Bally Manufacturing Corporation v. D. Gottlieb and Co.

[1983] APO 18

In the Matter of the Patents Act 1952

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In the Matter of Patent Application No. 514400 in the Name of BALLY MANUFACTURING CORPORATION

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In the Matter of Opposition thereto by D. GOTTLIEB AND CO.

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In the Matter of a Request for an Extension of Time within which to Lodge Evidence‑in‑

Answer.

DECISION OF A SUPERVISING EXAMINER OF PATENTS:
         Application No. 514400 by Bally Manufacturing Corporation was advertised accepted on 5 February, 1981, and after the grant of an extension of time, a Notice of Opposition was lodged on 5 August, 1981 by D. Gottlieb and Co.
         The service of evidence‑in‑support was completed on 5 July, 1982, after the grant of several extensions of time.   One of these was objected to, resulting in a Hearing on 31 March, 1982, a Decision on which issued on 5 May, 1982.
         The applicant has already sought, and been granted, three extensions of time, totalling six months, in which to lodge evidence‑in‑answer.   Although an objection to the second of these was lodged, it was subsequently withdrawn.

The applicant is now seeking a fourth extension of time to 5 July, 1983; however on 11 April, 1983 the opponent notified its objection to the granting of this further extension.
         The matter was heard in Canberra on 2 May, 1983.   Mr. W.L. Thomson, patent attorney on behalf of Spruson & Ferguson, Sydney, represented Bally Manufacturing Corporation, and Mr. P.F. Kildea, patent attorney on behalf of Collison & Co., Adelaide, represented D. Gottlieb and Co.
         The request to extend the time for lodging evidence‑in‑answer is based on the following ground;

"Full attention of foreign associates and inventors devoted to preparation of evidence for U.S. Trial presently scheduled for 9th May, 1983, in respect of infringement action brought against D. Gottlieb & Co., U.S. Patent is 4,093,232 and is of related subject matter to present application.   A one month trial Hearing is anticipated and outcome is expected to influence any possible settlement between parties to this Opposition.   Therefore, further time is required for preparation of Applicant's evidence."

There are two aspects to this statement.   Firstly, it indicates that the reason, sufficiently conclusive in its own right, why evidence has not yet been lodged and why further time is required, is that all resources have been directed elsewhere ‑ "Full attention ... devoted to ...".   Implicit in this is a deliberate decision to utilise resources in that particular way in preference to actively seeking and preparing evidence for the proceedings in this country.
         Secondly it suggests the proposition that the outcome of the United States litigation has the potential to influence and assist the proceedings in Australia sufficiently to justify the delay incurred.   I have been referred to the Office decision in Gould Inc. v. Daido Metal Co. Inc. 1981 AOJP 1238, in which part of the headnote reads "overseas legal conflict between the parties concerned not relevant to Reg. 83A".   I believe this headnote is somewhat misleading, as the point at issue in that case appears to be a submission to the effect that because the parties were engaged in legal battles overseas, the opposition mounted in Australia was therefore frivolous.   I do not think that overseas litigation must necessarily be totally disregarded in considering a request for an extension of time to lodge evidence in opposition proceedings. Regulation 83A refers to "having regard to all the circumstances of the case" and I consider that the potential influence of overseas litigation could, in appropriate circumstances, be a relevant factor.   Each case has to be looked at on its own merits.
         On behalf of the opponent, Mr. Kildea has pointed to the existence of several differences between US patent No. 4093232 and Australian application No. 514400 such as the number of claims in each, and differences in the wordings of the main independent claims, asserting in particular that the Australian claims are narrower.   While it is true that these differences do exist, I am nevertheless satisfied that in substance both specifications are directed to the same subject matter and that they correspond sufficiently for an opinion in one jurisdiction to be of interest to another.
         Less in the applicant's favour is a consideration of the issues involved.   The U.S. trial is apparently an infringement action.   It is only an assumption that there is a counter attack on the validity of U.S. Patent No. 4093232, there being no positive indication to that effect, far less an indication of specific grounds therefor.   Without wishing to prejudge the significance of the opponent's evidence‑in‑support, I think it is fair to say that the main thrust of the opponent's attack appears to be the allegation that the invention is obvious, does not involve an inventive step and/or is otherwise not novel.   At the heart of such issues must be the state of the art in Australia at the relevant time, (a time which itself is almost three years later than the corresponding US date) and it does not seem likely that the US proceedings will cast much light on that subject.   In addition, the evidence‑
in‑support cites Australian patent No. 503696 (16978/76) referred to in the evidence‑in‑support as the BRACHA patent.   This began as a Convention application, based on US application No. 633470 lodged on 19 November, 1975 which subsequently matured into US patent No. 4195051; however in the United States that case is later than, and therefore not citable against, US patent No. 4093232 which began as application No. 576980 on 13 May, 1975.   The evidence‑in‑support also contains allegations of prior sales in Australia.   On all these issues it is difficult to conceive how the outcome of the US trial could provide assistance to the proceedings here.   Finally there is the fact that on at least some of these issues the law in Australia is not necessarily the same as in the United States.
         Accordingly I consider that these are good and sufficient reasons for concluding that an extension of time to await the outcome of the US trial is not justified.   In any event, the prospect of useful assistance arising from the US trial would have to be weighed against the inconvenience, contrary to the public interest, of delay while the outcome from the United States is awaited.   Mr. Kildea pointed out that the US trial was stated to be due to start on 9 May, 1983, expected to last one month, followed by an indeterminate delay before the outcome (with perhaps the possibility of an appeal) would be forthcoming.   However he had received advance information that the US trial was to be postponed.   Mr. Thomson stated that he had no knowledge of this, but subsequent to the hearing Mr. Kildea has furnished documents just received from the United States which, I am sure Mr. Thomson would not dispute, confirm that the US trial has been postponed until October 1983.   This is a further compelling reason for not delaying the Australian proceedings pending the US outcome.
         Mr. Thomson, on behalf of the applicant, has presented additional arguments as to why an extension of time should be granted.   He has compared the lengths of, and reasons for, extensions previously granted to either party. He has submitted that the reference, in the applicant's extension application of 27 September, 1982, to negotiations aimed at a possible compromise between the parties, is confirmed by a telex from Collison & Co. to Spruson & Ferguson dated 24 December, 1982 which reads:

"In view of settlement negotiations Gotlieb will now no longer object to extensions requested and will withdraw objections made thus far."

He makes the further point that this telex appears to suggest that the opponent would not oppose the grant of any future extension, and that accordingly the objection to the current request came as a surprise to the applicant.   I would have thought it a rather dubious assumption to infer from the telex that the opponents were giving some sort of unconditional guarantee, and that any such notion should have been dispelled by a subsequent communication, receipt of which has not been denied, to the effect that further extensions would be opposed.   While I am aware that in an Office decision in Little and Little v. Vulcan Australia 1981 AOJP 1886, prior warning that objection would be made was considered to be not relevant to a determination of whether an extension is justified, I believe that in the circumstances of the present case such notice does weaken the applicant's argument that he was justified in not expecting his request to be opposed.
         Of greater significance in my opinion is the fact that the successive applications, made by the applicant for an extension of time, appear to lack consistency in the stated circumstances given as reasons.   Thus:

"A possible compromise in this Opposition is under consideration by both parties and further time will be required to resolve the matter."

"A decision has been made by the Applicant to amend the claims of the application.   Proposals for amendment have been the subject of much correspondence and telephone discussion with the U.S. and local attorneys for the Applicant.   Further time is required to finalise the nature of the amendments and to serve evidence."

"An affidavit is to be obtained from one of the inventors who is presently away on compassionate leave.   Due to his unavailability and vacations by Australian and U.S. attorneys further time is required to finalize evidence and amendments to the claims."

and finally on 5 April, 1983 the grounds quoted earlier in this Decision in support of the current application.   No satisfactory explanation has been offered regarding progress or outcome of the various actions referred to in these stated circumstances.  While the telex of 24 December, 1982 does confirm that some settlement negotiations have taken place, it was claimed by Mr. Kildea, and not denied by Mr. Thomson, that the only negotiations of substance amounted to an offer by the applicant, rejected by the opponent, to restrict the claims by the insertion of"incandescent", presumably as a qualification of "lamps".   No request to amend has been lodged in the Patent Office, and no indication has been given whether it remains the applicant's intention to do so.   The statement of 30 December, 1982 refers to the absence on compassionate leave of one of the (two) inventors; the reference in the latest statement to the current activities of, among others, the inventors, implies that the co‑
inventor is no longer on leave, but there is no indication of progress on these activities which, according to the statement of 30 December, 1982, only required "finalising".
         I agree that the subject matter of the specification, and of the issues raised in the Section 59 Opposition, is technologically complex, and that the applicant, like the opponent, might well experience substantial difficulties in locating suitable experts and/or preparing evidence relevant to these matters, particularly the Australian aspects thereof.   However when addressing me on that point Mr. Thomson gave the impression that he was referring to difficulties the applicant will encounter, rather than to problems already found.   Certainly there has been virtually no indication of difficulties actually experienced, what progress has been made, the nature of the evidence expected to be lodged, and an anticipated date for its lodgement. The absence of information on these points may be the result of the "full attention" of the applicant being directed elsewhere, as stated on the current Application for an Extension of Time.
         I am aware of the decision of the Federal Court of Australia in Erling Vangedal‑Nielsen and others v. Commissioner of Patents and Gelphen Nominees 51 AOJP 298 which makes it clear that the onus is on the party, seeking an extension of time to lodge evidence, to establish an appropriate case to justify the request.  For the reasons indicated I do not consider that the present applicant has fulfilled these obligations.   On the other hand I am satisfied that in the present case the subject matter and issues involved are complex, and that the preparation of evidence in such circumstances is necessarily a lengthy process. The statement of 30 December, 1982 does refer to the finalisation of evidence, and despite the absence of any other indications of such activity, I am concerned about the possibility that evidence‑in‑answer may in fact be substantially part‑prepared and I am reluctant to deprive the applicant of a final opportunity to complete and lodge such evidence.   Ideally I would have preferred to grant an extension for part only of the time sought; however delays have already occurred between request and hearing, and between hearing and this decision, with the result that the time remaining from the requested period is already so short that further curtailment is pointless.   Accordingly I shall grant the extension for the period sought and strictly for the purpose indicated above; it should not be necessary to point out that any future request will not be entertained unless the circumstances are vastly different.
         Since I have granted the extension for reasons other than those given in the grounds accompanying the application, I award costs against the applicant.

(G.R. BROWN)