BOC Gases Australia Limited v WMC Resources Ltd

OFFICIAL NOTICE
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 726261 in the name of BOC GASES AUSTRALIA LIMITED

Title: A Process to Improve Mineral Flotation Separation by Deoxygenating Slurries and Mineral Surfaces

Action: Opposition under Section 59 by WMC RESOURCES LIMITED, and objection to an application under Regulation 5.10(2) for an extension of time in which to serve evidence in answer

Decision: Issued .
Abstract

The applicant cited the quantity of the evidence in support, the withdrawal of the originally nominated expert who had primary carriage in this matter, the need to locate and retain further declarants and a restructure of the applicant's corporate group leading to control of the technology and associated intellectual property being transferred overseas as the major reasons for needing the extension of time.
The extension of time to serve evidence in answer was granted. Although the applicant's contention that the quantity of evidence was a significant factor in the delay in filing the evidence in answer was found to be without foundation, the opponent had provided a satisfactory explanation of the need for the extension sought. The public interest in not denying the grant of a valid patent, together with the interests of the applicant, also favoured the granting of the extension of time.
Costs were awarded against the objector to the extension.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No. 726261 in the name of BOC Gases Australia Limited, opposition under section 59 by WMC Resources Limited, and objection to an application under regulation 5.10(2) for an extension of time in which to serve evidence in answer

BACKGROUND

Patent application 726261 was filed on 9 March 1998 by BOC Gases Australia Limited (BOC). It is associated with provisional application PO 5909 filed on 26 March 1997. The application was advertised accepted on 2 November 2000.
WMC Resources Limited (WMC) filed a notice of opposition to the grant of a patent on 2 February 2001. A further notice of opposition was filed on the same date by Air Liquide Australia limited, but this was subsequently withdrawn.
The following deals exclusively with the opposition by WMC.
On 2 May 2001 a statement of grounds and particulars (subsequently amended) was filed. After having served part evidence on 2 February 2002, serving of the evidence in support was completed on 31 July 2002 after having required 6 extensions of time totalling 12 months in all. BOC initially objected to the final extension of time, but on being assured that serving of the remainder of the evidence was imminent it withdrew that objection.
BOC was thus required to file its evidence in answer by 31 October 2002. It requested, and was granted, an extension to this time to 31 January 2003. On this date BOC sought another extension of time to 30 April 2003. WMC objected to the further extension and the matter came to hearing in Canberra on 4 March 2003. BOC was represented by Ms Linda King, patent attorney of Baldwin Shelston Waters, Sydney, and WMC was represented by Robert Wulff, assisted by Dr Malcolm Engel, patent attorney and technical assistant, respectively, of Griffith Hack, Sydney. Both parties appeared by telephone.
REASONS FOR EXTENSIONS OF TIME
The reasons given by BOC in their first application for an extension of time from 31 October 2002 to 31 January 2003 are as follows:
"The evidence filed by the opponent is extensive and has been forwarded to the Applicant for their consideration.
In addition, investigations have been undertaken to locate a suitable independent expert to consider this evidence and the amended Statement of Grounds and Particulars.
Further time is required for the Applicant to complete their review of the Evidence-in-Support and provide their comments, locate an independent expert and have them review the Evidence-in Support and have them provide their comments, draft the comments from the local experts into declaratory form and serve on the Opponent."
The reasons for the present extension application are stated as being:
"Preparation of the Applicant's Evidence-in-Answer is still proceeding. However, due to the quantity of the Evidence-in-Support filed and difficulties obtaining an independent expert, completion of this Evidence-in-Answer has been delayed.
The Opponent has filed several hundred pages of evidence including an extensive number of citations. It is obviously necessary for the Applicant and its nominated experts to review each of these documents carefully. Review of these documents has taken longer than expected and further time is required for this review.
In addition, global responsibility for this technology and its associated intellectual property in BOC has now been transferred from Australia to an overseas subsidiary. This, of course, has increased the time necessary to conduct a complete review of the Evidence-in-Support, determine an appropriate strategy and prepare Evidence-in-Answer.
Still further, the originally nominated expert in Australia who had primary carriage of this case has now left the employ of the Applicant. This was unexpected and, unfortunately, this expert is no longer available to assist the Applicant in the preparation of their Evidence-in-Answer. Steps have been undertaken to locate another expert, however, this has proved difficult, particularly in view of the Christmas/New Year holiday period in which industries involved in this technology usually close down.
The Applicant is confident that this will be the final extension for service of Evidence-in-Answer. If granted, this extension only brings the period for filing Evidence-in-Answer to a total of nine months. We do not believe that this extension in any way, unnecessarily protracts these proceedings."
These reasons were elaborated on a little in the BOC's written submissions provided for the hearing, which state, in part:
"David Clark unexpectedly left the employ of Applicant about November 2002 and is no longer available to assist the applicant in preparation of Evidence-in-Answer. Mr Clark was the originally nominated expert in Australia and had primary carriage of this matter. It was also expected that, in addition to providing expert evidence, Mr Clark would assist in identifying suitable independent expert/s.
Efforts have been made to locate another expert. This has proved difficult, particularly given that:
1.part of the period included the summer holiday period during which experts (particularly academic experts) are difficult to contact.
2.the technology is very specialised and consequently the pool of suitable experts is small.
The technology that is the subject of the patent claims is in the mining and mineral processing field. This was accepted by the delegate in Dominion Mining Limited v MIM Holdings Limited and Highlands Gold Properties Pty Ltd [1997] APO 27 (11 June 1997), where Dominion Mining Limited sought an extension of time under reg 5.10(2) to file evidence-in-answer.
The delegate stated:
'The mining and mineral processing field is a competitive and technically complex one. In such a field it is difficult to find any one person who has complete expertise across the field.'
The difficulties that the Applicant has encountered in obtaining another expert could not have been anticipated."
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.'"
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.
I will take these principles into account when deciding whether the presently sought extension of time is appropriate in all the circumstances.
DECISION
The explanation of the delay
The present application for extension is the second filed by BOC and represents a total extension sought of six months. In considering the explanation for the delay, it is legitimate to have regard to the reasons given to justify the total extension (Goninan at page 223):
"Nor do I think that there is any substance in the contention that the finding that the first application was not properly based was "wholly irrelevant" to the determination of the second application. One of the factors to be taken into account in determining whether a further extension should be granted was the extent of any delay in filing evidence and whether Goninan had offered a satisfactory explanation for the delay, or any part of it. As Ferocem shows, this consideration cannot be regarded as paramount in the sense that it forecloses proper consideration of other relevant factors. But it was clearly a relevant factor in the delegate's deliberations and he was entitled to take into account that at no stage had a satisfactory explanation for the delay been forthcoming."
Essentially BOC cites three factors to justify the delay that has occurred in the filing of its evidence in answer:

1.   The quantity of the evidence in support needed to be considered;
2.   The difficulties they have encountered in locating and retaining suitably qualified experts in Australia to provide expert evidence, including one such person to have primary carriage of the case. As noted earlier, the loss of the services of Mr Clark and the intervention of the Christmas/New Year period has proved an impediment in this, as has the specialised nature of the technology.
3.   An internal restructure of the applicant's corporate group that has led to control of the technology and associated intellectual property that is the subject of the patent application being transferred to an overseas subsidiary (revealed at the hearing to be in South Africa).
At the hearing Mr Wulff challenged the relevancy of each of these reasons in turn. In relation to the quantity of the evidence, he firstly drew attention to the fact that the bulk of the evidence had been available to the applicant since 2 February 2002, as the evidence filed subsequently had not substantially incremented the evidence in its final form. The question of whether it is reasonable to expect a party to commence work on part-evidence before the totality of the evidence is at hand is a vexed one. In the present matter there appears to have been nothing to alert the applicant that the evidence filed on 2 February 2002 effectively comprised the evidence in support. I can conceive of practical considerations concerned with the efficient running of the opposition, such as allowing for the possibility of withdrawing or amending the application, or simply the inefficiencies involved in possibly needing, once all the evidence was in, to revisit work that had already been done, that might justifiably disincline an applicant to commence work on its evidence in answer on the basis of part evidence in support. In regard to this Ms King cited ExxonMobil Chemical Patents Inc v Associated Octel Company Ltd 55 IPR 664. In that decision the delegate of the Commissioner stated the following:
In my view, while the applicant would have an idea of the nature of the case to be answered from the statement of grounds and particulars, they would not know the details of the argument and may also not necessarily understand the emphasis the opponent was intending to place on the expert evidence or how it was being relied on by the opponent. Such information may be important in deciding which expert to select. For example, if the opponent's expert provided evidence of the common general knowledge in Australia, the applicant would require an expert who was equally qualified to provide such evidence. Similarly, if the opponent's evidence focused on a particular aspect of the technology then this too may influence the expert witness chosen.
I fully accord with these views.
Mr Wulff also pointed to the actual quantity of the evidence, and here I believe he is on firmer ground. There are basically only two, modestly-sized declarations in the evidence in support. The prior art documents annexed to the declarations are also reasonably small in number, but in any case the construction to be placed upon those documents is really up to the tribunal to determine, so any evidence need only deal with technical aspects of the disclosures, such as the explanation of technical terms. There is, however, evidence in the declarations which goes to the common general knowledge in the art, and it is in relation to this that one would expect the applicant will very much need to have recourse to evidence from experts in the field.
It is here that the second reason put forward by the applicant to justify the delay comes into play. The applicant has put forward a fairly credible explanation as to why it has been unable to come up with an expert or two in the field to provide evidence. Nonetheless, I agree with Mr Wulff that a disquieting aspect of this evidence is that none of the details relied on by the explanation are provided in declaratory form. Also of concern is that there is a gap in time from 31 July 2002 (when the evidence in support was filed) to November 2002 (when Mr Clark departed) in which gathering of evidence in answer appears to have stood still.
Notwithstanding these reservations, I am prepared to accept the version of events given by the applicant. Now in Dominion Mining Limited v M.I.M. Holdings Limited and Highlands Gold Properties Pty Ltd [supra], the delegate of the Commissioner in like circumstances concluded that difficulties arising from the inaccessibility of declarants was a relevant factor which favoured the grant of an extension of time. As stated at page 3:
"I accept the withdrawal of declarants … would cause significant disruption to the applicant's preparation of evidence-in-answer. This factor could entitle the applicant to an extension of time."
In relation to the third reason justifying the delay, that of the restructure and the transfer of responsibility overseas, Mr Wulff submitted that this reason no longer held water with the advent of modern communications. In support of this he cited the decisions in Coflexip v Stolt Comex Seaway A/S [1995] APO 58 and Galagen Inc v Northfield Laboratories Pty Ltd [2001] APO 30. However, in neither of those cases do we have the situation which exists here, namely the interaction of overseas control with a restructure in the relevant period of the delay, and I am prepared to accept this situation as providing a plausible justification for the delay.
While there is no material before me positively establishing that BOC has endeavoured to move expeditiously to compile its evidence in answer, it has established to my satisfaction that significant impediments existed which militated against them doing so. On balance I believe BOC have shown that they have experienced difficulties of a kind which justify the need for the extension of time presently sought.
The public interest
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. While that decision discusses the risk of shutting out the opponent, the same principles apply in respect to the risk of shutting out the applicant by denying a proper defence of the opposition. This approach is also supported by S.D.S. Digger Tools Pty Ltd v Pasdonnay Pty Ltd [1995] APO 57. That decision states that it is in the public interest for the applicant to be able to defend its case for what might be a worthwhile invention rather than have the defence shut out because of a failure in procedure.
It is also against the public interest to grant an invalid patent and to unnecessarily delay opposition proceedings. Opponents, and particularly their statements of grounds and particulars and evidence-in-support, are an important source for reducing the risk of granting invalid patents. In this light one could suggest that the applicant's evidence-in-answer has little effect on this public interest consideration. On the other hand it is equally against the public interest to deny the grant of a valid patent . This position means the applicant's evidence-in-answer is as important to the public interest as the opponents' evidence-in-support. I think this point carries more weight, at this stage of proceedings in the present case, than the prospect of delay of those proceedings.
Overall I consider the public interest in providing BOC with an opportunity to obtain relevant evidence that would allow a more just determination of the opposition outweighs any delay in the opposition proceedings.
The interests of the parties
Ms King submitted that the applicant's interests would be disadvantaged by not being able to serve its evidence in answer. This is clearly the case, and on the face of it I think the applicant should be allowed further opportunity to present its case at this stage. The applicant's need for the extension has largely arisen from circumstances beyond its control. A refusal of the extension would cause the applicant further detriment above that already suffered through the withdrawal of its primary expert, Mr Clark. Mr Wulff submitted that the situation was of the applicant's own making, given the 22 months it has had since serving of the statement of grounds and particulars and 13 months since the evidence in support was effectively served to prepare its evidence. However, as will be clear from my earlier comments on this point, I reject this method of calculating the time the applicant has had available to it to obtain its evidence.

As Mr Wulff stated, it is clearly in the opponent's interests to have the opposition determined as expeditiously as possible. Clearly BOC's interests would be best served by granting an extension of time to allow their case to be presented in full. On the other hand, I accept that WMC could be disadvantaged by a further 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 WMC as the effect on BOC if they were denied the opportunity to fully state their case.
In my view the balance of the parties' interests at this stage of proceedings weighs in favour of allowing the extension.
CONCLUSION
I have found that on balance BOC have provided a satisfactory explanation of the need for a further extension of time. The private interests of BOC, together with the public interest, also support the granting of an extension. I am therefore satisfied that an extension of time is appropriate in all the circumstances. Moreover, I am of the view that the circumstances are such as to warrant the full extension of time sought by the applicant and not, as Mr Wulff submitted should be the case if I was of a mind to grant an extension, a brief extension of time to allow service of any evidence in answer which the applicant had at hand. Therefore I grant BOC an extension until 30 April 2003 in which to serve evidence in answer.
In her submissions Ms King indicated the applicant "genuinely believed" it can finalise its evidence within this time but this obviously falls short of being an undertaking to that effect. However, while I have accepted that BOC are acting in good faith, I would view with concern any additional extension of time sought by BOC for any of the reasons which led to the need for this extension.
COSTS
The power of the Commissioner to award costs is discretionary, so I must take into account all relevant considerations.
In matters before the Commissioner, costs usually follow the event. In the present case, I consider I would have made the same finding I have done regardless of the smattering of extra background information the applicant has provided in its submissions. I see no other basis here on which to vary the usual award of costs. I therefore award costs against WMC Resources Limited.
Ed Knock
Delegate of the Commissioner of Patents
Patent attorneys for the applicant : Baldwin Shelston Waters, Sydney
Patent attorneys for the opponent : Griffith Hack, Sydney

[2003] APO 11

21 March 2003