British Telecommunications Public Limited Company v Telstra Corporation Limited

[2000] APO 50

OFFICIAL NOTICE

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Application  :          No. 682935 in the name of British Telecommunications Public Limited Company

Title:          Charging For Usage of a Telecommunications Network

Action: Opposition under section 59 of the Patents Act 1990 by Telstra Corporation Limited and an application for an extension of time in which to serve evidence in answer.

Decision:          Issued            .

Abstract

The requested three month extension of time to serve evidence in answer was granted but only on the basis of an undertaking given by the applicant, at the hearing, that the evidence would be completed within that time.

The applicant did not provide a satisfactory explanation for the delay in serving their evidence but, on the basis of their submissions, it is likely that the evidence they sought to adduce would be of significance to the opposition proceedings.  It was found to be in the applicant's interests for the extension to be allowed.  The public interest and the opponent's interests are in ensuing that the evidence is completed expeditiously.  On the basis of the applicant's undertaking to complete their evidence within the time requested and not to request any further extensions, neither the public nor the opponent would be unduly disadvantaged if the current extension were granted.

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent Application No. 682935 by British Telecommunications Public Limited Company, opposition under section 59 by Telstra Corporation Limited and a request by the applicant under regulation 5.10(2) for an extension of time to serve evidence in answer.

BACKGROUND

Patent application 682935 in the name of British Telecommunications Public Limited Company (hereafter referred to as BT) was advertised accepted on 23 October 1997.  Telstra Corporation Limited (hereafter referred to as Telstra) filed a notice of opposition to the grant of the patent on 23 January 1998, followed by the service of a statement of grounds and particulars on 23 April 1998.  Amendments to the statement of grounds and particulars were made on 23 July 1998 and 23 October 1998.  Evidence in support was finalised on 24 February 1999.

The applicant, BT, was granted extensions of time from 24 May 1999 to 24 May 2000 in which to serve evidence in answer.  On 13 April 2000, Telstra advised us that they intended to object to any further requests for extension of time by BT.  Thus, when BT applied for a three month extension of time from 24 May 2000 to 24 August 2000, Telstra notified us of their objection.  To date, BT have not served any evidence in answer.

This matter was set for hearing in Canberra on 11 July 2000.  BT was represented by Mr Phillip Pluck from Baldwin Shelston Waters and Telstra was represented by Mr Adrian Ryan, Barrister.

DECISION

The law on extensions of time

The time for serving evidence in answer is three months from the date of service of the evidence in support, where the opponent intends to rely on evidence in support as in the present case, according to regulation 5. 8.  This time can be extended under regulation 5.10(2):

"(2)  The Commissioner may:
(a)  on the application of a party in the approved form;  and
(b)  on such reasonable terms (if any) as the Commissioner specifies;

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 paragraph 5.4(1)(a)."

This provision must be read in conjunction with regulation 5.10(5):

"(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 from this that the Commissioner must ensure that the other party has been notified, and that both parties be given the opportunity to make representations.  An extension can then only be granted if the Commissioner is reasonably satisfied that it is appropriate.

Burchett J in Ferocem Pty Ltd v Commissioner of Patents (1994) 28 IPR 243 states:

"The determination of an application for an extension of time under reg 5. 10(2) involves a balancing exercise, in which competing considerations must be taken into account"

The delegate in ABB Engineering Construction Pty Limited v A Goninan & Co Ltd, (1998) AIPC 91-430 reviewed the principles governing extension of time to serve evidence in support as considered by Burchett J in Ferocem Pty Ltd v Commissioner of Patents (supra) and Sackville J in A Goninan & Co Ltd v Commissioner of Patents (1997) 38 IPR 213. These principles can be summarised as follows:

1. The power is discretionary;

2. An explanation of the delay is a relevant consideration, but not mandatory;

3. The public interest in determining a serious opposition on its merits is a relevant consideration;

4. The interests of the opponent and other parties are a relevant consideration; and

5. The interests of any other parties is a relevant consideration.

I will apply the general principles from these cases to the present facts.  The power to grant an extension under regulation 5.10 is discretionary but I must not either grant the extension or refuse it without giving proper consideration to all relevant considerations.

Explanation of the delay

The application for extension of time dated 24 May 2000 states:

"The evidence of the inventor is being finalized and should be filed shortly.  This evidence has been delayed by other demands on the inventor's time.  Further time is required to settle this evidence, have it executed and sent to Australia for service.

In view of our attempts to gather meaningful evidence from our records being frustrated as a result of most of the records having now been destroyed, we are now seeking an Australian expert to comment on the opponent's evidence.  Our Australian attorney's have sought assistance from a local university body and a number of potential experts have been considered but found unsuitable.  The search for an expert is actively continuing but has been complicated by the opponent's dominance of this field within Australia.  Further time is required to locate a suitable expert, have the evidence reviewed and prepare and serve evidence based on this review."

Mr Pluck for BT expanded on these reasons at the hearing with the following submissions:

"The UK based legal representatives of BT are liaising with the inventor and are preparing a statutory declaration for execution by the inventor.  This process has been complicated by competing demands on the inventor's time, and more importantly because much of the material intended to be relied upon has been archived and many of the employees of BT who were involved in developing the invention have either retired or left the company.  Nevertheless, it is currently expected that the inventor's declaration will be finalised shortly.

Additionally, up to approximately the end of February this year, the legal representatives of BT in the United Kingdom were attempting to find suitable experts to assist in the preparation of their Evidence-in Answer, however no suitable experts were located.  Accordingly, they instructed Baldwin Shelston Waters ("BSW") to take steps to locate suitable experts.  In March 2000, BSW made initial contact with Ms Helen Seabrook of Unisearch Limited who is the Manager of the Expert Opinion Services Division.  BSW requested the assistance of Unisearch to find someone who can provide expert comments on telephone billing systems.  There has been on-going discussions and correspondence between Unisearch and BSW since March 2000 with some possible experts being considered.  However, to date an appropriate expert has not been located.  As noted above, one of the factors contributing to the difficulty in finding appropriate experts is the dominance of the Opponent, Telstra Corporation, in the telecommunications industry in Australia."

Mr Ryan for Telstra submitted that BT have not provided a satisfactory explanation for the delay.  He pointed out that they have not yet served any evidence at all despite being granted five extensions of time in which to do so.  Mr Ryan also submitted that evidence in support was completed in February 1999 and it is not clear what BT has been doing since that time or why they are only now seeking an Australian expert to comment on Telstra's evidence.  Although the request for extension states that evidence from the inventor is being finalised and should be filed shortly, Mr Ryan asserted that BT have provided no detail of the state of this evidence or precisely when it is likely to be filed.

I have no reason to doubt Mr Pluck's assertions that the evidence of the sole inventor is being finalised and should be ready shortly, although he was unable to give an expected date for it to be served.  BT have already had 15 months in which to complete the inventor's evidence but apparently, this has been delayed by other demands on the inventor's time and by much of the relevant documentation being archived and staff being no longer available.  However, I feel that 15 months should easily have been enough time in which to finalise this evidence, even taking into account these difficulties and note that similar reasons were given in support of the earlier extensions.
As to the search for other experts, BT are clearly having difficulties in finding appropriate experts and still have not managed to engage a suitable person.  However, they only appear to have made attempts to locate an Australian expert in March this year, some twelve months after the finalisation of evidence in support.  I can understand their difficulty in obtaining an Australian expert considering the dominance of the opponent, Telstra, in the telecommunications industry in Australia but, given this known dominance, I believe that BT should have anticipated this problem and commenced an extensive search in Australia earlier.

Overall, I am of the view that BT have not provided a satisfactory explanation for the delay in serving their evidence.

The nature and significance of the evidence

Mr Pluck referred me to Goninan & Co Ltd v Commissioner of Patents (supra at page 225) to show that the nature of the evidence sought to be adduced and the significance of that evidence are factors that should be given proper, genuine and realistic consideration in deciding if to grant an extension of time.

No evidence in answer has been served in this opposition.  The request for extension of time refers to evidence from the inventor which, apparently, is due to be finalized and served shortly.  I cannot determine with certainty the nature and significance of such evidence without having seen it and Mr Pluck was not able to give me any indication of the content of this evidence.  However, it seems likely that the inventor's evidence would be relevant to the proceedings.

At the hearing, Mr Pluck said also that "Included in the evidence sought to be adduced by BT is expert evidence regarding the state of the common general knowledge in Australia.  This is clearly relevant to a balanced consideration of inventiveness and is therefore critical to a hearing of the opposition on its merits."  Thus, this was given as the reason for the search for an expert in Australia.  Again, it seems likely that such evidence would be relevant to the opposition.

Thus overall, I am not able to determine the nature and significance of the evidence sought to be adduced but it does seem likely that it would be of significance to these proceedings.

The interest of the applicant

Mr Pluck submitted that the applicant would be "shut out" from serving expert evidence to assist their case if the extension was not granted.  Mr Ryan agreed but argued that "there must be a real question about the extent to which British Telecom actually values this application given its complete failure to date to answer the opposition."  Mr Pluck, however, asserted that there was no doubt that BT were mounting a serious defence to the opposition.  He outlined the steps that the legal representatives of BT in the United Kingdom had taken to find experts to assist in preparation of the evidence in answer.  When their own efforts had failed, they sought the assistance of Baldwin Shelston Waters in this matter but they also had, to date, been unsuccessful in finding an appropriate expert.

I believe that the interests of the applicant certainly lie in the extension being allowed.

The interest of the opponent

Mr Ryan submitted that Telstra "will be seriously adversely affected by the grant of the extension of time.  Telstra obviously has a real interest in the timely resolution of this matter.  It should not have to remain, for an extended period, in a position of uncertainty about what it can and cannot legally do in relation to something as basic as fee charging."  In this regard, I note that the specification is entitled "Charging for usage of a telecommunications network" and is concerned with a method of producing charging details for charging customers for telecommunications services.  Both BT and Telstra are major companies in the telecommunications industry.

Mr Pluck for BT pointed out that Telstra were themselves granted four extensions of time totalling 8 months in which to serve evidence in support which, in his view, showed that they were not in any hurry to complete the evidence and have the matter decided.  He referred me to the decision in Dominion Mining Limited v M.I.M. Holdings Limited and Highlands Gold Properties Pty Ltd (patent application 663525) [1997] APO 27 (11 June 1997) where the Hearing Officer stated:

"I accept the opponents could be affected by further protraction of proceedings if I grant the extension of time.  However I do not think such protraction would have the same undue effect on the opponents as the effect on the applicant of a denial of the opportunity to properly present its case if I refused the extension."

In order to minimise any further delays, Mr Pluck stated that BT were willing to provide an undertaking that the evidence in answer would be completed within the time currently being requested.  That is, that evidence in answer would be completed by 24 August 2000.  When asked what would happen if BT were still unable to find a suitable expert within this time, Mr Pluck replied that, in that case, BT would be willing to rely solely on the inventor's evidence.

I do not believe that it is in the interest of Telstra for further protraction of the opposition process.  BT has already been granted extensions of time totalling one year for this evidence without any evidence being served.  However, the present request for extension is for three months and BT have indicated that they are willing to give an undertaking that their evidence would be completed within this time.  Provided BT ensure that this is the case and their evidence is completed by 24 August 2000, I do not consider that Telstra would be unduly disadvantaged if I were to allow the presently requested three month extension.

The public interest

It is clear that the public interest lies in having a serious opposition determined on its merit in order to prevent the grant of invalid patents.  However, Mr Ryan argued that public interest considerations are greatly diminished when an extension of time is sought by the applicant for service of evidence in answer, compared with an extension for the opponent to serve evidence in support.

Mr Ryan submitted that, if an opposition were to succeed as a result of the applicant being refused an extension of time to serve evidence in answer, the applicant would be deprived of a monopoly to the invention but the public would still have gained the benefit of the disclosure of the applicant's specification while not being burdened by the grant of a monopoly.  Other public interest considerations include maintaining confidence in the administration of the patent system by the timely resolution of opposition proceedings, which Mr Ryan said would not be the case if the parties were allowed prolonged extensions of time for filing evidence.

Mr Pluck pointed out that there are also some public interest considerations in allowing an applicant an extension of time for service of their evidence in answer.  In addition to the applicant's own interests in being granted a patent monopoly, there is a broad public interest that the patent system exists in order to provide an incentive to potential applicants to invest in research and development.

In my view, the evidence in answer is just as important as the evidence in support as the public benefits from a strong patent system.  However, the public interest is not served by excessive delays in service of any of the evidence.  Thus, I find that the public interest in this case is finely balanced and is of little weight in my overall considerations.

Conclusion

I have found above that BT have not provided a satisfactory explanation for the delay in serving their evidence.  However, on the basis of the applicant's submissions it is likely that the evidence sought to be adduced would be of significance to these opposition proceedings.  I have also found that it is in the applicant's interests for the extension to be allowed.  The public interest and the opponent's interests are in ensuing that the evidence is completed expeditiously.  On the basis of the applicant's undertaking to complete their evidence by 24 August 2000 and not to request any further extensions, neither the public nor the opponent would be unduly disadvantaged if the current extension were granted.

On balance, my decision is to grant the extension of time for BT to serve evidence in answer to 24 August 2000.  However, this is on the understanding that BT complete their evidence within this time and make no further request for extension of time in this matter, even if a suitable expert cannot be located.

Costs

While I have found that the opponent's objection to the extension does not succeed and have allowed the extension, I am concerned at BT's delay in serving evidence and do not believe they have adequately explained the delay.  The extension has only been allowed on the undertaking of the applicant, made at the hearing, that their evidence would be completed by 24 August 2000.  Consequently, I award costs against the applicant, BT.

Gillian Jenkins
Delegate of the Commissioner of Patents

Patent attorneys for the applicant  :  Baldwin Shelston Waters, Sydney

Patent attorneys for the opponent   :  Davies Collison Cave, Melbourne