Cantarella Bros Pty Ltd v Nestec S.A
[2015] APO 15
•10 April 2015
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Cantarella Bros Pty Ltd v Nestec S.A. [2015] APO 15
Patent Application: 2010201295
Title:Capsule with sealing means
Patent Applicant: Nestec S.A.
Opponent: Cantarella Bros Pty Ltd
Delegate: Dr S.D. Barker
Decision Date: 10 April 2015
Hearing Date: Written submissions completed on 13 March 2015
Catchwords: PATENTS – extension of time to file evidence in answer – regulation 5.9 – all reasonable efforts were made – actions were prompt and diligent at all times – extension granted
Representation: Patent applicant: Shelston IP
Opponent:FB Rice
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2010201295
Title:Capsule with sealing means
Patent Applicant: Nestec S.A.
Date of Decision: 10 April 2015
DECISION
I grant an extension of time to file evidence in reply until 6 March 2015.
I award costs according to Schedule 8 against Cantarella Bros Pty Ltd.
REASONS FOR DECISION
This matter concerns a request for an extension of time to file evidence in answer and is determined under regulation 5.9 of the Patents Regulations as amended on 15 April 2013 by the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No 1).
Background
Patent application 2010201295 in the name of Nestec S.A. (Nestec) was advertised as accepted on 6 February 2014 and a notice of opposition to the grant of a patent was filed by Cantarella Bros Pty Ltd (Cantarella Bros) on 6 May 2014. A separate opposition by Koninklijke Douwe Egberts B.V. (Douwe Egberts) has been withdrawn.
Cantarella Bros filed a statement of grounds and particulars on 6 August 2014. Evidence in support was completed on 5 November 2014. Evidence in answer was due by 6 February 2015. On this day, part evidence in answer was filed and Nestec requested an extension of time for filing evidence in answer until 6 March 2015. The remaining evidence was filed on 6 March 2015.
The delegate advised on 9 February 2015 that he required further information in order to be satisfied that an extension was appropriate. Nestec filed further information in support of the request for extension on 12 February 2015.
The delegate advised on 13 February 2015 that he was satisfied that an appropriate case had been made out in regard to the request for an extension of time. Cantarella Bros indicated that they objected to the extension and asked to be heard. The hearing was conducted by means of written submissions. Both parties filed submissions.
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:
(a) 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
(b) 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;
(c)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.
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:
1.Has the party (and their attorney or agent) made all reasonable efforts to comply with all relevant filing requirements?
2.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?
3.Were there exceptional circumstances that warrant the extension?
10. 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."
11. 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 application for extension of time
Nestec's application for an extension of time in which to file evidence in answer, filed 6 February 2015, stated the following:
"Background
3. The Opponent's Statement of Grounds and Particulars was filed on 6 August 2014. This document cites 23 prior art documents that are alleged to support the Opponent's case on the grounds of lack of novelty and lack of inventive step. The Opponent also relies on the grounds of lack of clarity, lack of fair basis and inutility.
4. The grant of the Opposed Application was also opposed by a third party, Koninklijke Douwe Egberts B.V. (Douwe Egberts) (now withdrawn). In broad terms, Douwe Egbert's Statement of Grounds and Particulars (dated 6 August 2014, and amended on 6 November 2014) included similar grounds of opposition to that of the Opponent. In addition, Douwe Egberts proposed to rely on 22 prior art documents, only 5 of which were common with the documents cited by the Opponent.
5. The Opponent's Evidence-in-Support was filed on 6 November 2014. Accordingly, the deadline for the filing of Nestec's Evidence-in-Answer was 6 February 2015. The deadline for the filing of Nestec's Evidence-in-Answer in respect of Douwe Egbert's opposition was 7 February 2015.
6. Nestec was advised of Douwe Egberts' withdrawal of its opposition to the Opposed Application on about 3 December 2014. Accordingly, up until that date, Nestec and its Australian patent attorneys were required to review, consider and prepare for two separate substantive oppositions involving evidence filed by the Opponent and Douwe Egberts and 40 cited prior art documents.
7. In addition, Nestec was advised on 13 October 2014 that the hearings for two co-pending oppositions involving two other patent applications filed by Nestec were scheduled to be held on 4 February 2015 and 5 February 2015. These other co-pending oppositions generally concerned the same field of technology described in the Opposed Application. It was expected therefore that in the 2-3 week period leading up to these hearing dates, Nestec and its Australian patent attorneys would be required to prepare written submissions in support of these other oppositions in addition to completing the Evidence-in-Answer for this proceeding and the Douwe Egberts opposition.
8. In the circumstances, Nestec and its Australian patent attorneys (noting that the same attorneys have been working on all these matters at all relevant times) were required to invest significant time and resources in order to prepare for four substantive oppositions over the three month period of about 6 November 2014 to 7 February 2015.
9. Due to the Christmas and New Year holiday period, progress on the preparation of Nestec's evidence was disrupted for a period of about three weeks due to staff and experts taking leave. This disruption in effect has resulted in Nestec having a period of only just over two months to prepare its Evidence-in-Support.
Chronology of work carried out to date to prepare Evidence-in-Answer
10. Nestec has made all reasonable efforts to comply with the current evidence deadline and has at all times acted promptly and diligently to ensure that its Evidence-in-Answer may be completed and filed within time. In particular:
• Nestec's Australian patent attorneys had taken steps to identify and formally retain suitable experts who could assist in this proceeding by mid-October 2014, well in advance of receiving the Opponent's (and Douwe Egberts') Evidence-in-Support.
• Further, multiple experts were retained in order to ensure that sufficient expert time and resources could be dedicated to the preparation of evidence in this proceeding.
• At all times, there have been two Australian attorneys working diligently to progress the evidence preparation in this proceeding on behalf of Nestec.
• Review of the Evidence-in-Support by Nestec's Australian patent attorneys commenced immediately upon its receipt.
• Also upon receipt of the Evidence-in-Support, Nestec's Australian patent attorneys immediately commenced their review and analysis of the prior art documents in light of that evidence. Completion of this analysis was significantly delayed by the fact that it was not until 3 December 2014 that the Douwe Egberts opposition was withdrawn, putting Nestec and its Australian patent attorneys in the position of having to review and consider a total of 40 cited prior art documents up until that date. Further delays arose from the fact that many of the prior art documents were in a foreign language.
• Nestec and its Australian patent attorneys formulated a strategy for their discussions with the experts and the preparation of the evidence which had to take into account the availability of each expert at various times over the period of 6 November 2014 to 7 February 2015, and the fact that the experts were required to review and consider two sets of Evidence-in-Support as well as 40 prior art documents.11. Nestec considers that its approach to date in preparing the Evidence-in-Answer has been highly efficient, with more than reasonable time and resources being dedicated to this matter. Four declarations were effectively completed and filed within a period of only about two months.
Further, this work was completed during a period in which Nestec and its Australian patent attorneys were also responsible for preparing submissions on two other co-pending opposition proceedings for Nestec, and also responsible for progressing evidence preparation in the Douwe Egberts opposition. The Douwe Egberts opposition was withdrawn one month into Nestec's evidence period in this proceeding, well after Nestec and its Australian patent attorneys had already invested a substantial amount of time and resources to it.
13. Nevertheless, despite the above efforts and measures taken, Nestec has been unable to complete preparation of its Evidence-in-Answer. The Evidence-in-Answer already filed includes an analysis of the Opposed Application and cited prior art by only one of the experts engaged by Nestec. A short extension of one month is required to allow completion of the discussions with Nestec's other experts in relation to the Opposed Application and cited prior art and to prepare supplementary declarations by the remaining two experts on these matters.
14. The short extension requested in effect corresponds with the time lost to Nestec as a result of the Christmas / New Year holidays. Accordingly, any extension granted would merely serve to normalize the period in which Nestec would ordinarily be allowed to prepare its Evidence-in-Answer, thereby correcting for the time lost over the holiday season. Nestec can see no grounds on which the Opponent would be unduly prejudiced if this extension of time were it to be allowed. Such a short extension of time would certainly not lead to any significant delay to the resolution of this proceeding.
15. In contrast, in the absence of the grant of the extension of time requested, Nestec would suffer prejudice as the refusal of an extension of time would preclude Nestec from adducing evidence of substantial probative value and which ought to be before the Commissioner in the determination of this proceeding.
16. Further details of Nestec's efforts are set out in the annexed table (Annexure A). Where possible, without compromising confidentiality and client-attorney privilege, details of the correspondence and discussions between Nestec and its Australian attorneys and experts are provided."
13. The delegate sought the following additional information:
"Your request discusses various barriers encountered by the applicant in the formulation of evidence relating to multiple oppositions to the present application. The request also provides detail in regard to the steps taken in formulating the evidence of Mr MacDonald. However there is little information provided in regards to the actions of the other experts, Mr Wilson and Mr Crick.
In this regard around late November/early December these experts were contacted regarding their background and for provision of part of the opposed application. No other action with these experts is identified until late January of 2015. This amounts to a period of approximately two months. Such a period seems to be a significant unexplained delay in the evidence gathering of these two experts. As such I am not satisfied that an extension is justified."
14. Nestec replied with the following information:
"5. Given the significant number of matters raised in the Applicant's Evidence-in-Support and the extensive volume of prior art documents cited by the Applicant, the amount of time taken to explore these matters in detail with Mr MacDonald was very reasonable.
6. Also, in light of the substantial amount of time and resources required simply to complete Mr MacDonald's evidence, Nestec does not consider it was unreasonable to set in abeyance completion of Mr Wilson's and Mr Crick's evidence, to ensure that it was in a position to complete at least one expert declaration by the evidence deadline.
7. Further, and equally importantly, it is not an insignificant matter that the Christmas /New Year holidays fell in the period of which the Commissioner is concerned, thereby effectively reducing the time available to progress preparation of any of the evidence by 2-3 weeks due to staff and experts taking leave. This was a matter that was simply beyond Nestec's control. The short extension of time requested by Nestec serves to normalise the evidence period due to the time lost over these holidays.
8. As stated in Annexure A to Nestec's application for an extension of time, further correspondence was exchanged with Mr Wilson and Mr Crick during the week of 26-30 January 2015 for the purposes of finalising their draft declarations, at least insofar as the evidence in relation to each of their qualifications, professional experience and the state of the art prior to the relevant priority date was concerned. This correspondence with these experts took place immediately when it became apparent that preparation of Mr MacDonald's declaration was close to being completed."
The objection
15. The objection by Cantarello Bros focuses on three matters:
Was it appropriate that only two patent attorneys worked on this opposition and two related matters;
What as the impact of the opposition by Douwe Egberts (now withdrawn); and
What was the impact of the Christmas/New Year period.
Has the party made all reasonable efforts to comply with all relevant filing requirements?
16. Each of the three matters raised by Cantarella Bros raises questions as to whether Nestec acted reasonably. I will deal with each of the matters in turn.
Two patent attorneys
17. Nestec stated in their submissions of 13 March 2015:
"The Applicant acknowledges that there have at all times been two attorneys effectively working continuously in this matter, to complete preparation of the Applicant's Evidence-in-Answer. The Applicant submits however that the reliance on two attorneys was reasonable given that there were no other available attorneys within the attorney firm to whom the work could have been delegated."
18. This reminds me of the situation that arose in Mineral Technologies Pty Ltd v Orekinetics Investments Pty Ltd [2014] APO 63. In that case I accepted that it was reasonable that Mr Gates was unable to delegate responsibility for the opposition as there was no one else in his company who could pick up that work. Similarly, Nestec have explained why it was reasonable to utilise only two patent attorneys.
The withdrawn opposition
19. Initially there were two oppositions to the grant of a patent. This necessarily increased the complexity for the applicant. The opposition by Douwe Egberts was withdrawn on 3 December 2014, which removed this aspect of complexity. However, Nestec pointed out they had already carried out a significant amount of effort in considering the evidence in the withdrawn opposition.
20. It cannot be doubted that it was reasonable to consider the evidence in the opposition by Douwe Egberts up until the date that the opposition was withdrawn. This necessarily reduced the time available to focus on the Cantarella Bros opposition.
Christmas/New Year
21. The period for preparing evidence included the Christmas/New Year holidays. The delays associated with this time of year need to be factored into the preparation of evidence. In this case Nestec stated:
"provisions were made by the Applicant's attorneys to ensure that the Applicant's experts (being Mr Wilson, Mr Crick and Mr MacDonald) were either provided with their draft declarations or relevant material to review and consider over the holidays to ensure that progress could be made to the completion of their declarations following their holiday leave"
22. The preparation of draft declarations prior to the holiday period so that they can be reviewed over the holidays is a reasonable approach.
Overall
23. It is clear that Nestec had a reasonable strategy for dealing with this opposition as well as the other related oppositions.
Was the failure to file the evidence despite acting promptly and diligently?
24. The next issue is whether Nestec have implemented their approach in a prompt and diligent manner. In considering this question in Fugro Airborne Surveys Corp v Geotech Airborne Limited [2014] APO 23, I said at [20]:
"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."
25. Cantarella Bros submit that there is little information as to what Nestec did in the period from 3 December 2014 to the end of the evidentiary period. I do not agree. It is apparent that the declaration of Mr MacDonald was the primary focus, and that the declarations of Mr Wilson and Mr Crick were to be worked on once this was completed. There is evidence that interviews with Mr MacDonald and drafting of his declaration took place throughout December and January, up to the end of January. I do not believe there are any significant unexplained delays in the preparation of Mr MacDonald's evidence. I am satisfied that the failure to file evidence in time was despite acting promptly and diligently.
Overall
26. It is clear that Nestec had a reasonable strategy for dealing with this opposition as well as the other related oppositions. This strategy was being implemented without unexplained delays. I am satisfied that Nestec have been prompt and diligent, and that they have made all reasonable efforts to comply with the relevant filing requirements.
27. It will be apparent from what I have said that although the evidence period included the Christmas/New Year holiday period, this does not automatically entitle the party to an extension of time equivalent to the holiday period. The holiday period is part of the context in which a party is operating, and they need to have a strategy to minimise its impact. Where the evidence cannot be completed despite this strategy, an extension is likely to be granted. However, it is granted because the party has acted reasonably, promptly and diligently, not because it is Christmas.
Were there exceptional circumstances?
In the TRED decision I stated that exceptional circumstances were:
"matters outside the normal evidentiary process, and outside the control of the party, where it would be unreasonable to insist on a party filing their evidence"
29. Nestec submitted that the Christmas/New Year holiday period should be seen as exceptional circumstances. It is unnecessary to determine whether there are exceptional circumstances under paragraph 5.9(2)(b), as I have already determined the criteria of 5.9(2)(a) have been satisfied. However, I note that while holidays are clearly outside the evidentiary process, and also outside the control of the party, they are a predictable event. In Sportingbet Australia v Tabcorp International Pty Ltd [2014] APO 21 at [68] the delegate said that the Spring Racing Carnival "occurs every year as such its occurrence could be anticipated and acted upon to some degree at least", and it was not an exceptional circumstance. Christmas is no less foreseeable than the Spring Racing Carnival.
Discretionary matters
30. Once the mandatory requirements of paragraphs 5.9(2)(a) or 5.9(2)(b) have been met, an extension is not automatic. The Commissioner "may" extend the period for filing evidence. I can see no reason not to exercise the discretion.
Conclusion
31. I am satisfied that an extension of time is appropriate.
32. Finally, I need to consider what length of extension is reasonable in the circumstances. The remainder of the evidence was filed on 6 March 2015. I consider it is reasonable to extend the time until that date.
Costs
33. I can see no reasons to depart from the normal approach that costs should follow the event.
Dr S.D. Barker
Delegate of the Commissioner of Patents
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