BHP Minerals International, Inc v Minara Resources Limited
[2006] APO 41
•20 December 2006
OFFICIAL NOTICE
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 2001255204 in the name of BHP MINERALS INTERNATIONAL, INC.
Title: Heap Leaching of Nickel Containing Ore with Sulfuric Acid
Action: Opposition under Section 59 by MINARA RESOURCES LIMITED, and objection to an application under Regulation 5.10(2) for an extension of time in which to serve evidence in support
Decision: Issued 20 December 2006 .
Abstract
This was an opposition to a request for an extension of time of three months to file evidence in support. Two previous extensions of three months each had already been granted. At the time the applicant indicated its objection to the extension some evidence in support had already been served, but nothing in the way of expert evidence. The request for the extension stated it was for the purpose of filing expert evidence. Subsequently, one statutory declaration constituting expert evidence was filed prior to the hearing. It emerged at the hearing that the opponent had in train the declarations of three other experts. The opponent attributed the delay in obtaining the declarations in question to other priorities of the experts and communication difficulties peculiar to the field in which the experts were involved, namely the mining industry
The extension was allowed. The public interest and the interest of the opponent, which were in favour of the extension, were considered to outweigh the interest of the applicant, which was against the extension. The factors bearing upon whether an adequate justification for the delay had been provided seemed also to favour the extension being granted.
Costs were awarded against the applicant.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No. 2001255204 by BHP Minerals International, Inc., opposition under section 59 by Minara Resources Limited, and objection to an application under regulation 5.10(2) for an extension of time in which to serve evidence in support.
BACKGROUND
Patent application 2001255204 was filed on 29 March 2001 by BHP Minerals International, Inc. (BHP) as International Application PCT/US2002/010137. It claims priority from US patent application 09/539,063 filed on 30 March 2000. Application 2001255204 was advertised accepted on 28 July 2005.
Minara Resources Limited (Minara) filed a notice of opposition to the grant of a patent on 28 October 2005. On 27 January 2006 Minara served its statement of grounds and particulars and so far has obtained two extensions of time totalling six months to file its evidence in support. Some part-evidence in support was filed during that period. On 30 October 2006 Minara requested a further three month extension of time to 30 January 2007 in which to serve the remainder of its evidence in support. This third extension of time was objected to by BHP.
The matter was heard in Canberra on 5 December 2006. The party objecting to the extension of time (that is, BHP) opted not to appear, and instead relied on written submissions by Greg Munt, patent attorney of the firm Griffith Hack, Melbourne. Minara was represented at the hearing by Peter Caporn, patent attorney of the firm Wray & Associates, Perth. Mr Caporn also provided written submissions. Both sets of written submissions were of considerable assistance in determining this matter.
REASONS FOR THE EXTENSION OF TIME
The circumstances and grounds for requiring the third extension of time are as follows:
"Further time is required for the Opponent to finalise its evidence in support in this matter.
Since the filing of the previous extension application one completed declaration has been forwarded to the appropriate expert, we expect to receive the executed declaration within a matter of days of filing this application. This declaration will then be ready to file and serve as part of the Opponent’s Evidence in Support.
The remaining expert witnesses identified to provide evidence are close to finalising their declarations. These experts have each been away for a large period of the past three months as a result of ongoing work and travel commitments, over which we have little influence.
Despite this, it is expected that the remaining three expert witness declarations forming part of the Evidence in Support will be finalised, executed, served and filed within the extension period presently sought.
The Opponent continues to work assiduously towards finalisation and service of evidence-in-support."
The previous (that is, second) application for an extension of time had the same first and last (fifth) paragraphs, while the second, third and fourth paragraphs read as follows:
“Since the filing of the previous extension application the expert witnesses identified to provide evidence have progressed to advanced stages of the preparation of their draft declarations.
Whilst each of the expert witnesses has held various work and travel commitments to attend to during the last extension period, as may be expected of independent consultants, it is expected that the actions required for the finalisation of the evidence in support will be completed in the extension period presently sought.
As such, additional time is required for the consideration of the draft declarations by the declarants, the final settling of the draft declarations by Counsel, and finally execution and service.”
The first application for an extension of time similarly employed the same first and last (fourth) paragraphs, while the second and third paragraphs were:
“In recent months potential expert witnesses have been identified and initial interviews have been conducted. As a result of these interviews, a number of experts were identified to provide evidence. Formal briefings of these witnesses have been conducted and draft statutory declarations prepared.
Additional time is required for the consideration and amendment of the draft declarations by the declarants, the settling of the draft declarations by Counsel, and finally execution and service.”
THE LAW
Chapter 5 of the Patents Regulations sets out the procedure and time limits governing opposition proceedings. According to regulation 5.8, the time for serving evidence in support of an opposition is three months from the date of serving the statement of grounds and particulars. A party to an opposition may apply to the Commissioner to extend this time limit pursuant to regulation 5.10(2):
"The Commissioner may 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 5.3AA, paragraph 5.4(a) or subparagraph 5.8(1)(a)(i)):
(a) on the application of a party in the approved form; and
(b) on such reasonable terms (if any) as the Commissioner specifies; and
(c) after the party has served a copy of the application on the other party."
Regulation 5.10(5) relevantly provides that before granting an extension of time I must be reasonably satisfied that the extension is appropriate in all the circumstances, and in this I am guided by the well established principles set out in Ferocem Pty Ltd v Commissioner of Patents 28 IPR 243 and A Goninan & Co Ltd v Commissioner of Patents 38 IPR 213.
These principles do not demand an imperative compliance with particular requirements, but rather, as stated by Burchett J in Ferocem, involve:
"a balancing exercise, in which competing considerations must be taken into account. There are the interests of the persons directly concerned in the application and opposition in question. There are also 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 costs, of efficiency, and of insistence upon the professional standards being maintained by those who deal with the office. But they also include, as Kitto J pointed out in Kaiser Aluminium & Chemical Company v Reynolds Metal Co (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.'"
10. In Goninan Sackville J said that in order to give proper consideration to the public interest in opposition proceedings being determined on their merits, it is necessary to consider the nature of the evidence for which the extension of time is sought and the significance of that evidence for the opposition. The principles applicable to the broad discretion conferred by regulation 5.10 to grant extensions of time were more recently considered in National Starch & Chemical Company v Commissioner of Patents 50 IPR 398 where Goldberg J went further in saying that, in the absence of direct material on the point, the significance of the evidence sought to be adduced might be determined from:
· the technical nature of the invention apparent on the face of the specification;
· the technical nature of the documents referred to in the statement of grounds and particulars;
· the statement of grounds of opposition and the particulars relating to each ground;
· the role and importance of experts in an opposition proceeding; and
· statements in submissions by the party seeking the extension on the nature of the evidence to be relied upon.
11. Finally, regard must also be had to the comments of the Administrative Appeals Tribunal in Sanyo v Commissioner of Patents 36 IPR 470 at 479:
"The decisions of the courts concerning the approach to be taken to the exercise of a discretion to extend time are now well established and include:
· in the absence of nominated factors against which the discretion is to be exercised, regard should be had to the 'subject matter, scope and purpose of the Act': per Mason J (as he then was) in Minister for Aboriginal Affairs v Peko-Wallsend Ltd(1986) 162 CLR 24 at 39-40; 66 ALR 299. A further exposition of this is provided by the comments of Davies J in Chalk v Commissioner for Superannuation (1994) 50 FCR 150 at 154 where he said '……the discretion should be exercised by reference to the words of the statute and the context within which the discretion is conferred';
· while the applicant has the burden of placing before the tribunal the circumstances which it claims will justify the grant of an extension of time, that does not amount to a burden of proof and it is not appropriate that it should be so described: McDonald v Director-General of Social Security (1984) 1 FCR 354 per Woodward J at 357 and Jenkinson J at 368-9: Australian Broadcasting Tribunal V Bond Corp Holdings Ltd (1989) 86 ALR 424 at 432 per Burchett J;
· it is 'more important to consider the consequences of extending or refusing to extend time than debate the reasons why the act was not done in time': per Davies J in Chalk's case, at 156, with whom Black CJ and Cooper J agreed. Similar comments are to be found in Comcare v A'Hearn (1993) 119 ALR 85, particularly at 88;
· actions of the agent of a principal should not necessarily be regarded as being the actions of the principal: A'Hearn's case;
· a legislative provision providing for the exercise of a discretion to extend time is beneficial in nature and should be applied beneficially: Davies J in Chalk's case at 155."
12. I will take these principles into account when deciding whether the presently sought extension of time is appropriate in all the circumstances.
SUBMISSIONS
13. In his written submissions for BHP, Mr Munt commenced by drawing attention to two other current oppositions which involve basically the same parties as in the present matter, and in which he alleged that Minara’s conduct had been the same as in the present matter. After a brief outline of the relevant law (upon which the parties do not differ), Mr Munt went on to criticise the lack of detailed information given in the circumstances and grounds for requesting the extensions, even to the extent of not having revealed the names of the experts whose evidence is the cause of the delay. He also criticised the lack of progress in finalising the evidence since the first extension application, and said that this indicates that Minara is not progressing preparation of evidence with the diligence expected of a serious opponent. (I note, however, that since these submissions were filed Minara has served one of the four statutory declarations by “experts” - namely a declaration by Rodney D. Elvish - that it is intending to serve to complete its evidence in support). Mr Munt then stated that the reasons provided by Minara for the delay in preparing the evidence in support relate to the availability of experts, rather than the complexity or volume of evidence being prepared. He submitted that the fact that an expert is overseas is not an impediment to preparing a statutory declaration in view of modern communications, and cited Coflexip v Stolt Comex Seaway A/S [1995] APO 58 and as applied in Eleven Lighting Pty Limited v Interium Pty Ltd [2002]APO 25 in support of this.
14. Mr Munt went on to draw attention to the public interest considerations in not prolonging the opposition process indefinitely. He put BHP’s interest as being in the economic, efficient and expedient progression of the opposition, noting (with some evidentiary support) that Minara intended to commercialise the technology “in the field of the …… opposed specification”.
15. In his submissions, Mr Caporn, after discussing the relevant law, submitted that experts in the present art are a special case in terms of the ease of communicating with them:
“Consultants in mining and related industries are by their very nature often unavailable and also geographically isolated. Further, in such locations telephone and internet facilities can often be unreliable.”
16. He was able to provide additional information over that given in the request for the extension of time. It seems that there are four expert declarants involved. As has already been mentioned, the declaration of one of these has now been served, and my impression from what has been stated by Mr Caporn in his submissions is that two of the other three declarations are close to finalisation. The fourth declaration is more vexatious, as the “expert” apparently lives in Zimbabwe and Mr Caporn did not seem overly confident that his evidence could be obtained within the extension now being sought.
17. At the hearing, Mr Caporn explained the reluctance of Minara to identify its “experts” as being due to a concern on the part of the experts that to do so may be prejudicial to their employment opportunities in the mining industry.
18. Mr Caporn seemed to concede that explanation of the delay may be a little wanting by citing Ferocem [supra] on the principle that sufficient detail regarding the circumstances and reasons for needing the extension was not a mandatory requirement, and that the Commissioner need only be “reasonably satisfied that an extension of time is appropriate”. He cited Cadbury Schweppes Pty Ltd v Wm Wrigley Jr. Company [2006] APO 35 as an instance where this principle had been applied. He argued that recent decisions of the Federal Court have made it particularly difficult to undertake the gathering of such expert evidence in anything other than a careful and well-considered manner. This was apparently a reference to comments made by the Federal Court in Minnesota Mining and Manufacturing Co. v Tyco Electronics Pty Ltd (2002) 56 IPR 248 at 45.
19. On the various interests involved, Mr Caporn acknowledged that BHP has a legitimate interest in the expeditious disposal of the proceedings. He also acknowledged that it is generally in the public interest that opposition proceedings be settled expeditiously. However, he noted the findings in authoritative cases such as Ferocem [supra] and Goninan [supra] that a balance is to be sought between this requirement and the requirement that a serious opposition be dealt with on its merits. He asserted that the evidence filed so far established that a serious opposition is in train.
20. Finally, Mr Caporn contended that a consideration in this matter is that the subject matter of the present application is very technical and complex, and requires a substantial quantity of evidence to address all of the issues. He cited Wellcome Foundation v Peptide Technology Ltd 14 IPR 567 as a precedent for the complexity of the technology being an issue justifying an extension time to allow an extension of time.
DECISION
The explanation of the delay
21. The first observation I wish to make as regards the delay is that, at nine months of extensions, as these things go it is not particularly large. However it is also understandable that BHP should be feeling some unease at the uninformative nature of the reasons for delay given in the requests for an extension of time. The reasons that are given (basically, inattention of the experts retained by Minara to their task) leave a lot to be desired. Nonetheless, the reasons given also indicate to me that steady progress is being made towards completion of the evidence in support.
22. A consideration suggesting that the delay is not unreasonable lies in the subject matter of the invention, which relates to the extraction of nickel from ore. While Minara’s claim that the subject matter “is very technical and complex” seems to overstate the situation somewhat, it also seems that the claimed invention might raise inventive step issues. This is in view of the fact that it uses an admitted prior art process, but in respect of a purportedly new (in the sense of “different”) mineral, and that the invention appears to, at least partly, lie in the choice of particular parametric values. In these circumstances it is understandable that an opponent may want to garner its expert evidence carefully.
23. However, in saying that I should also observe that I do not see Minnesota Mining and Manufacturing Co. v Tyco Electronics Pty Ltd [supra] as providing any basis for delay. Mr Caporn stated that as a result of this decision parties to opposition proceedings were now required to obtain expert evidence in two stages, the first being evidence of the common general knowledge and the meaning of technical terms in the art and the second being evidence of the construction of documents and the existence or otherwise of an inventive step. The reason for this is said to be because of the need to avoid exposing the declarant to the complete specification and other documents before and during the first stage in order that the declarant’s evidence on the common general knowledge and the meaning of technical terms in the art not be tainted by ex-post facto factors. I do not see this as being an implication of the comments made in the Minnesota Mining and Manufacturing Co. v Tyco Electronics Pty Ltd decision. I think what the court was doing in this decision was questioning the relevance of any evidence as to the construction of documents and the obviousness of an invention, not just because of the ex-post facto problem, but because of other factors, such as it being exclusively the role of a court (or tribunal) to make determinations as to these things, and such as whether experts in technical matters are even equipped to express authoritative views on such legally complex issues like obviousness. In doing so the court was following a long line of decisions at least back to British Celanese Ltd.v Courtaulds Ltd. House of Lords ( 1935) 52 RPC 171 at 196 in which Lord Tomlin stated:
The area of the territory in which cases of this kind an expert witness may legitimately move is not doubtful. He is entitled to give evidence as to the state of the art at any given time. He is entitled to explain the meaning of any technical terms used in the art. He is entitled to say whether in his opinion that which is described in the specification on a given hypothesis as to its meaning is capable of being carried into effect by a skilled worker. He is entitled to say what at a given time to him as skilled in the art a given piece of apparatus or a given sentence on any given hypothesis as to its meaning would have taught or suggested to him. He is entitled to say whether in his opinion a particular operation in connexion with the art could be carried out and generally to give any explanation required as to facts of a scientific kind.
He is not entitled to say nor is Counsel entitled to ask him what the Specification means, nor does the question become any more admissible if it takes the form of asking him what it means to him as an engineer or as a chemist. Nor is he entitled to say whether any given step or alteration is obvious, that being a question for the Court.
24. Minara also sought to justify the delay in filing its evidence in support on the fact that its experts are, apparently, frequently incommunicado. In this era of the “global village” I am a little sceptical as to how communication could be a real impediment to the evidence gathering process. Nevertheless, I have no basis to dismiss this factor out of hand as being a cause of delay. However, I see some dangers to Minara in relying on this to too great an extent as a cause for delay, as it would seem to me that the more that the remoteness of an expert is emphasised the more it appears to call into question the capability of the expert concerned to provide evidence as to the common general knowledge in Australia.
25. Considering all of the above, in my view the competing considerations as to whether the present delay is justifiable seem to suggest the affirmative.
The public interest
26. Public interest considerations were addressed by Burchett J in Ferocem (supra). The Kaiser Aluminium decision which Burchett J cited in Ferocem states that one should deal with a serious opposition on its merits rather than shut it out because of a failure in procedure.
27. The actions by Minara so far suggest a serious opposition is on foot. Although I have a slight sense that Minara has been dilatory in this matter, they generally seem to have proceeded with reasonable haste given the prevailing circumstances. (Admittedly I have the benefit of being aware that they have now filed the statutory declaration of one of their experts, which BHP did not have when they initiated this proceeding.) Moreover I accept the reluctance of Minara’s experts to “out” themselves as being real, although that indulgence will probably not survive any further request for an extension of time, however well-founded the apprehensions felt by these experts might possibly be.
28. Overall I consider the public interest strongly favours providing Minara with a further opportunity to bring forward relevant evidence that would allow a more just determination of the opposition, despite the resultant delay in the opposition proceedings.
The interests of the parties
29. Minara’s interests would clearly be disadvantaged by it not being able to serve its evidence in support.
30. It is clearly in BHP’s interests to have the opposition determined as expeditiously as possible, given Minara’s commercial intentions. I accept that BHP could be disadvantaged by a protraction of proceedings if I grant the extension now sought. Nevertheless, there is nothing before me to suggest that such protraction would have the same undue effect on BHP as the effect on Minara if it was denied the opportunity to fully argue its case. I also believe that certain advantages accrue to BHP in having all the issues canvassed in opposition proceedings rather than have them flow over to another forum.
31. In my view the balance of the parties' interests at this stage of proceedings weighs in favour of allowing the extension.
CONCLUSION
32. I have found that the considerations behind whether Minara has justified its delay in providing evidence in the present circumstances and for the need for a further extension of time support the extension. Likewise, the private interests of Minara, together with the public interest, support the granting of an extension. The interests of BHP do not, although to a much lesser extent.
33. I am therefore satisfied that an extension of time is appropriate in all the circumstances. Therefore I grant Minara Resources Limited an extension until 30 January 2007 in which to serve its evidence in support.
COSTS
34. The power of the Commissioner to award costs is discretionary, so I must take into account all relevant considerations.
35. In matters before the Commissioner, costs usually follow the event. Although Minara Resources Limited served an important part of its evidence in support (the Elvish declaration) just a week before the hearing and expanded upon the reasons for the delay in written submissions made available before the hearing and in oral submissions made at the hearing, I do not perceive these as being factors which have altered the outcome of the hearing. In any case, at least so far as the Elvish declaration is concerned, it was always open to BHP to withdraw its objection prior to the hearing. I therefore award costs against BHP International, Inc.
Ed Knock
Delegate of the Commissioner of Patents
Patent attorneys for the patent applicant : Griffith Hack, Melbourne
Patent attorneys for the opponent : Wray & Associates, Perth
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