British American Tobacco (Germany) GmbH v Philip Morris Products S.A
[2014] APO 87
•18 December 2014
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
British American Tobacco (Germany) GmbH v Philip Morris Products S.A. [2014] APO 87
Patent Application: 2007232212
Title:Slit banded paper
Patent Applicant: Philip Morris Products S.A.
Opponent: British American Tobacco (Germany) GmbH
Delegate: Keith Wagg
Decision Date: 18 December 2014
Hearing Date: Written Submissions
Catchwords: PATENTS – Extension of time to file evidence in answer – Reg. 5.9 – prompt and diligent action not established – opposition is stayed pending the outcome of s 104 amendments – exceptional circumstances established – extension of time granted – costs awarded against applicant.
Representation: Patent applicant: Callinans
Opponent:Shelston IP
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2007232212
Title:Slit banded paper
Patent Applicant: Philip Morris Products S.A.
Date of Decision: 18 December 2014
DECISION
I direct the opposition be stayed pending the outcome of the s 104 amendments. The stay is backdated to when the amendments were filed.
The stay is considered exceptional circumstances and, as a result, an extension of time is granted for filing evidence in answer to one month after the Commissioner informs the parties that the s 104 amendments have been allowed, withdrawn or refused, or one month after the date of this decision, whichever is later.
Costs awarded against applicant.
REASONS FOR DECISION
Background
Patent application number 2007232212 (the patent), in the name of Philip Morris Products S.A. (the applicant) was advertised as accepted on 15 August 2013. A notice of opposition to the grant of the patent was filed by British American Tobacco (Germany) GmbH (the opponent). Filing of the statement of grounds and particulars followed on 17 February 2014. Evidence in support was completed on 19 May 2014 and this set evidence in answer to be due by 20 August 2014.
On 19 August 2014 the applicant filed s 104 amendments to the patent. An application for an extension of time to file evidence in answer (the application) followed on 20 August 2014. The application requested an extension of 3 months to 20 November 2014. A delegate of the Commissioner of Patents (the delegate) requested further information in support of the application on 22 August 2014. The applicant responded to the delegate’s request on 29 August 2014 (the response). On 2 September 2014 the delegate informed the parties that he intended to refuse the application unless a hearing was requested. On 9 September 2014 the applicant requested to be heard.
The s 104 amendments were advertised on 2 October 2014. This set the period for opposition to the amendments to expire on 2 December 2014. The opponent filed a notice of opposition to the s 104 amendments on 2 December 2014. The applicant requested a stay on the substantive opposition on 24 September 2014 pending the outcome of the amendments. The delegate informed the applicant that because there was already a hearing being set to decide the extension of time the stay should be decided along with the extension of time. Thus, this decision is in relation to both the request for the extension of time and the request for a stay.
Both parties filed their submissions on both issues 10 October 2014 and 17 October 2014.
The Law
On 15 April 2013, the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No 1) (the Amendment Regulation) commenced. The Amendment Regulation significantly amended the Patents Regulations (the Regulations) as they apply to patent oppositions. The law governing extensions of time to file evidence in a patent opposition depends upon the date on which the opposition commenced. Where the opposition commenced on or after 15 April 2013 (as in the present case), the extension is governed by regulation 5.9 of the Regulations as in force on 15 April 2013.
Subregulation 5.9(2) states:
The Commissioner may extend the period only if the Commissioner is satisfied that:
1. the party who intended to file evidence in the period:
(i)has made all reasonable efforts to comply with all relevant filing requirements under this Chapter; and
(ii)despite acting promptly and diligently at all times to ensure the appropriate evidence is filed within the period, is unable to do so, or
2. there are exceptional circumstances that warrant the extension.
Exceptional circumstances are defined in subregulation (5):
In this regulation:
exceptional circumstances includes the following:
(a) a circumstance beyond the control of a party that prevents the party from complying with a filing requirement under this Chapter;
(b) an error or omission by the Commissioner that prevents a party from complying with a filing requirement under this Chapter;
3. an order of a court, or a direction by the Commissioner, that the opposition be stayed pending the completion of a related proceeding or action under the Act.
As noted in the Explanatory Statement accompanying the Amendment Regulation:
"The Commissioner will not be able to extend time periods unless one of these conditions was made out. The party seeking the extension will bear the onus of convincing the Commissioner of this. Once the conditions in subregulation 5.9(2) are met, the Commissioner still has the discretion to consider whether or not it is appropriate that an extension of time be granted. In applying the test, the Commissioner will not be required to give a direction to extend a period solely because of delays caused by a legal representative failing to act promptly or diligently, by difficulties in obtaining expert evidence that could have been anticipated and acted on or by attempts to settle the proceedings.
Where a party cannot satisfy the Commissioner that an extension is justified under the test, the Commissioner will not have the power to give a short extension to allow the filing of evidence immediately available or to validate evidence filed out of time."
These provisions have been considered by the Commissioner in TRED Design Pty Ltd v Julie-Anne McCarthy and Bradley McCarthy [2013] APO 57 (the TRED decision) and Merial Limited v Novartis AG [2013] APO 65 (the Merial decision). The principles applied in those decisions, which I accept as correct, are that I must ask myself the following questions:
- Has the party (and their attorney or agent) made all reasonable efforts to comply with all relevant filing requirements?
- Was the failure to file the evidence in time despite the party (and their attorney or agent) acting promptly and diligently at all times to ensure the evidence is filed in time?
- Were there exceptional circumstances that warrant the extension?
I can extend the time for filing evidence only if I am satisfied that the answer to questions 1 and 2 is YES, or if I am satisfied that the answer to question 3 is YES. If I am so satisfied, then I must consider whether there are any discretionary reasons why the extension should not be granted.”
If the Commissioner is satisfied that an extension is appropriate, the Commissioner must then determine the length of the extension (subregulation (3)).
The Commissioner must determine the length of the extended period having regard to what is reasonable in the circumstances.
The demonstration of prompt and diligent action was noted in TRED at [76]:
“An attorney does not need to account for every minute of their day, but they must provide enough information to enable a delegate of the Commissioner to form their own opinion on whether the party has acted reasonably, promptly and diligently. The kind of information that could be provided is a brief account of actions taken (for instance, an outline of what was done, when it was done, how it was done, by whom it was done, as appropriate to the case) covering the period in question.”
It was stated by the delegate in Fugro Airborne Surveys Corp v Geotech Airborne [2014] APO 23 (Fugro) at [20] that a chronology of the steps taken is usually a good starting point to assess whether a person has acted promptly and diligently:
“A party seeking an extension of time will assist the Commissioner (and advance their own cause) if they provide information about what they did, when they did it, and how long those actions took. When considering such information, it is relevant to consider whether there have been any significant unexplained delays. The presence of significant delays without a reasonable explanation is the antithesis of acting promptly and diligently.”
In Osmose New Zealand v Zelam Limited [2014] APO 49 (Osmose) the delegate noted at [18] and [22] that:
“The fact that some activities took place over several months does not automatically mean that Zelam have not been prompt and diligent.” … “While it might have been possible to carry out some activities faster, the time taken is not outside the range of prompt and diligent given the work that was involved.”
Has the applicant made all reasonable efforts to comply with all relevant filing requirements? Was the failure to file the evidence despite prompt and diligent action at all times?
It is useful to look at the chronology of events provided in the applicant’s submissions bridging pages 2-3.
Date Action 20 May – 30 May Evidence-In-Support received and forwarded to Patent Applicant’s UK Attorneys and by them to Patent Applicant 30 May – 18 June Initial Review of Evidence-in-Support by Patent Applicant’s UK Attorney and by Patent Applicant’s in-house Attorney 12 June – 13 June Meeting of Patent Applicant’s AU and UK Attorneys in London requested and arranged 18 June Meeting of Patent Applicant’s AU and UK Attorneys held 18 June – Present Further consideration of Evidence-in-Support by Patent Applicant’s UK Attorneys and Patent Applicants and Patent Applicant Attempts to contact inventor deemed to be most able to comment and respond to the Evidence-in-Support.
Discussions with alternative possible witnesses, in the light of difficulties in locating inventor18 June – 19 August Amendments considered and proposed in the light of Evidence-in-Support 2 October Request for Leave to Amend advertised for opposition purposes
In the response, the applicant filed some information explaining the events which was repeated in the applicant’s submissions dated 10 November 2014. The information was:
“Evidence-in-Support was made available via the Objective Connect platform on 20 May 2014. The Patent Applicant's Australian Patent Attorneys ("Australian Attorneys") downloaded a copy of the Evidence-in-Support from Objective Connect on 20 May 2014. The Australian Attorneys forwarded a copy of the Evidence-in-Support to the Patent Applicant's United Kingdom Attorneys ("UK Attorneys") via e-mail on 30 May 2014. On 12 June 2014 the Australian Attorneys sent an e-mail to the UK Attorneys to arrange a meeting to explain the opposition procedure and evidence required. On 13 June 2014 a meeting between a representative of the Australian Attorneys and representatives of the UK Attorneys was scheduled to occur in London on 18 June 2014. That meeting went ahead as planned, in London, on 18 June 2014.
Following the meeting that occurred in London on 18 June 2014, and having received and considered the Evidence-in-Support, the Patent Applicant and the UK Attorneys have made repeatedly attempted to contact Mr Rajesh Garg. Mr Garg has been identified as a preferred expect as he is named as an inventor for the present Application and also for two of the citations raised in the Evidence-in-Support. All attempts to contact Mr Garg to date have been unsuccessful. Attempts to locate Mr Garg are on-going. Mr Garg was employed by the United States arm of Philip Morris at the time of the filing of the priority application and was based in the United States. He later moved to Switzerland to join the Patent Applicant, but left in 2010. While an online search indicated that he then went to one of the major soft drink corporations in the United States, he apparently retired in 2011. One of the difficulties in tracing him arises from the fact that his name is not uncommon. In parallel to attempting to contact Mr Garg, the Patent Applicant has also considered two potential alternative experts, both of whom are current employees of the Patent Applicant, namely, Dr Ping Li, who is a manager of the Patent Applicant's Product Development department located in Switzerland and is responsible for filter technology, and was also named as an inventor on one of the citations raised in the Evidence-in-Support, and, Mr Georges Fleurdelys, who is a Senior Engineer in PMI's Materials Quality and Assurance Department also located in Switzerland. In-house Patent Attorneys of the Patent Applicant have discussed matters relating to the Opposition with both Dr Li and Mr Fleurdelys. Dr Li and Mr Fleurdelys have also been made aware of the recently filed claim amendments. The Patent Applicant is seeking more time to have an opportunity to track down Mr Garg, as he was directly involved in the development of the technical solutions at issue and would be the most appropriate person to give a declaration on these matters. The Patent Applicant would also like more time to enable their appointed expert, which they hope will be Mr Garg, to consider the recently filed claim amendments and the resulting, limited scope of protection in light of these amendments.”
Notwithstanding gaps in the chronology (e.g. the 10 day period from 20-30 May and the 5 day period between 13 June and 18 June), it is clear from the above the primary reason for the failure to meet the filing requirement was a result of the ongoing pursuance of Mr Rajesh Garg. He was identified as the preferred expert because he is named as an inventor on the current application and also on two of the citations in the evidence in support. However, apart from finding out that he moved to Switzerland and left in 2010 and that he moved back to the US before retiring in 2011, little seems to be known of his current whereabouts. Furthermore, only online searching appears to have been conducted. There is no further detail of other attempts to locate him.
The applicant has also indicated that they desire to conduct experiments. However, no experiments have occurred to date and no detail of the specific experiments they wish to carry out has been provided, obviously this is because no one has been appointed as the expert.
Attempting to locate Mr Garg, even in retirement, is understandable since there are clear reasons why he is preferred. However, there must be a time when it is necessary to move on and pursue another expert in order to progress the proceedings. It is not in the public interest or the interest of either party to spend an indefinite period searching the world for a man who retired 3 years ago and could be anywhere and who may not even wish to participate in these proceedings anyway.
The applicant realised at some point that they could not pursue Mr Garg indefinitely and started work with two alternative experts, Dr Ping Li and Mr Georges Fleurdelys. However, there is no detail as to when they were contacted and whether or not they are going to provide evidence anyway.
Therefore on the detail provided it is impossible for the Commissioner to be satisfied that the applicant has acted promptly and diligently and as a result I find that the request for an extension of time fails under reg 5.9(2)(a).
The next question is whether or not there are exceptional circumstances under reg 5.9(2)(b).
Are there exceptional circumstances?
Request for a Stay
Regulation 5.9(2) makes it clear that a direction by the Commissioner to stay proceedings in opposition pending the completion of a related proceeding is an exceptional circumstance which can ground an extension of time.
The Commissioner has power to stay proceedings by direction through the operation of regulation 5.22 which states:
1) The Commissioner may give a direction in relation to an opposition to which the Chapter applies:
a)if requested by a party in writing; or
b)on the Commissioner’s own initiative.
2) If the Commissioner proposes to give a direction, the Commissioner must give the parties an opportunity to make representations about the direction.
3) A direction must not be inconsistent with the Act or these Regulations.
4) The Commissioner must notify the parties of the direction as soon as practicable.
In this case I am satisfied the Commissioner has the power to direct a stay on the substantive opposition until the fate of the s 104 amendments is ultimately known. The s 104 amendments are clearly a “related proceeding”. Such a direction is discretionary and its issuance will depend on whether the proposed amendments will result in substantial or significant changes to the scope of the opposition. For example, the amendments may significantly alter the claims such that evidence will need to be reconsidered.
The current amendments delete claims 6 and 7 and add two features to the independent claims 1 and 15. These two added features are that the add-on material be a single layer in the first and third zones; and that the second zone comprises no add-on material. A marked up version of claim 1 is given below with the added features underlined:
“A wrapper of a smoking article, comprising:
a base web; and
at least one transverse banded region comprising first, second and third zones,
said first and third zones comprising a single layer of add on material, which reduces permeability of said wrapper, said first and third zones being separated by said second zone, wherein the second zone comprises no add-on material;
said wrapper having greater permeability along said second zone than along said first and third zones, said second zone having a width less than the width of either of the said first and third zones, in which
the add-on material is substantially uniform with respect to parameters of thickness, density or composition, across each of the first and third zones;
said first and third zones each have a width of 2 mm to 5 mm such that if either of said first or third zones were applied separately to wrappers of smoking articles the smoking articles would exhibit total burn through and substantially no occurrences of self-extinguishment under free burn conditions;
the sum of said widths of said first and third zones is such that if the first and third zones were applied to wrappers of smoking articles as a single continuous band, the smoking articles would exhibit substantially no occurrences of total burn through and self-extinguishment under free burn conditions,
so that lit smoking articles comprising said first, second and third zones exhibit reduced occurrences of self-extinguishment under free burn conditions, as compared to smoking articles comprising wrappers whereon the first and third zones are applied as a single continuous band, while maintaining substantially no occurrences of total burn though”As is clear, in the claims before amendment the wrapper could have any number of layers of add-on material and the add-on material did need not to be, as far as practical, in a layer as such. After amendment, the first and third zones comprise a single layer of add-on material. Furthermore, there was no reference in the claim prior to amendment as to whether or not the second layer comprised add-on material or not. After amendment it cannot.
The applicant has stated that “[w]hat appear to be small changes may turn out to be significant”. Since the applicant is yet to engage an expert, they have not been able to get an expert’s comments on the relevance of the combination of features of the amended claims. Nevertheless, the applicant submitted that, as the amendments specify specific zones to be a single layer of add-on material, this distinguishes the current application over US 2004/0099280. US 2004/0099280 is, in the opinion of the opponent’s declarant, prejudicial to the novelty of the greatest number of claims (see page 13 paragraph 54 to page 17 paragraph 73 of the declaration). The applicant submitted that this document “discloses zones of add-on material having uniform thickness, but they are not single-layer structures and typically comprise layers with different compositions or there is material provided in the gap.” The applicant also submitted that the amendment has the result that “the relevance of the closest prior art is significantly reduced.”
Clearly, an amendment that has the effect of removing the document which is prejudicial to the novelty of the greatest number of claims will have a significant effect on the evidence in answer to this part of the evidence in support. In these circumstances, it is appropriate to grant a stay.
The stay can be back dated to date on which the amendments were filed as per the Deputy Commissioner’s decision in ExxonMobil Upstream Research v Shell Internationale Research [2014] APO 22. This would start the stay at 19 August 2014. I therefore direct that the substantive opposition be stayed until the Commissioner informs that parties that the amendments have been allowed, withdrawn or refused.
Discretionary considerations
An exceptional circumstance in the form of a stay directed by the Commissioner has been established. However, the Commissioner still has discretion as to whether or not to grant the extension of time under reg 5.9.
No submissions were filed which give me a reason not to grant the extension of time and I cannot see any reason not to exercise the discretion of reg 5.9 and grant the extension of time.
I therefore grant an extension of time because there are exceptional circumstances under reg 5.9(2)(b).
The time given by the Deputy Commissioner in Exxon was one month after the Commissioner advised the parties that the amendments were allowed, withdrawn or refused. Given that a notice of opposition to the amendments has already been filed, I grant an extension for filing evidence in answer to one month after the Commissioner has informed the parties that the amendments have been allowed, withdrawn or refused, or one month after the date of this decision, whichever is later.
Conclusion
I hereby direct that the opposition be stayed until the Commissioner informs the parties of the outcome of the s 104 amendments filed on 19 August 2014. I consider that this is an exceptional circumstance under regulation 5.9(2)(b) that may provide for an extension of time. The time to file evidence in answer is extended to one month after the stay is lifted, i.e. one month after the Commissioner informs the parties that the amendments have been allowed, refused or withdrawn or one month from the date of this decision, whichever is later.
Costs
It is usual that costs should follow the event. Although an extension of time has been granted, it could not be established that the applicant has acted promptly and diligently. The request for the stay, which led to the extension being granted, was not filed until after this hearing had been requested. Given these circumstances I award costs against the applicant.
Keith Wagg
Delegate of the Commissioner of Patents
1
5
0