Colin Leslie Young v W. Neudorff GmbH KG & Arthur Yates & Co

[2002] APO 7

OFFICIAL NOTICE

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Application  :          No. 689399 and Petty Patent No. 697781 in the name of Colin Leslie Young

Title:          Stomach-action molluscicides

Action:          Award of costs in two oppositions to the grant of application No 689399, and two notices under section 28 in relation to petty patent No 697781, both by Arthur Yates & Co Ltd and W.Neudorff GmbH KG

Decision:          Issued            

Abstract

1.  The scale of costs contains no items in relation to further evidence.  Consequently there are no costs in relation to further evidence unless the scale is varied.  Variation of the scale requires evidence that more than a normal amount of work was required to deal with the further evidence.

2.  Neudorff were successful on substantive grounds, and made out a complete case.  Costs were awarded in their favour.

3.  Yates were successful on substantive grounds, but relied on key evidence copied from the Neudorff opposition.  No award of costs was made in relation to Yates.

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent Application No. 689399 by Colin Leslie Young, and two oppositions to the grant of a patent by Arthur Yates & Co Ltd and W.Neudorff GmbH KG;  and

Petty Patent No. 697781 by Colin Leslie Young, and two notices under section 28 by Arthur Yates & Co Ltd and W.Neudorff GmbH KG

BACKGROUND

Patent application number 689399 in the name of Colin Leslie Young was opposed (separately) by W.Neudorff GmbH KG (hereafter referred to as Neudorff) and Arthur Yates & Co Ltd (hereafter referred to as Yates).

An extension of the term of petty patent number 689399 (also in the name of Professor Young) was objected to (separately) by Neudorff and Yates.

Both matters were heard together in Melbourne on 16 and 17 August 2001. My decision on the matters issued on 23 November 2001 ([2001] APO 68). I found that the opposition succeeded on the grounds of lack of novelty (claims 1 to 9, 20 and 26), lack of inventive step (claims 1 to 26), lack of clarity (claims 2, 3, 7, 8 and 17) and lack of full description (of the determination of pH values). The opposition was not successful on the ground of manner of manufacture. The basis of these findings was that the specification is deficient in that the composition as claimed can include bone meal, and there is no method for determining pH.

The objection to the extension of term of the petty patent also succeeded as the petty patent is invalid on the grounds of lack of novelty (claims 1 to 3), lack of inventive step (claims 1 to 3), lack of clarity (claim 3) and lack of full description (of the determination of pH values).

In that decision I allowed the parties 4 weeks to file submissions in relation to costs.  All parties have now filed submissions on the issue of costs.

SUBMISSIONS

Professor Young’s submissions were as follows:

“We believe that, in relation to the substantive part of the Opposition, costs should follow the event and we therefore expect that cost, will be awarded against the Applicant.

However, in relation to the issue of bone meal, we believe, that costs should be borne by each of the respective parties.  We are of this view since it was the Opponents who, in their Evidence-in-Reply, decided to rely upon the obviousness to use bone meal in the molluscicidal formulation and identified for the first time, prior art in relation to the use of calcium as a mollusc attractant.  To counter that new evidence, reliance was made upon the Agricultural Veterinary Chemicals Code Regulation 9 and additional evidence was filed in support of and thereagainst.  We believe that that additional evidence and the cost therefore should not be applied against the Applicant but rather each party should bear its own cost.”

Neudorff’s submissions were as follows:

“We request that costs be awarded against the applicant in respect of the Opposition by Neudorff GmbH KG in accordance with the scale for each of the Parent Opposition 689399 and petty patent 697781.

Further we request that cost for the hearing be awarded against the applicant in this matter for two hearing days despite the involvement of a second opponent.

We also request that costs be awarded against the applicant in respect of the further evidence procedure which they initiated only at the hearing.

Neudorff was successful in relation to three substantial grounds of opposition and the evidence presented by Neudorff established invalidity of every claim of the opposed application.

It is office practice that so long as a successful ground of opposition was substantial, costs are awarded against the applicant with no qualifications [Hearings Manual].  This practice should be followed in this case.

Oppositions by each of Neudorff and Yates were heard concurrently however, we request that costs be awarded between the applicant and Neudorff as each opponent prepared and lodged separate evidence and the two sets of evidence in answer were required from the applicant separately addressing each opponents evidence.

Testing Evidence
Much of the evidence of Neudorff was concerned with Section 40 issues and the meaning of pH. Claims 2,3,7,8 and 17 were found to lack clarity. It was held that the specification does not fully describe the invention as it does not enable a person “to determine whether a composition had any pH above 7”. This is a serious defect as the invention is supposedly distinguished from the prior art solely on pH. Furthermore this is a problem of the applicants own making and should have been avoided by providing full description. Poor drafting of the specification is therefore a significant factor and should be taken into account [Re Trigin v American National Can Co. (Application No. 583115) and Johnson Electric Industrial Manufacturing Limited v Mabuchi Motor KK (1996) FSR 93].

The opponent Neudorff was put to considerable trouble and expense in conducting reasonable experiments to attempt to understand the pH limitation which involved conducting measurements using a number of reasonable methods.

Notwithstanding the finding of the hearing officer that claim 1 was fairly based, the opponents position was not unreasonable and the hearing officers decision on this point was not based on the applicants submissions that the examples provide a method of pH calibration.

While the hearing officer has the power to apportion costs between the opponents in the present case, the substantial testing evidence prepared by Neudorff which was a significant factor in the finding, warrants an award of full scale costs against the applicant in at least the opposition by Neudorff GmbH KG.

Priority
Despite the inventors evidence confirming that the feature of pH was first disclosed in the application as filed, the applicants attorney did not withdraw reliance on the priority documents despite being given the opportunity to do so.  This required that submissions be put regarding priority and extended the hearing.

Further evidence
The opposition involved an application for further evidence which was made by the applicant at the hearing with agreement of the opponents.  Further evidence was raised only at the hearing and was confined to the bonemeal issue.

The further evidence related to a government regulation, which it was argued by the applicant, prohibited use of bonemeal with any molluscicide.  It was found that there was no extension of the prohibition in these regulations to molluscicidal baits other than metaldehyde or methiocarb.

We therefore also request that the hearing officer award further costs against the applicant in this matter for the preparation of a reply and written submissions relating to the further evidence.  It is requested that the amount take into account the tasks of receiving and pursuing further evidence and preparation of reply plus two hours at the rate for attendance at a hearing for preparation of written submissions.  The schedule items 8, 9 and 12 reflect the order of costs which we consider reasonable for these additional activities.”

Yates’ submissions were as follows:

“We respectfully submit that these findings relate to substantial patentability issues.  We further submit that the present opponent raised these issues in its Statement of Grounds and Particulars and in its evidence.  We further advise that majority of the present opponent’s evidence was prepared independently of the other opponent.

We respectfully request that in the circumstances of the above matters, the present opponent be given a favourable award of costs.  The present opponent seeks an award in accordance with Schedule 8 of the Patent Regulations.”

DECISION

1.  The relevant law

The power of the Commissioner to award costs is based on section 210 and regulation 22.8.  The power to award costs is discretionary, so I must take into account all relevant considerations.  Relevant considerations include who was successful in the action, whether the successful party was only successful in a minor part of the case (as in IBM v Columbia Ribbon (1970) 40 AOJP 1056 and PPG Industries Inc v Stauffer Chemical Co (1985) 5 IPR 496), was poor drafting of the specification a contributing factor (note Johnson Electric Industrial Manufactory Ltd v Mabuchi Motor Kabushiki Kaisha [1996] FSR 93).

2.  Were the parties successful?

While I found that the oppositions were successful, it is necessary to consider whether each opponent was successful on each ground of opposition.  The ground of novelty was successful in the light of the Puritch patent.  Both opponents referred to the Puritch patent in their statements of grounds and particulars.  However, I found that the Puritch patent only anticipated the invention in so far as it disclosed the use of bone meal, and bone meal was shown to lead to an alkaline pH by the evidence of Bradbury and Carpenter.  The Bradbury and Carpenter declarations were part of the Neudorff evidence in support.  A copy of the Bradbury declaration was attached as Exhibit LRS-5 of the Showyin declaration in support of the Yates opposition.  Clearly Neudorff were successful on the ground of novelty, as they led the evidence that established lack of novelty.  Yates were successful, but through reliance on evidence prepared by Neudorff.

The ground of inventive step was also successful in the light of the Puritch patent, but again it was the bone meal issue that was critical.  For the same reasons, Neudorff and Yates were both successful.

The grounds of clarity and full description were successful on the basis that the specification does not explain how to carry out the pH determination.  The variability of pH with testing method is substantiated by the pH measurements done by the declarants for Neudorff (some of which is reproduced in the Yates evidence).  Both Neudorff and Yates made similar submissions on these matters, and both were successful on these grounds.

3.  Did the opposition succeed on substantial issues?

Both opponents succeeded on the grounds of novelty and inventive step, which are substantial grounds of opposition.

The section 40 matters arose as a result of the specification lacking information about how to carry out the pH determination.  Clearly, the specification was not properly drafted as it omitted this important information.  However, the deficiency is not as acute as in W.R.Grace & Co.-Conn. v American National Can Company [1996] APO 32, where a key feature of the invention was not disclosed at all. I consider the section 40 matters in this case are less substantial than the novelty and inventive step issues.

4.  The further evidence

At the hearing Mr Houlihan took the view that further evidence was needed to answer matters raised for the first time in the evidence in reply.  In my earlier decision I stated that the contested evidence in reply had no impact on the decision.  It follows that the further evidence was not necessitated by the evidence in reply.

The further evidence related solely to the bone meal issue, which was raised by the evidence in support.  It follows that the evidence in reply should not be treated separately when considering costs.

As an observation, the further evidence related predominantly to the Agricultural and Veterinary Chemicals Code Act. This is a piece of law, and as such is not strictly evidence. I suspect that this could have been dealt with by way of submissions at the hearing, in the same way as relevant decisions are dealt with.

What are the costs associated with further evidence?  Schedule 8 contains no item for receiving and perusing further evidence, or preparing responding evidence.  Evidently the costs associated with further evidence are intended to lie with the parties in the normal course of events.  Neudorff submitted that the costs should be items 8 and 9 of the Schedule.  This is implicitly a request to vary the scale of costs in order to accommodate the further evidence.  In W.R.Grace v American National Can, supra, I concluded that the scale of costs can be varied to allow recovery of costs reasonably and properly incurred, if the scale provides inadequate recompense.  The scale of costs assumes that costs decrease as you move through the evidence stages (from evidence in support to evidence in reply).  Further evidence normally follows evidence in reply, and is generally narrowly focussed;  consequently the scale presumes that the costs associated with further evidence are minimal compared to the costs associated with other evidence.  Bearing in mind that the principle of restitutio in integrum does not apply to costs, it needs to be shown that more than a normal amount of work was required in order to establish that the scale is inadequate.  Neudorff have not suggested that there was anything abnormal about the further evidence in this case, so I am satisfied that it is not appropriate to vary the scale of costs.  The costs associated with preparing written submissions in relation to the further evidence are a different matter.  These submissions are a continuation of the substantive hearing.  Neudorff suggested that this was equivalent to two hours attendance at a hearing.  Looking at the written submissions filed in the case, had they been made at the hearing I am sure that no more than one hour would have been required, and costs should be based on this period.

5.  Length of the hearing

The hearing involved concurrently hearing actions on the patent application and the petty patent involving two different opponents.  The hearing of two different opponents might be regarded as doubling the time needed compared to the situation if only one opponent was present.  However, there were considerable efficiencies in that the opponents did not need to elaborate matters already covered by the other opponent, and the applicant was able to respond to both opponents in one submission.  I think that each opposition should be seen as seen as occupying the time taken by the combined hearing.  In addition, an hour associated with the further evidence should be included (as discussed above).

The submissions of the parties were directed solely to the patent application, but were treated as equally applicable to the petty patent.  There was thus no additional time required specifically for dealing with the petty patent.

6.  Conclusion

I turn first to the opposition to the patent application.  Neudorff were successful on substantial grounds, and presented a complete case.  Costs should be awarded in their favour.  Yates were successful on substantial grounds in their opposition to the patent application, but their case depended on evidence copied from the Neudorff opposition.  Since they would not have been successful on the substantive grounds without the Neudorff evidence, the costs should reflect this.  Yates were also successful on the section 40 grounds, so it is not appropriate to view them as wholly unsuccessful.  A reasonable compromise is to make no award of costs in the Yates opposition.

In the matter of patent application 689399, I award costs in accordance with Schedule 8 against Professor Young as specified in the above paragraph.

My conclusion with regard to the petty patent are essentially the same.  Neudorff were successful, and are entitled to costs.  As already noted, no costs for attendance at the hearing are appropriate.  Yates were also successful, but I make no award of costs in relation to their action (for the same reasons as for the patent application).

In the matter of petty patent number 697781, I award costs in accordance with Schedule 8 against Professor Young as specified in the above paragraph.

Dr S.D.Barker
Delegate of the Commissioner of Patents

Patent attorneys for the applicant and petty patentee  :  Callinan Lawrie, Melbourne

Patent attorneys for Neudorff  :  Phillips Ormonde & Fitzpatrick, Melbourne

Patent attorneys for Yates  :  F.B.Rice & Co, Melbourne