Aristocrat Technologies Australia Pty Ltd v Acres Gaming, Inc - [2005] APO 16

OFFICIAL NOTICE
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 750775 in the name of Acres Gaming, Inc

Title: Method for Crediting a Player of an Electronic Gaming Device

Action: Request for an extension of time to serve evidence in answer to an opposition under section 59 and an objection thereto by Aristocrat Technologies Australia Pty Ltd

Decision: Issued 07 April 2005.
Abstract

Application for an extension of time to serve evidence in answer allowed to admit key evidence in relation to prior use.
Previous application for an extension of time to serve evidence in answer had also been objected to and allowed.
Consideration given as to whether terms should be placed on the allowance of the extension. No terms placed on the extension granted, but terms were proposed in relation to a further request for an extension beyond the allowed period. The further request was filed after the hearing but was based on reasons that were largely known and discussed at the hearing. Parties given 7 days to make representations on the proposed terms.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No. 750775 by Acres Gaming, Inc; request for an extension of time to serve evidence in answer to an opposition under section 59 and an objection thereto by Aristocrat Technologies Australia Pty Ltd

BACKGROUND

Patent application 750775 in the name of Acres Gaming, Inc. (hereafter referred to as “Acres”) was advertised accepted on 25 July 2002. The patent application relates to a method for crediting a player of an electronic gaming device. A notice of opposition was filed by Aristocrat Technologies Australia Pty Ltd (hereafter referred to as “Aristocrat”) on 24 December 2002. Evidence in support was completed by Aristocrat almost 11 months later on 21 November 2003.
Evidence in answer was initially due on 21 February 2004. As a result of a number of previous requests for extensions, the time for serving evidence in answer has been extended to 21 February 2005. The most recent extension, from 21 November 2004 to 21 February 2005, was considered by a delegate of the Commissioner following an objection to the extension by Aristocrat. Following a hearing on 3 February 2005, the delegate issued his decision on 21 February 2005 – See Acres Gaming, Inc v Aristocrat Technologies Australia Pty Ltd [2005] APO 6 (21 February 2005). The history of the previous extensions of time to serve evidence in answer is set out in that decision. Despite some observations that the applicant’s conduct was not consistent with that of an applicant diligently preparing their case during an opposition for at least part of the extended period, the delegate granted the further extension to 21 February 2005.
The applicant has applied for a further extension of time from 21 February 2005 to 21 March 2005 in which to serve evidence in answer. Aristocrat has objected to that extension.
I heard the parties in Canberra on 18 March 2005. Mr. Boris Golja, patent attorney of Wray & Associates, Perth, appeared by telephone on behalf of Acres and filed written submissions prior to the hearing. Mr Paul Savage, patent attorney of Freehills, Sydney, appeared by telephone on behalf of Aristocrat and also provided written submissions prior to the hearing.
REASONS FOR EXTENSION
In the reasons for the extension, the applicant said that the first expert they had engaged was unable, for various reasons set out in the application, to commit the necessary time to prepare a declaration. As a result the applicant no longer intended to provide a declaration from this expert. Much of this was already known from the decision on the previous extension application.
The applicant had engaged a second expert who, as also set out in the previous extension, had prepared comments in dot form but indicated he would provide more detailed comments subsequently. The expert witness has provided further comments, which the applicant states are quite detailed. These comments are apparently in relation to the DACOM 6000 system that was developed for Crown Casino, Melbourne. The opponent has relied upon the DACOM 6000 system to establish prior use of the claimed invention. The second expert is said to have been the Technical Director at Crown Casino overseeing development work being done on the DACOM 6000 system. According to the application for an extension of time, “the information received from the expert has been more extensive and detailed than anticipated. As a result, whilst a draft declaration for the expert witness is under preparation, it has not yet been completed.”
The application for extension also said that as the first expert was not able to provide evidence, “it will also be necessary to obtain comment from the second mentioned witness herein on other prior art cited in the statement of grounds and particulars.” That is, it was intended that the expert would prepare two declarations, one relating to the DACOM 6000 system and the other relating to other prior art.
At the hearing on 18 March 2005 it became apparent that the evidence would not be served by 21 March 2005 and that a further extension would be necessary to complete evidence. (An application for an extension of time from 21 March 2005 to 21 April 2005 was subsequently filed on 21 March 2005). Mr Golja indicated at the hearing that he would be meeting with the expert on the 21^st and would be in a position to finalise the declaration relating to prior use shortly thereafter. However, Mr Golja could not commit to any time for completing the second declaration by the expert relating to other prior art, prior to meeting with the expert. He could only state that the second declaration would also be discussed at the meeting on the 21^st.
DISCUSSION
The law relating to extensions of time under regulation 5.10(2), and the principles developed in relation to that law, are conveniently set out in the decision relating to the previous extension of time application on this patent application - [2005] APO 6. Regulation 5.10 requires that the Commissioner must not grant an extension of time unless she is reasonably satisfied that the extension is appropriate in all the circumstances. In order to be so satisfied, I must give genuine and proper consideration to all relevant circumstances and need to balance the interests of the parties and the public interest. These competing interests were set out by Burchet J in Ferocem Pty Ltd v The Commissioner of Patents (28 IPR 243) as follows:
“The determination of an application for an extension of time under Regulation 5.10(2) involves a balancing exercise, in which competing considerations must be taken into account. There are the interests of the persons directly concerned with application and opposition in question. There are also the public interests, which are not necessarily all ranged on the same side. They include the expeditious disposal of matters in the Patents Office, and questions of cost, 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 Aluminium & Chemical Corporation v The Reynolds Metal Company (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 that it should be shut out in consequence of a failure in procedure, lamentable though the failure may be".”
In short, the public interest can be summarised as being met by having all relevant evidence before the Commissioner, and having that evidence served as promptly as possible. As noted in Ferocem, these two aspects of the public interest are often in tension. That is, the evidence to be served may be highly relevant, but the time taken to serve the evidence is less than desirable. The interests of the parties involved often tend to align approximately with one aspect or the other of the public interest. For the person seeking the extension, they may be disadvantaged if the extension is refused as they will be precluded from filing evidence. For the other party, they may be inconvenienced by any delays in having the opposition resolved.
Relevance of the evidence
One of the key factors to be determined here is the likely relevance of any evidence to be served. In the present case the applicant indicated it intended to serve two declarations by their expert. The first related to the ground of prior use, particularly in relation to use of a system called DACOM 6000. As noted above, the expert was said to be intimately familiar with the DACOM 6000 system as he was the Technical Director at Crown Casino overseeing development work of the system. Mr Golja submitted the evidence would set out specific comments that contradict assertions made in specific paragraphs of the declarations of Andrew Wyllie and Leslie Gosden served in evidence in support about aspects of DACOM 6000 and gaming machine operation.
In cases where prior use of the claimed invention is alleged, evidence by experts or those who had knowledge of the prior use tends to be important to a correct determination of the facts. I am satisfied that the evidence to be served in relation to the DACOM 6000 system is likely to be highly relevant to the opposition.
The second declaration to be prepared is said to relate to the other prior art cited in the statement of grounds and particulars. The potential relevance of this declaration is not as apparent at face value as is the declaration on prior use. The opponent has raised grounds of novelty and inventive step. While expert evidence will usually be of assistance in determining the common general knowledge in an art, expert witnesses may or may not be of help in deciding what a document teaches. The disclosure of a document is a matter of fact to be decided by the hearing officer. The hearing officer may or may not be assisted by expert evidence in that matter, depending on the circumstances.
Mr Golja said that Gosden, in evidence in support, had made assertions in terms of the disclosure of what the documents say. It was necessary, he submitted, to provide answering evidence to those assertions. I have had a cursory view of the Gosden declaration. Gosden has made comments on the disclosure of the opposed application as well as on the disclosure of a number of documents in the particulars. I have come to no conclusion on the relevance or otherwise of Gosden’s comments to a correct determination of the opposition. That is a matter for the substantive hearing on the opposition. But, if one assumes for the purposes here that the opponent’s expert evidence on the cited art is relevant, then the same assumption could be made in the present case about the expert evidence to be filed by the applicant.
I note that the particulars also contain allegations as to the common general knowledge in the art and that Gosden has made some comments about the sources of standard reference material in his declaration. Although Mr Golja did not elaborate on the issue to any extent, the second declaration may also have some relevance to issues of common general knowledge.
Although I have some doubts regarding the extent of the relevance to the opposition of the second declaration to be filed, I am prepared to accept it is relevant for the reasons above.
Time taken to serve evidence
The total delays in completing evidence in answer since evidence in support was completed were largely considered by the delegate in his decision on the previous extension of time application. The opponent’s objection to the present extension was that the applicant appears to have done little to progress the evidence since the previous hearing on 3 February 2005. According to the opponent, the only reasons provided by the applicant over and above what was known from the previous hearing was that “the comments are quite detailed” and “the information received from the expert has been more extensive and detailed than had been anticipated”. The applicant had previously indicated that at least some evidence would be filed by 21 February 2005, but this had not occurred. The opponent argued that there have been no intervening factors, no new evidence to consider and no supporting reasons why the evidence could not have been prepared and served.
I agree that the reasons put forward by the applicant in support of their extension application appear to largely reiterate information that was known at the previous hearing. But I think the opponent is understating the progress made. Since the previous hearing, the second expert had provided detailed comments and a draft declaration was under preparation, though not completed. The applicant’s reasons also said that at the previous hearing it was still anticipated that the first expert would provide evidence and this would be provided by 21 February 2005. However, because of his work commitments, the first expert was unable to meet this timeframe. Mr Golja confirmed at the hearing on the present matter that the opponent would not now be serving evidence from the first witness.
Mr Savage argued that the applicant must supply sufficient detail to justify their request for an extension, and that the justification should establish that unforeseen circumstances beyond the control of the applicant necessitated additional time to serve evidence. Mr Savage appeared to rely on decisions such as Dominion Mining Ltd v MIM Holdings Ltd [1997] APO 27 to make this point. However, these submissions seem to be inconsistent with Federal Court decisions dealing with regulation 5.10 such as Ferocem (supra), A Goninan and Co Ltd v Commissioner of Patents (1997) 38 IPR 213 and National Starch & Chemical Company v Commissioner of Patents [2001] FCA 33. While sufficient justification would normally be expected, it is clear from these decisions that "the reasons why evidence was not served in time are a relevant consideration, but a satisfactory explanation is not a mandatory requirement". Further, the purported requirement for there to have been “unforeseen circumstances” is inconsistent with the principles set out in these decisions and in the wording of the regulation itself, which merely requires the Commissioner to be “reasonably satisfied” that the extension is appropriate “in all the circumstances”.
Notwithstanding the above, I acknowledge that any lack of diligence on the part of the applicant is also a relevant factor to consider. In Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd [2004] FCA 1718 (23 December 2004), the Court stated: “If the Court perceives that a well-resourced applicant, having enjoyed the latitude of several extensions of time to complete its preparation, is unable or unwilling to confront the reality of a fixed date for the start of the trial, it is an appropriate exercise of discretion to dismiss the application.” While that decision was in the context of the Federal Court Rules, I consider that similar principles are applicable in exercising the discretion under regulation 5.10 to grant or refuse an application for an extension of time to serve evidence.
A practical difficulty with refusing an extension sought by the patent applicant is the ability under the Patents Act for the applicant to file a divisional application at any time up to grant of a patent on the present application. That is, if the extension request is refused the applicant has the ability to re-file the application as a divisional application and withdraw the present application. It may be open to question whether this is a relevant factor to take into account. There is no doubt that, while this is statutorily permissible, it is contrary to both the public and the opponents' interest in obtaining a timely resolution of the proceedings, and likely to incur further unnecessary expense to all parties. Also there are no doubt circumstances, such as those discussed in Cadbury Schweppes, where refusal will be the appropriate action regardless, taking all relevant factors into consideration.
Regulation 5.10 (2) allows the Commissioner to grant an extension of time on such reasonable terms as the Commissioner specifies. At the hearing I put it to the parties that one possible way to progress the opposition may be to impose terms such as those specified in ExxonMobile Chemical Patents Inc v The Associated Octel Company Limited [2002] APO 34 (13 September 2002). In that decision, the delegate allowed the extension subject to these terms:
“I think it appropriate that the presently sought extension of time is dealt with subject to the following terms (Reg. 5.10(2)(b)):-
·ExxonMobil completes its service of evidence in answer by 2 December 2002.
·If ExxonMobil requires time beyond the presently sought time until 2 October 2002 then ExxonMobil applies for a further extension of time with appropriate justification for the need for that extension and with indications of its progress in concluding its evidence in answer.
·I shall not formally grant the present extension unless and until those terms are met.
If these terms are not met, I shall refuse the extension.”
While the parties, after some discussion, agreed that such terms could resolve the matter, the parties could not agree on a final date by which evidence must be served. Mr Savage favoured an extension of only a few days beyond the presently sought extension. This was based on the opponent’s view that the applicant had extended well beyond what could be considered a reasonable time-frame for completing evidence and did not deserve any extension, and in view of the fact that Mr Golja had indicated that the expert was to be in Perth (where Mr Golja is located) for several days of the week following the hearing. Mr Golja, on the other hand, would not concede to this timeframe prior to meeting with the expert. Although Mr Savage made some concessions on the final date, the parties could not reach concurrence.
At the hearing Mr Golja said that he would be meeting the second expert on the following Monday 21 March 2005 (the next business day after the hearing and the last day of the extension period sought). It was likely, he submitted, that the first declaration would be served within days of that meeting. As it turns out, that evidence was filed with IP Australia on 23 March 2005. Mr Golja also said he would be discussing the second declaration with the expert at that meeting. However, the timeframe for completing that declaration was less clear and Mr Golja was unable to commit to any definite timeframe prior to his meeting with the expert, other than by 21 April 2005.
DECISION
As the first declaration by the second expert, Neil Phillip Spencer, has now been served, there would appear to be little purpose, and little public interest, in refusing to have that evidence admitted. The evidence is prima facie of high relevance. But I note that to admit the evidence would require a further short extension beyond that presently sought. There also remains the question of whether any extension should be granted to allow for service of the second declaration by Mr Spencer, which to my knowledge has not yet been served or filed.
Following the principles in Goninan, an extension of time to 23 March 2005 should be allowed to admit the key evidence of Mr Spencer served and filed on that date. Therefore, I allow an extension of time to 23 March 2005 to serve evidence in answer.
As foreshadowed by the applicant, a request for a further extension of time to 21 April 2005 has now been filed. The reasons set out in the extension application were largely known and discussed at the hearing on 18 March 2005. Although no objection has been filed to that extension yet, I consider it appropriate to propose terms in relation to that extension based on what was known and discussed at the hearing and on what I have decided above.

I propose that the extension of time to 21 April 2005 be dealt with subject to the following terms (Reg. 5.10(2)(b)):-
- Acres Gaming, Inc completes its service of evidence in answer by 21 April 2005.
- I shall not formally grant the extension beyond 23 March 2005 to 21 April 2005 unless and until those terms are met.
- If these terms are not met, I shall refuse the extension beyond 23 March 2005.
This proposed action means that if the applicant cannot complete its second declaration by Mr Spencer by 21 April 2005, it will be precluded from relying on that evidence in the substantive opposition. However, as Mr Savage colourfully put it, the applicant is the “ship of its own disaster”. The applicant must confront the reality of meeting a fixed date, and get in whatever evidence it has ready by that date.
Regulation 5.10 (5) (c) (i) requires that the parties be given a reasonable opportunity to make representations concerning an application or proposed action. Although the reasons in the application for an extension of time to 21 April 2005 were largely known and discussed at the hearing, the application had not been made at that time and the parties may not have had reasonable opportunity to make full representations on it. The parties are invited to make representations or request to be heard in relation to this latest request for an extension of time, including in relation to my proposed terms, within 7 days of the date of this decision. If no objection is filed in this time, I will proceed to specify the above terms in relation to the application for extension of time to 21 April 2005.
COSTS
The opponent submitted that it should be awarded its costs irrespective of the outcome of the hearing. In his reasons for the decision on the extension to 21 February 2005, the delegate stated:
“For this reason, without meaning to prejudice the outcome of any future application for extension of time, I advise the applicant that given the balance of considerations at this stage, a further extension is unlikely to be granted without adequate supporting reasons.”
The opponent placed much weight on this phrase in its objection and in submissions at the hearing. I note the delegate’s decision issued on 21 February 2005, the last day of the extended period, giving the applicant little time to act on the advice and reasons set out in the decision before filing the new application. The applicant appears to have ignored this fact. Of course adequate supporting reasons are generally expected in any case. But as I have noted above, the opponent has understated the progress made by the applicant.
On the other hand, it became apparent at the hearing that a further period beyond the one month requested would be required. As Mr Savage put it, the applicant was seeking extensions by drip-feed. The applicant has stretched, if not exceeded, the limits of what would normally be considered a reasonable timeframe for concluding its evidence.
In all the circumstances, I think each party should bear their own costs. I make no award of costs.
Brendan Bourke
Delegate of the Commissioner of Patents
07 April 2005
Patent attorneys for the applicant : Freehills Patent & Trade Mark Attorneys, Sydney
Patent attorneys for the opponent : Wray & Associates, Perth