Aristocrat Technologies Australia Pty Ltd v Acres Gaming Inc - [2005] APO 2

NOTICE
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 754689 in the name of Aristocrat Technologies Australia Pty Ltd

Title: Slot Machine Game and System with Improved Jackpot Feature

Action: Request for an extension of time to serve evidence in support of an opposition by Acres Gaming Inc.

Decision: Issued 17 January 2005 .
Abstract
A satisfactory explanation for the delay was given. The extension of time was allowed.

Aristocrat was justified in objecting to the current extension, as it appeared to be inconsistent with the reasons given for previous extensions of time and as little progress appeared to have been made. Nevertheless, a satisfactory explanation for the delay in the current extension was given.
Furthermore considering the nature of the evidence that is intended to be served, it was considered to be in the public interest to allow the extension. In particular, it was considered that the proposed Dimond declaration could address the issues raised in the statement of grounds and particulars.
Acres was considered to be less than diligent in completing its evidence in support and consequently, no award of costs was made.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No.754689 by Aristocrat Technologies Australia Pty Ltd and a request for an extension of time in which to serve evidence in support of an opposition by Acres Gaming Inc.

BACKGROUND

Patent application 754689 in the name of Aristocrat Technologies Australia Pty Ltd (hereafter referred to as Aristocrat) was advertised accepted on 21 November 2002. Acres Gaming, Inc (hereafter referred to as Acres) filed a notice of opposition on 21 February 2003. The time for serving evidence in support had been extended until 21 November 2004 without objection. Aristocrat has objected to the latest request to extend the time for service of evidence in support to 21 January 2005.
The matter was heard in Canberra on 16 December 2004. Boris Golja, patent attorney of Wray & Associates, who appeared by telephone, represented Acres. Mr Chris Owens, patent attorney of F B Rice & Co, Sydney represented Aristocrat. Both parties filed written submissions prior to the hearing.
Previous extensions
Evidence in support was due to be filed by 21 August 2003. Further extensions were given on 21 November 2003, 21 February 2004, 21 May 2004, 21 August 2004 and the last was given on 21 November 2004. Partial evidence in support containing the patent specifications that were particularised in the statement of grounds and particulars (herein after referred to as SGP) was filed on 21 May 2004. Aristocrat did not object to any of the previous extensions.
Current extension
In the current extension, an unnamed expert has being retained to provide evidence of common general knowledge. As yet the expert has not had the time within which to provide this evidence. The expert is also involved in another opposition and has being required to spend time abroad. Further, the expert witness has been unavailable for six weeks during the extension period. Acres have also attempted to locate an additional expert in case the current expert becomes unavailable; however at this stage, Acres have not being successful.
Aristocrat has objected to the current extension. In its letter of objection, Aristocrat made the following points.
- that Acres have already had 18 months in which to file evidence in support,
- that to date, only a declaration exhibiting the 18 allegedly prior art documents has being filed,
- that in the opinion of the Aristocrat, none of the documents are particular relevant to novelty,
- that no evidence on common general knowledge has being filed,
- that the name of the witness has not being identified, and
- that it would appear that the opponent is simply stalling.
The law on extensions of time
The relevant law on the extension of time to serve evidence in opposition matters is governed by Patents Regulations 5.10(2) and 5.10(5).
“5.10(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).”
Sub- regulation 5.10(5) provides
“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.”
The law on extension of time is well established. See Ferocem Pty Ltd v Commissioner of Patents (1994) 28 IPR 243, A Goninan & Co Ltd v Commissioner of Patents (1997) 38 IPR 213 and National Starch & Chemical Company v Commissioner of Patents [2001] FCA 33. These cases have established the following principles:
(a) The power is discretionary.
Regulation 5.10 confers a broad discretion, which cannot be reduced to an imperative compliance with particular requirements: Ferocem at 247-8 and Goninan at 220. Rather it is necessary to give proper, genuine and realistic consideration to all relevant aspects of the case. Relevant aspects include:
(b) Explanation of the delay
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: Ferocem at 247.
(c) The public interest
The public interest in determining a serious opposition on its merits is a relevant consideration: Goninan at 222. It is necessary to consider the nature of the evidence the opponent seeks to adduce and the significance of that evidence in opposition proceedings: Goninan at 225-6. The significance of the evidence is to be assessed on any relevant material, including the context of the patent specification, the grounds of opposition and the particulars of the grounds and the material which had already been filed, the role and importance of experts in an opposition proceeding: National Starch at 33. The delegate also needs to consider whether an extension should be granted to permit the opponent to rely on evidence that is immediately available: Goninan at 255. Even if some evidence has been filed, the delegate still needs to consider whether an extension to allow further evidence is appropriate having regard to the public interest: Goninan at 255. The effect of delays on the efficient and orderly administration of the Patents Office is also a relevant consideration: Goninan at 222.
(d) The interests of the party seeking the extension
The interests of the party seeking the extension are a relevant consideration: Ferocem at 247.
(e) The interests of other parties involved in the opposition
It is relevant to consider the disadvantages to the other party of delays in determining the Opposition: Goninan at 222.
DECISION
Submissions by the opponent (Acres)
As previously stated Acres filed written submissions on its behalf. Acres also filed a draft declaration by Phillip Charles Dimond (hereinafter called the Dimond declaration). Mr Golja made the following submissions on the extension of time.
- the key focus in the opposition is novelty and inventive step,
- the application under opposition contains 69 claims, four of which are independent claims,
·the prior art submitted in the opposition is relevant notwithstanding the comments of the applicant in this matter,
- the nature of the additional evidence that is sought to be adduced by the expert has been identified,
- it is in the public interest that the opponent ought to be allowed to file its evidence,
- since filing the request, Acres has progressed in its development of the evidence in support,
- a draft declaration has been produced and while further development is required, it addresses the matters identified in the statement of grounds and particulars,
- Acres are waiting for a reply from a further potential witness, and that
- there has being difficulty in locating witnesses, as the applicant possesses a high profile in the gaming industry that causes potential witnesses a conflict of interest.
- while Dimond was an employee of the opponent, he is currently a consultant to Acres, so Acres do not have control of his workloads.
- a similar factual situation (obtaining of an expert witness) occurred between the parties in 752636 and is reported as Aristocrat Technologies Australia Pty Ltd v Acres Gaming, Inc [2004] APO 31 (30 November 2004). This is a case in which the delegate allowed the extension.
Submissions by the patent applicant (Aristocrat)
Aristocrat made a number of observations on the SGP, in particular, that the particulars listed; 18 documents in relation to novelty and invent step, 34 items of common general knowledge, and alleged prior use relating to the DACOM and CASHCADE systems. However, apart from the 18 documents being filed, no evidence has being served. Aristocrat argued that;
·the opponent has already had 18 months in which to serve evidence in support,
·the second expert has not being identified,
·the opponent is on a fishing exercise, this is delay for the sake of delay,
·the reasons given are inconsistent with those given in previous extensions,
·the Draft declaration does not discuss common general knowledge,
·the expert, Dimond is an employee of the opponent so they would have control of his workloads etc, and
·the opponent is still collecting evidence from its expert and is not ready (at 21 November 2004) to commence drafting of its declarations.
In arguing its point on the lack of progress, Aristocrat referred to the history of the extensions.
·in the first extension, more time was required to identify a suitable expert witness/es and prepare their evidence in support,
·in the second extension, an expert had been identified and contacted and another expert had been identified but more time was required to conclude their evidence,
·in the third extension, delays had occurred during the holiday period,
·in the fourth extension, the Golja declaration, exhibiting 18 documents was filed, and further time was required on the structure of the evidence between the respective witnesses, and
·in the fifth extension, determination of the structure of the evidence had progressed and evidence was due to be placed in declaration form. It was anticipated that the evidence would be concluded by the end of the requested period.
In the sixth and current extension, a further 2 months extension was ought. Aristocrat argued that the despite the progress that was stated to have occurred in the previous extensions, more time was still required in which to enable the expert to provide the necessary information and to incorporate it a declarative form. Aristocrat argued that this was inconsistent with the reasons put forward in the previous extensions. Aristocrat took the view that up to the current extension, progress was being made and that the reason put forward by the opponent suggested that little progress had in fact occurred.
Aristocrat made the observation that the unnamed expert was probably Mr Dimond who was also the opponent’s expert in an opposition on 751088. In that extension, Aristocrat submitted that the expert was unavailable for a few days whereas in the current extension the expert was unavailable for the past six weeks. Mr Dimond, according to Aristocrat, is an employee of IGT that has a controlling interest in Acres Gaming and that from 1999 Mr Dimond has been IGT’s representative in Australia. Therefore, according to the submission, Mr Dimond is not an independent witness per se but rather a witness who has a long tem relationship with the opponent and thus his time is under the control of the opponent.
In summary, Aristocrat submitted that little progress has been made in the opposition as only 18 documents have been served. Thus, it is the applicant’s view that it is in no better position to understand the case against them. Aristocrat further submitted that the current extension makes no mention of the further witness and surmises that the opponent may not even know what the declarations will contain.
(a) Explanation of the delay
The circumstances upon which the extension was sought are as follows:
“The prior art particularised in the Statement of Grounds and Particulars is considered highly relevant to the claimed invention. However, to establish its relevance to the standard required to render the claimed invention not novel and lacking in inventive step, evidence from a skilled addressee and evidence as to common general knowledge in the art is required.
The information required from the skilled addressee and common general knowledge to supplement the disclosures in the prior art documents, particularised in the Statement of Grounds and Particulars, has been determined. The expert, who has been retained to provide evidence of a skilled addressee and common general knowledge, has been provided with documentation for review and consideration. At the time that the previous extension of time application to serve evidence in support was filed, it was anticipated that the evidence in support would be concluded within the current extension period. However, the information required from the expert has not yet been received, as the expert has not yet been able to allocate the required time to undertake and complete this task. This has arisen due to a combination of factors, including the expert’s normal occupational duties and the fact that the expert has been retained arid actively involved in preparation of evidence on other patent opposition matters for the opponent. Additionally, in the current extension period, the expert indicated his unavailability for evidence preparation for periods in the past six weeks, including as a result of work related absence abroad. Apart from normal occupational duties here in Australia, the expert is, from time to time, required abroad and such absences can be at short notice. These events have significantly hampered the expert’s ability to give attention to this matter. The expert ha also been canvassed for upcoming availability and has indicated that he will not be available for at least three weeks bridging December 2004 and January 2005 and will be unavailable for a period of time later into the new year.
Whilst this extension has been requested to enable the expert to provide the necessary information and its incorporation into declaration form, it has been noted that the expert may be periodically called abroad. Whilst no indication of such absences of the expert being currently scheduled has been given at this stage, the applicant has sought to retain an alternative exert witness as a precaution in case the current expert witness becomes unavailable. The applicant had previously sought to retain other expert witnesses, but was unable to locate a suitable witness. Accordingly, the applicant is taking steps to ensure that its evidence is completed as soon as possible.
This is a serious opposition; as stated at the outset of this application for extension of time, the prior art is considered by the applicant as highly relevant to the claimed invention. However, the evidence of a skilled addressee expert is required and is an important part of the opponent’s evidence.
Such evidence is not generally available to an examiner during the examination stage of a patent application. Such evidence is, nevertheless, material to novelty and inventive step and therefore to the validity of a patent that may be granted on the application. As such evidence is not normally available during the examination stage, the opponent should be given the necessary opportunity to present that evidence. It is also in the public interest that such evidence is allowed to be served and filed so that a patent is not granted on an application with claims that would be invalid in light of that evidence.
Accordingly, a two month extension of time to serve the evidence in support (from 21 November 2004 to 21 January 2005) is being requested so as to enable time to obtain the information required from the expert and to incorporate this into declarations for execution.”
Inability to obtain an expert
Acres argued that in the art of gaming machines it is difficult to obtain expert witnesses and that the same factual situation arose between the parties in Aristocrat Technologies (supra). In that case, the delegate accepted the submission from the opponent, Aristocrat that it is “difficult to locate experts due to the fact that there are few companies involved in the field.” In the current extension, Acres submit that the patent applicant possesses a high profile in the Australian gaming industry and that this can cause potential expert witnesses to be placed in a conflict situation or unwilling to act in matters against the applicant in view of their relationship (or potential relationship) with the applicant. I accept the submission that it is difficult to locate potential witnesses.
Identity of the expert
There was some discussion during the hearing on the naming of the expert and his employment history including his association with the opponent. While little seems to hang on the naming of the expert, it is now known that Mr Dimond will be an expert witness for the opponent and that he is the expert witness in another opposition. Acres have submitted that this has impacted upon Mr Dimond’s ability to allocate sufficient time in which to prepare the declaration.
Explanation of the delay
While the appropriate time to discuss Mr Dimond’s relationship with the opponent is at the substantive hearing, this relationship has a bearing on his ability to provide advice. Aristocrat argued that Mr Dimond’s time was controllable by Acres, while the opponent argued that the relationship was not one of employer-employee but rather one of consultancy. The draft declaration at paragraph 2 (e) supports the opponent’s case.
“(e) From 1999 until October 2004 I have operated as a consultant contracted to Acres, being their representative in Australia. I provided consultancy services in a number of areas, including technical support of Acre’s products in Australia. Since October 2004, I have operated as a consultant with IGT Advantage Systems.”
While this is an undeclared declaration and remains untested, it provides a reasonable explanation for the delay and so I think it is appropriate to accept Acres view on this matter and conclude that Acres did not have the control of Mr Dimond’s time as would be expected in an employer-employee relationship.
The time taken for the expert to finalise the evidence of the expert witness is a relevant matter. Acres have submitted that the combined problems of finding an expert in the field plus dealing with the witness’s workloads and period of absences has meant that the time frames for completion of the evidence have not been met. In the context of the current extension, this appears to be a reasonable explanation.
Acres have also provided further comments on the second expert. Mr Golja stated that the second expert has being sought in case the time commitments for the current expert prevent him from completing the evidence in time and that Acres are currently awaiting a response from this expert. Mr Golja submitted that this was an additional step that Acres have undertaken in order to complete the evidence as soon as possible. I would agree with Mr Golja that this is a prudent step in assisting the completion of the evidence in support.

In my view, Acres have satisfactorily explained the delay for the current extension. However, given the history of the extensions, it not clear why so little progress seems to have been made. At the date of the hearing, a draft declaration merely detailing Mr Dimond’s experience was submitted. There is apparently no information on when Mr Dimond took on the role as an expert witness. The reasons for the previous extensions would suggest that an expert witness has been retained for some time. The only apparent work that appears to have been done is the supply of citations and a consideration of what the evidence will address. The former does not involve much work as it merely involved supplying photocopies of patent documents. The latter may well involve some detailed consideration but this would not fully explain the time taken to date. I can only reasonably conclude that Acres have been less than diligent with the preparation of its evidence in support.
(b) The public interest
The public interest lies in having a serious opposition determined on its merits. The grounds of opposition particularise lack of manner of manufacture, lack of novelty and inventive step, and some s40 matters. The grounds refer to a large number of documents that have already being put into evidence. Matters 3(a) to (hh) in the SGP refer to allegations of common general knowledge. The DACOM and CASHADE systems in 3(d) are alleged to be prior uses. The proposed declaration is likely to be important in the opposition proceedings and given the matters referred to in the SGP, declarative evidence on the state of common general knowledge in Australia is a relevant issue in having the opposition determined on its merits.
In its written submissions, Acres put that evidence that is sought to be prepared includes the following aspects which are asserted to be reflected in the SGP:
·the use of “second games” in gaming machines (in addition to the main game),
·the nature of such second games and the form they can take,
·triggering of such second games in gaming machines,
·the types and aspects of triggers used for such second games,
·activation of such second games upon a trigger occurring, and.
·the manner in which and factors that influence how gaming machine play outcomes are statistically determined and the relationship to the predetermined likelihood (probability) of outcomes occurring.
Reviewing the SGP, I can see that the evidence that is sought to be prepared is not based on “matters not referred to (either directly or by clear implication) in the statement of grounds and particulars": Schering-Plough Animal Health Limited v Crompton Corporation [2003] APO 45 (14 October 2003) citing Kent-Moore Corp v Environmental Products Amalgamated Pty Ltd (1992) 25 IPR 233 at 241. I conclude that the evidence of the expert witness is likely to be relevant to the opposition and I am satisfied that an explanation has been provided that is relevant (by clear implication) to the particulars filed in this opposition.
(c) The interests of the party seeking the extension
The interest of Acres lies in allowing the extension so that all relevant matters can be considered.
Both parties submitted that the factual situation in National Starch (supra) support their respective cases. Aristocrat argued that in that factual elements distinguished the situation from the current one. Aristocrat submitted in that case the opponent had only had 4 months, and that while some documentary evidence was filed, a suitable expert had not been named. This was to be contrasted with the current extension in which 18 months had elapsed. Acres argued that the elements of National Starch (supra) were present in the current extension. While there is some similarity with the facts, it is the principles of National Starch (supra) that need to be applied and that the submission of Mr Golja, on this point, is to be preferred.
(d) The interests of other parties involved in the opposition
The interests of Aristocrat and the Patents Office clearly lie against allowance of the extension. In particular, Aristocrat submitted that they were “severely disadvantaged by the delay in the grant of their patent.”
The balance of considerations
I have been given a satisfactory explanation for the delay, and given the nature of the evidence that will be served, it is my view that it is in the public interest to allow the extension. In particular, Acres has satisfied me that the proposed Dimond declaration will address the issues raised in the statement of grounds and particulars. The interests of Aristocrat and Acres appear to be opposed, and largely offsetting. The effects of delays on the efficient and orderly administration of the Patents Office appear to be a minor consideration. In the present case, the matter should thus be determined in line with the public interest, and the extension should be allowed.
CONCLUSION
I allow an extension of time from 21 November 2004 to 21 January 2005 in order for Acres to serve its evidence in support. I expect Acres to be expeditious in completing its evidence in support within the current extended time. In relation to this expectation, the case of Cadbury Schweppes Pty Ltd ACN 004 551 473 v Darrell Lea Chocolate Shops Pty Ltd ACN 000 498 386 [2004] FCA 1718 (23 December 2004) at paras 22, 23 9quoted below) may be relevant.
“22 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. In my view, the present case can be assimilated to the first category postulated in these terms by Wilcox and Gummow JJ in Lenijamar (supra) at 396;
‘The discretion conferred by O 10, r 7 is unconfined, except for the condition of non-compliance with a direction. As it is impossible to foresee all of the circumstances under which the rule might be sought to be used, it is undesirable to make any exhaustive statement of the circumstances under which the power granted by the rule will appropriately be exercised. We will not attempt to do so. But two situations are obvious candidates for the exercise of the power: cases in which the history of non-compliance by an applicant is such as to indicate an inability or unwillingness to co-operate with the Court and the other party or parties in having the matter ready for trial within an acceptable period and cases - whatever the applicant's state of mind or resources - in which the non-compliance is continuing and occasioning unnecessary delay, expense or other prejudice to the respondent. Although the history of the matter will always be relevant, it is more likely to be decisive in the first of these two situations. Even though the most recent non-compliance may be minor, the cumulative effect of an applicant's defaults may be such as to satisfy the judge that the applicant is either subjectively unwilling to co-operate or, for some reason, is unable to do so. Such a conclusion would not readily be reached; but, where it was, fairness to the respondent would normally require the summary dismissal of the proceeding.’
23 Those observations were cited with approval by R D Nicholson J in Brown v Zomba Music Publishers Australia Pty Ltd [2004] FCA 324 and, although O10 r 7 has since been repealed I consider that they can be paraphrased to apply with equal force to the discretion which the Court is presently required to exercise under O 35A r 3.”
COSTS
Both parties asked for an award of costs. The power to award costs is based on section 210 and regulation 22.8. The normal practice is that costs should follow the event. Acres have been successful in its request for an extension of time to 21 January 2005 in which to file evidence in support of its opposition.
It is not uncommon in extension of time proceedings for no award of costs to be made; See recent examples of Zenon Environmental Inc v Memcor Australia Pty Ltd [2004] APO 16 (8 July 2004) and Statens Serum Institut v Octapharma AG [2004] APO 23 (26 August 2004). During its submissions, Aristocrat argued that the current extension was merely delay for the sake of delay.
“…the opponent is merely employing stalling tactics in the hope of finding further evidence and is not in a position to mount a bona fide Opposition.”
I share the view of Aristocrat that little progress had been made in 18 months and that previous extensions gave the impression that more progress had been made wherein fact little progress seems to have occured. I accept that Aristocrat were justified in objecting to the current extension as it was inconsistent with the reasons given in the previous extensions.
While I have allowed the extension of time in which to serve evidence in support of the opposition, I view Acres at being less than diligent in completion of its evidence in support. Consequently, I make no award of costs.
G.M.Cox
Delegate of the Commissioner of Patents
Patent attorneys for the applicant : F.B Rice & Co, Sydney
Patent attorneys for the opponent :Wray & associates, Perth