BP International Limited v Neste Oil Oyj - [2012] APO 20

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
BP International Limited v Neste Oil Oyj [2012] APO 20

Patent Application: 2003258753

Title:Diesel fuel composition, comprising components based on biological raw material, obtained by hydrogenating and decomposition fatty acids

Patent Applicant:  Neste Oil Oyj
Opponent:  BP International Limited
Delegate:  Dr S.D.Barker
Decision Date:  1 February 2012
Hearing Date:  Written submissions completed on 16 December 2012
Catchwords:  PATENTS – application to serve further evidence – nature and significance of the evidence considered – document D1A is highly relevant art – application allowed

Representation: Patent applicant: Callinans
Opponent:Griffith Hack

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2003258753

Title:Diesel fuel composition, comprising components based on biological raw material, obtained by hydrogenating and decomposition fatty acids

Patent Applicant: Neste Oil Oyj
Date of Decision: 1 February 2012
DECISION
I grant the application to serve further evidence filed on 3 November 2011.
I award costs against the applicant, Neste Oil Oyj.
REASONS FOR DECISION

Patent application 2003258753 in the name of Neste Oil Oyj (the applicant) was advertised accepted on 4 December 2008. An opposition to the grant of a patent was filed by BP International Limited (the opponent) on 4 March 2009. The opponent completed their evidence in support of the opposition on 10 September 2010. On 12 September 2011 the applicant requested leave to amend the specification. That matter is still pending.
On 3 November 2011 the opponent sought leave to serve further evidence, and the patent applicant objected. The Commissioner set a time frame for the parties to file written submissions on whether the further evidence should be allowed. Submissions have been provided by both parties. The submissions include declarations by Andrew Davey and William Roy Jackson, both dated 9 December 2011.
A further request to serve further evidence was made on 21 December 2011. That request is still being processed, and is not the subject of this decision.
The relevant law
Further evidence is governed by regulation 5.10. The relevant subregulations state:
(4) The Commissioner may:
(a) on the application of a party; and
(b) on such reasonable terms (if any) as the Commissioner specifies;
permit the party to serve further evidence on the other party.
(5) 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.
It is clear that the applicant has been notified, and the parties have had an opportunity to make representations. The question that must be considered is whether I am satisfied that it is appropriate to allow the service of the further evidence. In exercising this discretion I am guided by the decisions of Burchett J in Ferocem Pty Ltd v Commissioner of Patents (1994) AIPC 91-057; 28 IPR 243, Sackville J in A Goninan & Co Ltd v Commissioner of Patents (1997) AIPC 91-330; 38 IPR 213 and Goldberg J in National Starch & Chemical Co v Commissioner of Patents [2001] FCA 33 on the operation of regulation 5.10(5) in relation to extensions of time. The general principles that flow from these decisions are as follows.
a)The power is discretionary, and cannot be reduced to imperative compliance with any particular requirement
b)The reasons why the evidence was not served earlier are a relevant consideration, but a satisfactory explanation is not a mandatory requirement
c)The public interest in determining a serious opposition on its merits requires the Commissioner to form a view as to the nature of the evidence that it is sought to be adduced, and the significance of that evidence for the opposition proceedings.
d)The interests of the party seeking the exercise of discretion, and the party opposing the extension, are relevant considerations.
These considerations are equally relevant to the determination of the present request for further evidence. The parties referred to the Office decisions in Sandoz Ltd v Fujisawa Pharmaceutical Co Ltd (No 2) (1993) AIPC 91-013, Simac SpA Macchine Altimentari v Semak Electrics Pty Ltd (1985) 5 IPR 281 and Imperial Chemical Industries PLC v Mitsubishi Gas Chemical Co Inc (1994) 29 IPR 285. These (and other decisions of the Commissioner) do not represent binding rules. For the reasons given in the Manual at 3.6.1.4, these decisions should not be seen as laying down prescriptive requirements:
“A number of Patent Office decisions have previously adopted certain ‘criteria’ in determining whether the serving of further evidence is appropriate in all the circumstances, as set out for example in Sandoz Ltd v Fujisawa Pharmaceutical Co. Ltd 27 IPR 421 and Imperial Chemical Industries PLC v Mitsubishi Gas Chemical Co 29 IPR 285. However, the reasoning in Goninan suggests that the requirements outlined in Sandoz and ICI are not prescriptive. Instead, the questions asked in those cases are only a guide to help identify the relevant aspects of a case so that ‘proper, genuine and realistic consideration’ can be given to them as required by Goninan.”
The applicant has referred to part 3.24.5.2.6 of the Manual to argue that the opponent needs to make a full and frank disclosure of the relevant facts. This requirement, which the Manual discusses in relation to section 223, is not appropriate when considering regulation 5.10. Burchett J explicitly rejected this requirement at [6] of Ferocem:
“It is quite clear that Jenkinson J was here construing section 160, as a special provision, and was not laying down rules for the exercise of general discretions to grant extensions of time.”
It is not a requirement that the opponent must provide a full and frank disclosure, although it would clearly aid their case to do so.
The evidence
The Statement of Grounds and Particulars alleges lack of novelty in the light of document D1 and its English language translation D1A, and lack of inventive step in the light of documents D1, D1A, D2 – D16, and D18 – D25. The evidence in support of the opposition is a declaration by William Roy Jackson, together with exhibits WRJ-1 to WRJ-3. The exhibits do not include copies of any of the documents identified as D1 – D16 and D18 – D25. The further evidence is a declaration by Andrew Davey, together with exhibits AD-1 to AD-11. The exhibits to the Davey declaration are copies of D1 (including D1A), D2, D3, D7, D8, D10, D11, D12, D16, D21, D25.
It is clear that the Davey declaration serves as a vehicle to introduce the documents that are relied upon for the purposes of novelty and inventive step. These documents were not previously part of the evidence.
Application of the facts to the law
The applicant has made a submission that further evidence must be evidence that was not available during the normal evidence in support stage. The support for this proposition is given as Sandoz, where the hearing officer agreed that “where an application for extension of time to serve evidence has been refused, it is not appropriate to admit that evidence as further evidence”. As stated above, in the light of the Federal Court decisions in Ferocem and Goninan the principles in Sandoz are not automatically applicable. Further evidence is evidence that is additional to the evidence already served by the party. Thus further evidence can only be served after there has been initial evidence by that party. However, it does not follow that evidence that could have been served as evidence at an earlier stage cannot be further evidence. The fact that there was delay in serving the evidence is a relevant consideration when deciding whether to allow the further evidence to be served, but it is not determinative of the matter. The matter must be decided according to the criteria in Ferocem and Goninan.
Explanation of delay
The Jackson declaration is dated 26 August 2010, and was served on 10 September 2010. The opponent has stated that they became aware of the omission of the documents on receipt of a letter from the Commissioner dated 31 October 2011. The relevant parts of that letter state
“I refer to the applicant’s letter of 21 October 2011, requesting a direction for further and better particulars … The applicant is concerned that the opponent has particularised 24 prior art documents (D1 – D16 and D18 – D25), but has not served these in its evidence in support. It appears that the applicant is seeking certainty that these documents will not be relied on at the hearing … as noted by the applicant, if the documents were not served in evidence, they cannot be relied on at the hearing”
The view expressed in that letter is clearly correct - documents that are not included in the evidence do not form part of the case of the opponent. It is not apparent why the opponent did not include copies of the documents in the evidence in support. In my experience it is normal for declarants to exhibit a copy of the documents that they refer to. There is no explanation of why this practice was not followed, or why it was not noticed during routine checking of the declaration. In the absence of an explanation of why the documents were not included in the evidence in support, I do not have a satisfactory explanation of the delay.
The public interest
It is necessary to form a view of the nature and significance of the evidence that will be served (Goninan at AIPC 39,438, IPR 225-6). In the present case the evidence is available for inspection. The evidence that is introduced by Mr Davey is copies of documents that are relied upon for the grounds of novelty and inventive step. In the absence of these documents, these grounds will be unsustainable. Clearly this evidence is important to the opponent.
As the matter is finely balanced (see my later discussion) I have looked closely at D1A, which is stated to be novelty destroying. I am not looking at the document to decide whether claim 1 is novel, but rather to decide how significant the document is. The document says that it relates to “hydrogenating the fatty acids or triglycerides of the vegetable oil first into n-paraffins, after which the n-paraffins are then converted into branched-chain paraffins”. The product “is suitable as a component of diesel fuel”. Claim 1 of the opposed application (as proposed to be amended) is directed to a biodiesel fuel consisting of a) 0.1 – 99% of a component produced by hydrogenating and isomerising a biological raw material, and b) 0 – 20% of a component containing oxygen, the components being dissolved or emulsified in diesel components. It is clear that D1A is highly relevant art.
I am satisfied that the public interest favours allowing the further evidence.
The interests of the parties
It is readily apparent that the parties have legitimate interests that lie in opposing directions. As already noted, the opponent could not argue its case without copies of the citations being in evidence. The applicant has said that it has been preparing evidence in answer on the basis of the evidence that has been properly served, and “should not be penalised for the mistakes of the Opponent’s representatives”.
The applicant has also stated that
“A number of the documents filed as further evidence are not in English and have no certified translations. Regulation 22.15 applies and as such Exhibits AD-1, AD-8, AD-9, AD-6 and AD-10 have no evidential value and are not relevant evidence.”
I have examined the specified exhibits, and they each contain two documents - one in English and one that is not in English. The English language documents do have any certification of the translation. Without a certification the evidentiary value of the translations is reduced, but it does not automatically follow that they will be given no weight.
The opponent has indicated that the applicant is amending the specification, which is presently delaying the time for evidence in answer. Additionally, the applicant’s declarant, Mr Alto, is said to be already familiar with the documents, at least because the documents were also raised in a corresponding action in Europe.
I consider that both parties have legitimate interests that lie in opposing directions. The interests of the parties are offsetting.
The balance of considerations
The applicant made reference to the decision in Sandoz Ltd v Fujisawa Pharmaceutical Co Ltd (No 2) (1993) AIPC 91-013. The hearing officer in that case found that it had not been shown that the evidence could not have been obtained earlier with reasonable diligence. The applicant argued that the decision also shows that an opponent who has not timely completed their evidence in support cannot use further evidence to circumvent the deadline for evidence in support. I note that the Sandoz decision pre-dates the Federal Court decision in Ferocem. In the light of the Ferocem decision it is clear that regulation 5.10(5) involves a balancing of considerations, and it is not correct to insist on compliance with any single consideration. I will proceed to give proper consideration all relevant matters.
I have not been provided with a proper explanation of the delay, in so far as it is unknown why copies of the documents were not served as evidence in support, even though the documents were clearly in the possession of the opponent. This factor lies against allowing the further evidence. On the other hand, the nature and significance of the evidence support allowing the further evidence. The interests of the parties are largely offsetting. It is apparent that the considerations in this case are very finely balanced. As a result of my consideration of D1A, I am satisfied that it is highly relevant art, and should be available to be given full consideration by the Commissioner. This persuades me that it is appropriate in all the circumstances to grant the application.
Other matters
Where further evidence is granted, the Commissioner may impose reasonable terms (under regulation 5.10(4)(b)). Normally, the terms are to permit the other party to serve responding evidence. In the present case, the applicant is still in the process of preparing evidence in answer, so responding evidence can be included in the evidence in answer.
The time for serving evidence in answer is presently governed by the following direction:
The time limit for serving evidence in answer in the opposition under section 59 expires one (1) month after the date the Commissioner notifies the parties of the allowance, refusal or withdrawal of the request for leave to serve further evidence filed on 3 November 2011.
I consider that this direction adequately addresses the issue of responding evidence, and no further terms are necessary.
Despite the fact that I have granted the application to serve further evidence, I am extremely concerned by the way that the evidence of the opponent has been prepared. The evidence as originally served was grossly incomplete, for reasons that have not been explained. I encourage the opponent to take greater care in the preparation of any remaining evidence.
The applicant has been unsuccessful in their objection to the further evidence. I see no reason to depart from the normal approach that costs should follow the event. I will award costs against the applicant, Neste Oil Oyj.
Dr S.D.Barker
Delegate of the Commissioner of Patents