Cadbury Schweppes Pty Ltd v Wm Wrigley Jr. Company - [2006] APO 35

ABSTRACTS OF DECISIONS
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No.772873 in the name of Wm Wrigley Jr. Company

Title: Comestible coating process using hydrogenated isomaltulose mixture

Action: Opposition under section 59 by Cadbury Schweppes Pty Ltd. and a request for an extension of time under regulation 5.10(2) to serve evidence in answer

Decision: Issued 13 October 2006.
Abstract

The applicant Wm Wrigley Jr. Company has provided less than satisfactory explanations for the delay in completing their evidence in answer. They have not justified why they require a completely different set of witnesses and even if this was the case, then it is not clear why they did not take earlier steps to identify relevant experts. However they have now identified an independent witness whose evidence is likely to be highly relevant and a draft declaration from this witness should be prepared within the extension sought. On the other hand the balance of the interests of the parties, and the public interest, indicates an extension of time is appropriate.
The requested extension of time until 28 November 2006 to complete evidence in answer is granted despite the applicant not providing a satisfactory explanation of the delay. In such circumstances, the opponent was reasonable in objecting to the current extension of time and therefore costs awarded against the applicant.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No 772873 by Wm Wrigley Jr. Company, an opposition under section 59 by Cadbury Schweppes Pty Ltd and a request for an extension of time under regulation 5.10(2) to serve evidence in answer.

BACKGROUND

Patent application 772873 for an invention titled “Comestible coating process using hydrogenated isomaltulose mixture” was filed on 30 May 2000 in the name of Wm Wrigley Jr. Company (Wrigley). The application was advertised accepted on 13 May 2004. On 9 August 2004, Cadbury Schweppes Pty Ltd (Cadbury) filed a notice of opposition. A Statement of Grounds and Particulars followed on 9 November 2004 and evidence in support was completed on 30 August 2005. Wrigley requested, and was granted, three extensions up to 28 August 2006 to serve evidence in answer. Part evidence in answer in the form of two statutory declarations was served on 29 March 2006 and 28 April 2006 respectively.
On 28 August 2006, the applicant requested its fourth extension of time to 28 November 2006, and the opponent objected to this extension.
The request for the extension of time to file evidence in answer and the objection thereto was heard in Canberra on 28 September 2006. Both parties appeared by telephone. The opponent filed written submissions in support of its objection and was represented by Mr Edward Heerey of counsel instructed by Ms Natalie Hickey, Mr Peter Selvay and Mr Jonathan Kelp of Mallesons Stephen Jacques. The applicant filed written submissions and was represented by Mr Andrew Lee and Dr John McCann of Spruson and Ferguson.
THE APPLICATION FOR AN EXTENSION OF TIME
The circumstances in which, and the grounds upon which, the application for an extension of time was made were given as follows:
“We require a further extension of time in which to complete our Evidence-in-Answer. As previously advised, we have already served two statutory declarations as part Evidence-in-Answer, namely:
• Statutory Declaration of David Barkalow, together with Exhibits DB-1 and DB-2;
• Statutory Declaration of Julius Zuehlke, together with Exhibit JZ- 1.
The extension of time is required for us to prepare and execute a third statutory declaration which will complete our Evidence-in-Answer. We have had delays in engaging the third expert who we had initially thought would assist us in the execution of this declaration. This has led to the situation where we have also been searching for another expert who can execute our proposed third statutory declaration. Our searching for a suitable expert includes asking our Australian patent attorneys to located (sic) a suitable expert by liaising with the commercialisation section of universities.
We believe that we will be in a position to engage a suitable expert within the extended period and prepare a draft declaration for review by us and our Australian patent attorneys.
In view of the extensive Evidence-in-Support lodged by the opponent for this matter, we submit that it is in the public interest that the opposition be judged on its merits and that we be granted the extension so that we can properly answer the evidence raised by the opponent.

We submit that if the Commissioner refuses our application, then there would be a denial of natural justice in these proceedings, since the applicant would not have been afforded the opportunity of completing our Evidence-in-Answer.
We submit that the extension should be granted.”
THE LAW ON EXTENSIONS OF TIME
Extensions to the time limits to file evidence in oppositions is at the discretion of the Commissioner, and is governed by subregulation 5.10(2). The Federal Court has considered the requirements of regulation 5.10 in Ferocem Pty Limited v. Commissioner of Patents (1994) 28 IPR 243, A Goninan and Co Ltd v Commissioner of Patents and Another (1997) 38 IPR 213, and National Starch & Chemical Company v Commissioner of Patents (2001) 50 IPR 398. The relevant considerations arising from these decisions have been set out and followed in numerous patent office decisions relating to regulation 5.10, and may be summarised as follows:
(a)The broad discretion afforded by Regulation 5.10 cannot be reduced to insistence on imperative compliance with particular requirements;
(b)The exercise of this discretionary power requires proper, genuine and realistic consideration of all the relevant aspects that pertain to the application;
(c)The provision of a satisfactory explanation of the delay is a relevant consideration, but is not mandatory;
(d)The public interest in determining a serious opposition on its merits is a relevant consideration and must be balanced with the requirement that matters before the patent office should be dealt with in an efficient, orderly manner and not be unduly prolonged;
(e)The interests of the opponent, the applicant and any other parties are a relevant consideration.
In summary, it is clear from these decisions that the Commissioner, having given both parties the opportunity to make representations, may grant an extension only if reasonably satisfied that it is appropriate in all of the circumstances
RELEVANT CONSIDERATIONS
Explanation of the delay
At the hearing the opponent submitted that the applicant had not provided a satisfactory explanation of the delay in filing the evidence in answer and that the extension should therefore not be granted. The main arguments put forth by the opponent in opposing the extension were as follows:
- The present application would extend the time for preparing and serving evidence in answer to 15 months.
- The part evidence in answer filed by the applicant comprising declarations by Wrigley employees, David Barkalow and Julius Zuehlke, do not address any of the substantive grounds of opposition raised in their evidence in support.
- There is no indication that a third witness who has still not been located would provide evidence addressing the substantive grounds like novelty or obviousness. This is supported by the fact that the applicant’s written submissions at the hearing states that the statutory declaration by the third witness “will also corroborate the two statutory declarations” made by the first two witnesses.
- The applicant’s inability to find the third expert so far is more remarkable given that prior to the period for preparing evidence in answer, the applicant had prepared and filed detailed evidence by at least 5 witnesses dealing with the validity of a related patent of the applicant in Federal Court proceedings (reported as Wm Wrigley Jr Co v Cadbury Schweppes Pty Ltd (2005) 66 IPR 298). This patent which also relates to a coated chewing gum with hydrogenated isomaltulose and a method of making such a gum was found to be invalid and subsequently revoked. If they are searching for a witness different from the 5 witnesses used in these earlier proceedings, it is highly unlikely that such a witness exists and in any event such expert evidence would seem incapable of overcoming the opponent’s evidence given the outcome in the Federal Court proceedings.
- Three of the opponent’s witnesses who have provided statutory declarations as part of the evidence in support for the current opposition, were also witnesses in the Federal Court proceedings. Much of their evidence for the current opposition incorporates their evidence in the earlier court proceedings and the applicant is therefore aware of most of the issues in the evidence in support even before it was actually filed.
I have some sympathy for the opponent’s position. Their evidence in support was finalised 15 months ago. It is clear from their evidence that the major ground of opposition is obviousness. The applicant appears to have provided no evidence to date addressing this particular ground of opposition and further appears to have made no progress in identifying a witness who is prepared to give evidence on this issue at the time of filing the request for the extension. This is despite the applicant having been involved in Federal Court proceedings where similar issues were raised.

The applicant argued that they were not obliged to use the same witnesses in both matters. They submitted that the current application deals with a method of making a chewing gum rather than a chewing gum product as claimed in this earlier patent and they will therefore require evidence from a different skilled worker (an independent expert with knowledge and experience in the manufacture of confectionery).

I am not convinced that the applicant has justified why they require a completely different set of witnesses. Three of the witnesses used by the opponent for the current opposition were also used in the earlier proceedings and the opponent submits that the evidence given by these witnesses is similar to the evidence they gave in these proceedings. Even if I accept that the applicant needed different witnesses, I would expect that the applicant would have taken steps much earlier to identify relevant experts. The applicant submitted that the attorneys involved in the current opposition are different from those who worked on the Federal Court and hence were not fully informed of these proceedings. However it is my view that this cannot justify the delays in locating a suitable independent witness given that the applicant could have easily briefed their current attorneys.

The applicant further submitted that the search for an independent expert with knowledge of the common general knowledge in Australia has been difficult since most of the experts work for the opponent Cadbury Schweppes or their subsidiary Red Tulip. The applicant’s Australian attorneys have been searching Australian universities and confectionary associations to locate a suitable independent expert but it is not easy to find such an expert. In further support of this argument the applicant alluded to seven other oppositions between the two parties where the opponent Cadbury is still to serve evidence in support.
I accept that it can be difficult finding someone in a field where the opponent is a major commercial player in Australia, but the applicant should have been aware of this problem much earlier and taken steps to address this issue (British Telecommunications Public Limited Company v Telstra Corporation Limited 2000 APO 50). I also note that none of these other oppositions mentioned by the applicant appear to be directed to inventions relating to the coating of chewing gum with isomaltulose.
It is my view that the applicant does not appear to have been as diligent as they could have been in the preparation of the evidence in answer. I do not agree with the applicant when they claim that the two statutory declarations filed as part evidence in answer indicates that they have been diligent. These two declarations appear to be no more than a material statement of facts about how the invention came about and do not address any of the substantial issues, especially obviousness, raised in the evidence in support.
Having said that, I note the applicant’s submission at the hearing that they have now identified a witness who works in the field of confectionery manufacture and that they expect to retain him. They have also indicated that the evidence from this witness would address all of the substantive issues of the opposition including obviousness and would therefore be highly relevant and that a draft declaration from this witness is likely to be prepared within the extension sought. Although I am not convinced that they provided a satisfactory explanation of the delay to date, I accept that they are now making progress on their evidence. Therefore I am prepared to give the benefit of the doubt to the applicant that the previous delays in the completion of its evidence in answer is not a deliberate strategy but rather suggests poor case management. I am also mindful that the provision of a satisfactory explanation of the delay is a relevant consideration, but is not mandatory.
Interests of the parties
The applicant argued that if the extension was not granted then they would be placed in an unfair position in that it would not have been afforded an opportunity to serve important and significant evidence addressing the issues raised in the evidence in support and this would lead to a denial of natural justice in these proceedings. They also submitted that the applicant will be shut out of the opposition if they are precluded from filing evidence in answer addressing the substantive issues of the opposition.
I accept that the evidence being prepared by the applicant is likely to be highly relevant because it will address the major grounds of opposition including obviousness which the other filed evidence does not address. I therefore believe that the applicant’s interest lies in allowing the extension.
The opponent’s interest on the other hand is to have the matter expeditiously dealt with. It is clear from the applicant’s submissions at the hearing that the current extension will not be the last and that at least one more request for extension is more than likely. However given that a serious opposition is in train and that the evidence from the third witness is likely to the only evidence which addresses the substantive issues raised in the evidence in support, it is my view that the balance in relation to the interests of the parties is currently in favour of the applicant.
Having said that I note that if there are further delays in engaging the third witness or in the preparation of his evidence, then the balance is likely to shift in favour of the opponent. I am also mindful that if the applicant is shut out, then there exists the possibility that they could file a divisional application which would delay the opposition even further.
The public interest
The public interest calls for a balance between the requirements that oppositions be dealt with expeditiously and economically, and that a serious opposition be dealt with on its merits (Ferocem (supra) and Goninan (supra)).
The circumstances presented by the applicant to justify the instant fourth application for extension of time relate to finding a suitable independent expert witness and the preparation of expert evidence relevant to the common general knowledge in the art of chewing gum and confectionery manufacture.
I refer to the following comments by Sackville J. in A Goninan and Co Ltd v Commissioner of Patents and Another (1997) 38 IPR 213:
“In order for the Commissioner or his delegate to give proper, genuine and realistic consideration to the aspect of the public interest I have identified, it is necessary to consider the nature of the evidence the opponent seeks to adduce and the significance of that evidence for the opposition proceedings. I do not mean to suggest that the evidence has to be scrutinised in the same way as would occur at a hearing on the merits. But unless the delegate forms a view as to the issues addressed by the proposed evidence, and whether that evidence is likely to be important in the opposition proceedings, it is difficult to see how proper consideration can be given to the public interest in having such proceedings being determined on their merits.”
As I mentioned earlier the part evidence in answer comprising the two declarations do not address any of the substantive issues raised in the evidence in support including the state of the common general knowledge in the art. The applicant has submitted that the evidence of the third witness is likely to be highly relevant to the determination of these substantive issues and would be likely to lead to a more correct and just determination of the opposition. While I agree that the applicant has not been as diligent as they could have been I am satisfied that the applicant is now taking appropriate steps to complete their evidence within a reasonable time frame.
I find it is in the public interest to allow the extension of time.

DECISION

I have found that the applicant has provided less than satisfactory explanations for the delay. The previous delays are more likely to be caused by poor case management rather than a deliberate attempt to delay proceedings.

However they now appear to be on track and the evidence of the third witness is likely to be highly relevant. The balance of the interests of the parties, and the public interest, indicates an extension of time is appropriate. I note however that this balance is likely to change if there are further delays in the preparation of evidence.

I allow the requested extension of time until 28 November 2006 for the applicant to engage a suitable third expert and prepare a draft declaration within the extended period. The applicant is however on notice that the Commissioner is unlikely to be sympathetic to any further extensions of time unless they can establish that substantial progress has been made in the preparation of its evidence in answer from the third witness and that this evidence will address all of the substantive issues raised in the evidence in support.
COSTS
The normal practice is that costs should follow the event. However in the present matter, I have decided to grant the extension of time despite the applicant not providing a satisfactory explanation of the delay. In such circumstances, the opponent was reasonable in objecting to the current extension of time and I therefore award costs against the applicant Wm Wrigley Jr. Company.
R Subbarayan
Delegate of the Commissioner of Patents
13 October 2006
Patent attorneys for the applicant: Spruson and Ferguson
Patent attorneys for the opponent: Mallesons Stephen Jacques