section 223(2A) permits an extension in circumstances of despite due care by the applicant.
The facts
The facts that have been established by the evidence, and the things that can be inferred from that evidence, are listed in the following chronology.
22 December 2006
IP Australia issued a Notice of Acceptance. The Notice relevantly states:
“For applications filed after 31 August 2002 or that entered National Phase after 31 August 2002, a fee for acceptance of an application applies. This fee includes a component determined by the number of claims in excess of 20. If the acceptance fee applies and has not been paid, an Invitation to Pay (ITP) will issue. If the amount is paid by the due date, your patent will be sealed as soon as practicable after the 3 month period for opposition has expired. The total number of claims at acceptance has been reported as: 25”
11 January 2007
This was a significant day in the present matter.
- Acceptance of the application was advertised in the Official Journal of Patents.
- IP Australia’s computer system generated an ITP for the acceptance fee. The official file contains a copy of the ITP, and the system used automatically prints a copy which is manually despatched. While it is true that there is no evidence that the ITP in this case was despatched by IP Australia, it is equally true that there is no evidence that the ITP was not despatched. In such a case it is more likely than not that normal processing took place, and the ITP was despatched.
- Turner noted receipt of the Notice of Acceptance, and noted that an ITP has not been received (para 2 of the Turner declaration).
- It appears from Exhibit DGC 2 of the Clark declaration that the Notice of Acceptance was recorded on Blake Dawson Waldron’s Ozmark® system on this day. This caused Ozmark® to flag a date for the Acceptance Fee, which appears in the system as “11/04/2007”. It is not clear whether this date was entered manually, or whether it is calculated by Ozmark® based on an entry of the date of publication of acceptance (which was specified in the Notice of Acceptance).
- Turner also determined that an ITP would not be issued, based on the filing date of the application (para 4 of the Turner declaration). It is apparent from what I have said previously, that this opinion was erroneous.
1 February 2007
Turner states that to the best of her knowledge an ITP had not been received by Blake Dawson Waldron by this date (para 5 of the Turner declaration). Also, the period since the Notice was generated by the IP Australia systems was sufficient for it to have been received. Turner prepared a letter to the client reporting the receipt of the Notice of Acceptance, and explaining that acceptance fees were not payable (para 5 of the Turner declaration).
11 March 2007
Ozmark® was set to remind that the acceptance fee was due on 11 April 2007. The reminder was ignored, presumably because Turner had already formed the view that the acceptance fee was not payable.
11 April 2007
The fee was due, and was not paid. IP Australia systems do not send out a lapsing letter immediately, and allow a period in case an extension of time is received.
11 July 2007
IP Australia’s systems generated a letter stating the application lapsed through failure to pay the acceptance fee.
12 July 2007
The Patent Oppositions section advised Blake Dawson Waldron that the opposition was concluded due to the lapsing of the application. This letter wrongly referred to lapsing as due to a failure to pay the continuation fees. This letter was despatched by facsimile. This letter was received by Blake Dawson Waldron on the day it was sent (para 6 of the Turner declaration).
13 July 2007
Turner telephoned IP Australia to question the lapsing, and stated that Blake Dawson Waldron had not received an ITP. She also questioned whether an ITP was required (para 7 of the Turner declaration). A copy of the ITP was faxed to Blake Dawson Waldron.
An application for extension of time from 11 April 2007 to 11 August 2007 to pay the acceptance fee was filed.
16 July 2007
Acceptance fee was paid.
Analysis
I will now consider whether there was either an error or omission or circumstances beyond control. If either of these were present, I will then decide whether the failure to pay was because of that event, and whether the discretion should be exercised. I will then separately consider whether the ground of despite due care is appropriate.
Was there an error or omission
In Kimberly-Clark Ltd v Commissioner of Patents (No 3) [1988] FCA 421, (1988) 13 IPR 569, Jenkinson J stated that the phrase “error or omission” should not be restricted to accidents and inadvertences. Rather, an “error or omission” extends to a wide range of flawed mental functions. In the present case, the applicant relies on a range of possible errors. These relate to whether the ITP was received by Blake Dawson Waldron, and Ms Turner’s view of whether an ITP should issue.
I have found that it was appropriate to issue an ITP, and it is more likely than not that the ITP was despatched by IP Australia. Consequently, there is no basis for finding that there was an error or omission by the Commissioner, a Deputy Commissioner or an employee of the Patent Office. Section 223(1) is not applicable to the present case.
It is clear the ITP was never received by Ms Turner. It is also apparent that after checking the filing date of the application, she did not investigate this further because she had formed the view that an ITP was not expected in this case. Had Ms Turner received an ITP I believe she would have investigated the matter further. I base this view on the fact that when Ms Turner was informed that the application had lapsed for failure to pay the acceptance fee, she immediately contacted IP Australia to question why the fee was payable. The combination of these two errors is clearly apparent. I am satisfied that an error within the terms of section 223(2)(a) occurred.
Circumstances beyond control
Circumstances beyond control were considered in the context of the Trade Marks Act in Re Atomic Skifabrik Alois Rohrmoser v Registrar of Trade Marks [1987] FCA 22 at [18], (1987) 7 IPR 551 at 558. Jenkinson J concluded:
“In the context in which it is found, the expression ‘circumstances beyond the control of the person concerned’ does in my opinion designate - and designates only - occurrences which neither the person concerned nor any person acting on his behalf to do the act or take the step could prevent. The operations of nature and the activities of strangers may result in such occurrences. So, too, may the acts and omissions of certain independent contractors engaged by the person concerned or by his agent, as for example the carrier of mail or the office cleaner, either of whom causes the loss or destruction of a document to be filed. But the acts or omissions of the agent who on behalf of the person concerned is to do the act or take the step are not occurrences of the description specified in paragraph 131(1)(a), in my opinion. Nor, in my opinion, are the acts or omissions of that agent's servants. The section is, I think, correctly described as a force majeure provision.”

If the ITP was never received by Blake Dawson Waldron, presumably as a consequence of mishandling of the mail, then circumstances beyond control would be established. Ms Turner declares that she did not receive the ITP, but this does not mean that it was not received by Blake Dawson Waldron. There is no evidence that Ms Turner or any other person made enquiries whether there was a record of receipt by Blake Dawson Waldron, or whether it had been sent to a different part of the organisation. I am not satisfied on the evidence presented that the ITP was not received by Blake Dawson Waldron, and I conclude that it is more likely than not that the ITP was received by Blake Dawson Waldron. Consequently, circumstances beyond control have not been established.
Was the failure to pay because of the error?
Having found that there was an error or omission, the next question is whether the failure to pay the acceptance fee was because of the error. In Kimberly-Clark, Jenkinson J held that it is sufficient that an error or omission contributed to cause the failure to do the act. The relationship is one of cause and effect. Normally the error will be seen to thwart an intention to do the act. However, in Re Apotex Pty Ltd and Commissioner of Patents [2008] AATA 226 at [21], (2008) 101 ALD 368 at 372 it was stated:
“I consider that, while the majority of cases will disclose a specific intention to oppose, with that intention being thwarted by the relevant error, there will be, as in this case and in Kimberly-Clarke [sic], exceptional circumstances where no specific intention to oppose was formed. In this case, as in Kimberly-Clarke [sic], the relevant error precluded the forming of the specific intention.”
The applicant, and Ms Turner, never had an intention to pay the acceptance fee. This was because of the mistaken belief that the acceptance fee was not payable in the present case. It is clear that the fee was not paid because of the failure of Ms Turner to receive the ITP and her misunderstanding that the fee was not payable. I am satisfied that Ms Turner would have paid the acceptance fee if that error had not occurred.
Should the discretion be exercised?
I have found that there was a relevant error or omission and that the applicant failed to pay the acceptance fee because of that error. I must now consider whether to exercise the discretion to extend time. In Kimberly-Clark, Jenkinson J agreed that the considerations identified by Bowen CJ in Vangedal-Nielsen v Commissioner of Patents (1980) 33 ALR 144 are relevant: whether there has been a full and frank disclosure of all relevant circumstances; the interests of the parties in refusing or granting the extension; the public interest, including the question of undue delay.
I note that not all of the relevant facts were mentioned in the Turner declaration. However, it is candid in the admission of a misunderstanding of when the acceptance fee is payable, which is a key fact in this matter. I am satisfied that there has been a full and frank disclosure in the Turner declaration.
The balance of interests of the parties strongly favours granting the extension. The consequence of refusing to grant the extension is that the application will lapse. On the other hand, granting the extension will mean that the opposition to the grant of the patent will proceed, protecting the public interest that invalid patents are not granted. The delay in requesting the extension, once the error was apparent, was very short. The fee was paid within a few days of becoming aware that the fee was overdue.
Overall, it is appropriate to exercise the discretion in the present case.
Despite due care
The final question is whether the failure to pay occurred despite due care by the applicant. There is little jurisprudence on what constitutes despite due care. The Manual of Practice and Procedure states:
“Extensions of time under subsection 223(2A) would only arise where the person concerned had appropriate systems in place and did everything that could reasonably be expected to ensure the relevant act was done and despite that, a relevant act was not done in time. A reasonable enquiry is whether the systems or mechanisms put in place were appropriate to ensure the relevant act was performed in time. If the person concerned did not have adequate systems in place or had not done everything reasonably possible to ensure the relevant act was done in time, an extension under section 223(2A) would not be appropriate.” [3.24.6]
In the present case, Blake Dawson Waldron has a computer system for monitoring when fees are due. The date that acceptance was advertised appears to have been entered into this system, and there was a reminder when the acceptance fee was due. However, it seems that it was normal practice to disregard the reminders if it was considered that they were wrong. In the present case the reminder appears to have been overridden by deliberate action, due to the erroneous understanding that the acceptance fee was not applicable. The use of a reminder system that could generate reminders that were considered to be erroneous strikes me as falling short of taking due care. I am not satisfied that section 223(2A) applies to the present case.
Conclusion
The applicant has shown the existence of an error or omission that caused the failure to pay the acceptance fee. I am satisfied that an extension of time under section 223(2)(a) is appropriate.
I am not satisfied that circumstances beyond control have been demonstrated. Consequently, an extension of time under section 223(2)(b) would not be appropriate. I am satisfied that an extension based on section 223(1) or section 223(2A) has not been justified.
I grant the extension under section 223(2)(a).
Section 104
I have considered the extensions as if the request has been amended to include the ground of section 223(2)(b). In the end I found that this ground would not be successful. Consequently, I can see no point in the applicant continuing with the request to amend under section 104. I advise the applicant to withdraw the request to amend under section 104.
Costs
In the present case the applicant has been successful in obtaining an extension of time under section 223(2)(a), but unsuccessful in relation to section 223(1), 223(2)(b) and 223(2A). The applicant has taken a shot gun approach to the grounds for the extension, and the case in relation to the unsuccessful grounds was poor. Additionally the applicant sought to bring in the ground of section 223(2)(b) only the day before the hearing. In this situation the applicant should not be rewarded by an award of costs. However, the case in support of section 223(2)(a) was clear from the Turner declaration, and little was added by the evidence that was later served. The opponent also should not be rewarded by an award of costs.
I therefore make no award of costs.
Dr S.D.Barker
Delegate of the Commissioner of Patents
29 October 2008
Patent attorneys for the applicant : Blake Dawson Waldron
Patent attorneys for the opponent : Griffith Hack