CQMS Pty Ltd v Esco Corporation - [2018] APO 32

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
CQMS Pty Ltd v Esco Corporation [2018] APO 32

Patent Application: 2013200095

Title:Wear assembly

Patent Applicant:                   Esco Corporation
Opponent:  CQMS Pty Ltd
Delegate:  R Subbarayan
Decision Date:  17 May 2018
Hearing Date:  28 February 2018, in Melbourne

Catchwords:  PATENTS – section 104 opposition – whether failure to overcome adverse findings in s59 decision within time period set out in that decision leads to application being in a state of refusal – whether the amendments are for the purpose of clerical error – opposition is unsuccessful – costs awarded

Representation: Counsel for the applicant: Tom Cordiner SC
Patent attorney for the applicant: Wayne McMaster and
Rebecca Dutkowski of Minter Ellison
Patent attorney for the opponent: Fisher Adams Kelly Callinans

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2013200095

Title:Wear assembly

Patent Applicant: Esco Corporation
Date of Decision: 17 May 2018
DECISION
The proposed amendment of 14 March 2017 is for the purpose of correcting a clerical error. I therefore direct that this amendment request be allowed and the amendment therein incorporated into the specification. I award costs according to Schedule 8 against the opponent CQMS Pty Ltd.
REASONS FOR DECISION
BACKGROUND

Patent application 2013200095 in the name of Esco Corporation (ESCO) was filed on 8 January 2013. A request for examination was filed on 22 March 2013. Following examination, the application was accepted and the notice of acceptance was advertised on 2 October 2014. The grant of a patent was opposed by two parties, namely CQMS Pty Ltd (CQMS) and Caterpillar Inc. (Caterpillar). Both oppositions were heard together on 9 August 2016 and the written decision of the delegate of the Commissioner was issued on 19 December 2016 (the s59 Decision). In the s59 Decision, the delegate found that claims 7 to 10 were not novel and allowed ESCO a period of two months from the date of the Decision to propose amendments to overcome this adverse finding.
On 7 February 2017, ESCO filed, under section 104 of the Patents Act 1990 (the Act), a request to amend the patent specification along with a statement of proposed amendments (Amendment #1). The Commissioner invited comments from both opponents before deciding whether the proposed amendments were allowable.
On 24 February 2017, CQMS filed their comments explaining why the proposed amendments were not allowable.
Caterpillar did not file any comments.
On 28 February 2017, ESCO had a telephone discussion with the Patent Opposition team of IP Australia (the Office) in which ESCO stated that on review of CQMS’s comments, it had come to their attention that there was a typographical error in the proposed amendments of Amendment #1 and that they wished to correct it. ESCO was requested by the Patent Opposition team not to immediately file any correction to Amendment #1, but to instead wait and file it in response to an adverse examination report from the Office.
The Office did not issue any adverse examination report, but instead on 9 March 2017, advised ESCO that Amendment #1 had been found to be allowable and that this would be advertised for opposition purposes on 23 March 2017.
On 14 March 2017, ESCO filed a further statement of proposed amendments (Amendment #2) to correct the typographical error as no adverse examination report had been issued in respect of Amendment #1.
On 5 April 2017, CQMS filed comments in relation to Amendment #2 explaining why, in their view, Amendment #2 was not allowable.
On 19 April 2017, ESCO responded to the comments from CQMS arguing that Amendment #2 is to overcome a clerical error in preparing Amendment #1 and that Amendment #2 is therefore allowable.
On 24 April 2017, the Office advised the parties that the proposed amendments of Amendment #2 had been found to be allowable and that this would be advertised for opposition purposes on 4 May 2017.
On 4 July 2017, CQMS filed a notice of opposition to the allowance of Amendment #2.
On 12 July 2017, Amendment #1 was allowed and the amendments therein incorporated into the specification.
On 4 August 2017, CQMS filed its Statement of Grounds and Particulars (SGP).
On 9 August 2017, the Office wrote to the parties acknowledging the receipt of the SGP and asking them to indicate if they wished to file any evidence in relation to the s104 opposition.
On 15 August 2017, CQMS advised that they did not intend to file any evidence but if ESCO filed any evidence they reserve their right to file evidence in reply thereto.
On 15 August 2017, ESCO filed their evidence comprising a Statutory Declaration that sets out the circumstances that led to the alleged clerical error in Amendment #1 which is now being sought to be addressed through Amendment #2.
The s104 opposition was heard on 28 February 2018. Although CQMS initially advised that they would appear in person, they subsequently decided to appear through written submissions. Their written submissions were filed on 14 February 2018.
ESCO filed their written submissions for the hearing on 21 February 2018.
SPECIFICATION
The invention pertains to wear members that are commonly attached to excavating equipment, such as excavating buckets, to protect the equipment from wear and to enhance the digging operation.
The wear members are typically elongate with an excavating tooth or point at a front end and a socket at a rear end. The socket is fitted over a nose of a base on the excavating bucket and releasably secured thereto with a locking member that is inserted into aligned apertures in the socket and base.
While the specification describes a number of aspects of the invention, the claimed invention primarily relates to the configuration and geometry of the interface between the socket and the nose, including the provision of various stabilizing surfaces. The configuration of the interface is best shown in figures 3, 9 and 14 that are reproduced below with figure 9 showing a front view of the base and figure 14 showing a rear view of the wear member.
Wear assembly 10 includes a wear member 12 and a base 15 that is fixed to the lip of an excavator bucket. The wear member has a rearwardly opening socket 16 that is adapted to fit on a nose 14 of the base and secured thereto by a locking member. The socket 16 has a shape that corresponds to that of the nose. It includes a generally triangularly shaped front end 48 having a lower stabilizing surface 52 and a pair of transversely inclined upper stabilizing surfaces 54 each of which extends substantially parallel to the longitudinal axis of the wear assembly. The socket then transitions into a six-faceted main portion comprising upper facet 64, a pair of transversely inclined side facets 66, lower facet 68, and a pair of transversely inclined side facets 70. Side facets 70 define rear stabilizing surfaces and extend substantially parallel to the longitudinal axis. Facets 52, 54, 64, 66, 68 and 70 correspond to facets 22, 24, 34, 36, 38 and 40 on the nose.
The specification ends with 11 claims all of which are primarily directed to the geometry of stabilizing surfaces. Some of the claims in addition define the arrangement of the locking member. Claim 7 which was found to be not novel is as follows:
A wear member for attachment to excavating equipment comprising a socket to receive a base fixed to the excavating equipment, the socket having a front portion, a rear portion and a longitudinal axis, the front portion of the socket including a plurality of front stabilizing surfaces, the rear portion of the socket including a plurality of rear stabilizing surfaces, each of the front and rear stabilizing surfaces axially extending at an angle of no more than about seven degrees to the longitudinal axis to bear against a complementary surface on the base, wherein two of said front stabilizing surfaces face downward and are transversely angled to each other to resist both vertical and horizontal loading, and two of said rear stabilizing surfaces face upward and are transversely angled to each other to resist both vertical and horizontal loading.
Amendment #1
Amendment #1 includes amendments to paragraph [06] of the description and claim 7 and also introduces new claim 12. Only the amendment to claim 7 is relevant for the purposes of this decision.
The amendment to claim 7 seeks to narrow the scope of the claim by introducing a further limitation regarding a front surface on the socket that is adapted to bear against a front surface on the base. Amended claim 7 is reproduced below with the underlining indicating additions to the claim.
A wear member for attachment to excavating equipment comprising a socket to receive a base fixed to the excavating equipment, the socket having a front portion, a rear portion and a longitudinal axis, the front portion of the socket including a plurality of front stabilizing surfaces, the rear portion of the socket including a front surface to bear against a front surface on the base and a plurality of rear stabilizing surfaces, each of the front and rear stabilizing surfaces axially extending at an angle of no more than about seven degrees to the longitudinal axis to bear against a complementary surface on the base, wherein two of said front stabilizing surfaces face downward and are transversely angled to each other to resist both vertical and horizontal loading, and two of said rear stabilizing surfaces face upward and are transversely angled to each other to resist both vertical and horizontal loading.
Amendment #2
The proposed amendment in Amendment #2 seeks to correct a typographical error in claim 7. Proposed amended claim 7 is reproduced below with the underlining indicating additions and the strikethrough indicating deletions to the claim as proposed in Amendment #1.
7. A wear member for attachment to excavating equipment comprising a socket to receive a base fixed to the excavating equipment, the socket having a front portion, a rear portion and a longitudinal axis, the front portion of the socket including a front surface to bear against a front surface on the base and a plurality of front stabilizing surfaces, the rear portion of the socket including ~~a front surface to bear against a front surface on the base and~~ a plurality of rear stabilizing surfaces, each of the front and rear stabilizing surfaces axially extending at an angle of no more than about seven degrees to the longitudinal axis to bear against a complementary surface on the base, wherein two of said front stabilizing surfaces face downward and are transversely angled to each other to resist both vertical and horizontal loading, and two of said rear stabilizing surfaces face upward and are transversely angled to each other to resist both vertical and horizontal loading.
The proposed amendment basically seeks to change the location of the newly introduced further limitation of “a front surface to bear against a front surface on the base” of Amendment #1 to a different location within the claim.
THE GROUNDS OF OPPOSITION
CQMS has opposed the allowance of Amendment #2 on the grounds that the amendment is not an allowable amendment pursuant to paragraph 102(2)(a) of the Act.
APPLICABLE LAW
The request for examination of the patent application was filed before 15 April 2013 and as a consequence the substantive amendments of the Act brought about by the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 do not apply to the present application. Instead, the relevant provisions of the Act in this matter are subsection 102(2) and 102(3) as they existed prior to the introduction of the ‘Raising the Bar’ Act, which are set out below:
(2)An amendment of a complete specification is not allowable after the relevant time if, as a result of the amendment:
(a) a claim of the specification would not in substance fall within the scope of the claims of the specification before amendment; or
(b) the specification would not comply with subsection 40(2) or (3).
(3) This section does not apply to an amendment for the purpose of correcting a clerical error or an obvious mistake made in, or in relation to, a complete specification.
The ‘relevant time’ for the purpose of s 102(2) is after the specification has been accepted.
CQMS’s SUBMISSIONS
CQMS submitted that Amendment #2 is not allowable under subsection 102(2)(a) under two fronts.
1) Opposed application had ceased to exist
CQMS has argued that at the time Amendment #2 was proposed, the opposed application had ceased to exist for the following reasons:
·In the s59 Decision the Delegate had allowed the applicant two months from the date of the decision (i.e. until 19 February 2017) to propose amendments to overcome the adverse findings.
·The clear implication of this direction was that the time permitted for the Applicant to propose amendments to remove all grounds of invalidity ended on 19 February 2017.
·Although Amendment #1 was filed before this deadline set by the Delegate, this amendment was deficient as explained in their letter of 24 February 2017.
·Accordingly as at the Delegate's deadline and since that date, the Opposed Application was in a state suitable only for refusal, that being a state where the only possible further development on the application is refusal.
·It is well established that where the Commissioner has refused an application, that application is properly regarded as not subsisting, and the Commissioner is therefore unable to deal with any request to amend it.
·Even if the Opposed Application can still properly be regarded as subsisting following the Delegate's deadline, the fact remains that the time allowed by the Delegate for the Applicant to propose amendments removing all grounds of invalidity from the Opposed Application ended on the Delegate's deadline. As reasoned in their letter of 24 February 2017, Amendment #1 does not overcome the lack of novelty findings of the Delegate and on that basis at least claim 7 still remained invalid. The only claims subsisting are claims 1-6.
·As Amendment #2 was requested after the Delegate's deadline and affects claims 7 to 10 it is directed to claims that are no longer subsisting.
·Also proposed new claim 7 in Amendment #2 does not fall within the scope of claims 1-6 which are the only subsisting claims.
I fail to understand the basis for the aforementioned submissions of CQMS.
The Act does not provide any restriction on when amendments may be made to a complete specification, the only limitations being in relation to the nature of the amendments as specified in the allowability provisions of s102.
It is the practice of the Commissioner that where certain grounds of invalidity have been established but where these could be overcome by amendment, rather than refuse the application outright, an opportunity will be afforded to the applicant to propose amendments within a short period of time after the Hearing decision is issued in order to overcome the established grounds of invalidity. While this period of time is often a period of two months from the date of the decision, this is not a period that is specified in the Act and nor is it a deadline that is set in concrete. This is a period that the delegate considers is appropriate in the circumstances taking into account amongst other things the nature of the adverse findings, the complexity of the issues involved, the interest of the parties and the public interest. Furthermore this period of time may be extended if the applicant can demonstrate that they are being diligent in proposing amendments that overcome the adverse findings in the decision. Consequently it also follows that any failure to propose amendments within the specified period that overcome all of the adverse findings cannot lead to the application being in a state of refusal where it does not effectively subsist.
In the present case, ESCO filed Amendment #1 within the period specified in the s59 Decision. These amendments were found to be allowable despite reasoned submissions from CQMS that the amendments were not allowable. ESCO realised from CQMS’s submissions that there was a typographical error in Amendment #1 and they were keen to rectify this as evidenced from their telephone discussion with the Patent Opposition team on 28 February 2017. However Amendment #1 was allowed without any adverse findings. ESCO therefore filed Amendment #2 in order to fix the error in Amendment #1.
There is nothing to suggest that ESCO has not been diligent in proposing amendments to overcome the adverse findings in the s59 Decision.
This line of attack on the allowability of Amendment #2 therefore fails.
2) Proposed amendments do not fall within the scope of the amendments before amendment
CQMS submitted that if the first reason is not accepted and the application subsists, then claim 7 as proposed to be amended by Amendment #2 would not fall within the scope of claim 7 as amended by Amendment #1 and Amendment #2 would therefore not be allowable under the provisions of s102(2)(a).
ESCO accepted that proposed amended claim 7 would not fall within the scope of claim 7 before amendment, but submitted that is irrelevant as Amendment #2 is to correct a clerical error and that therefore the requirements of s102(2)(a) do not apply.
I will therefore first need to decide whether Amendment #2 is for the purposes of correcting a clerical error.
Is Amendment #2 for the purposes of correcting a clerical error
Amendment #2 was filed on 14 March 2017. The cover letter that accompanied the request to amend states as follows:
“On review of CQMS's comments, it has come to our attention that there was a typographical error in our 7 February amendment. Specifically, the phrase "a front surface to bear against a front surface on the base and" was inserted after the words "the rear portion of the socket including" rather than after the words "the front portion of the socket including".
In a telephone conversation with the Patent Opposition team on 28 February 2017, this error was brought to IP Australia's attention. We were requested that we not file the correction at that time but instead wait and file it in response to an examination report. However, as no examination report has been issued, we enclose herewith a Statement of Proposed Amendments which corrects this error”. (my underlining)
The sole proposed amendment in Amendment #2 is to amend claim 7 in the manner that I have indicated earlier.
Although CQMS provided comments in relation to Amendment #2 in their letter of 5 April 2017, they did not address in that letter the issue of whether the amendments were allowable as a clerical error.
ESCO in their letter of 19 April 2017 again highlighted that the purpose of Amendment #2 is to correct a typographical error during the preparation of Amendment #1. They have stated as follows:
“ESCO's amendment of 15 March 2017 was filed and is being considered under section 104 of the Act. Section 104 provides that a patent applicant may ask the Commissioner for leave to amend a complete specification for the purpose of, among other things, removing a lawful ground of objection or correcting a clerical error or an obvious mistake. As set out in the letter accompanying the above amendment, this amendment was necessitated by a typographical error in the original amendment filed on 7 February 2017 and the absence of an examination report by IP Australia”. (my underlining)
On 21 April 2017, the examiner found that Amendment #2 was allowable and granted leave to amend. It is however unclear whether the examiner found that the amendment was allowable on the basis that it was for the purpose of correcting a clerical error and/or that the amendment was allowable under the provisions of s102(2)(a). However that does not alter the fact that Amendment #2 was found to be allowable and this is being opposed by CQMS.

As CQMS’s earlier submissions/comments in relation to Amendment #2 did not address the issue of whether the proposed amendment could be considered to be for the purposes of correcting a clerical error, I wrote to the parties prior to the hearing inviting submissions specifically on this issue. However CQMS did not provide any such submissions before the hearing.
The leading authority on clerical error is R v Commissioner of Patents; Ex parte Martin (1953) 89 CLR 381. Fullagar J at 406 stated that
“the characteristic of a clerical error is not that it is in itself trivial or unimportant, but that it arises in the mechanical process of writing or transcribing”.
Williams ACJ at 395 put it slightly differently:
“A clerical error, I would think, occurs where a person either of his own volition or under the instructions of another intends to write something and by inadvertence either omits to write it or writes something different”.
As I noted earlier, ESCO’s evidence for these proceedings comprises a Statutory Declaration from Ms Rebecca Dutkowski, a solicitor employed at MinterEllison, which sets out the circumstances that led to the alleged clerical error. These circumstances can be summarised as follows:
·On 4 February 2017, Ms Dutkowski received an email from Mr Steve Schad, Assistant General Counsel of ESCO proposing the following amendment to claim 7 in order to overcome the lack of novelty finding in the s59 Decision:
7. A wear member for attachment to excavating equipment comprising a socket to receive
a base fixed to the excavating equipment, the socket having a front portion, a rear portion
and a longitudinal axis, the front portion of the socket including a front surface to bear
against a front surface on the base and a plurality of front stabilizing surfaces, the rear
portion of the socket including a plurality of rear stabilizing surfaces, each of the front and
rear stabilizing surfaces axially extending at an angle of no more than about seven
degrees to the longitudinal axis to bear against a complementary surface on the base,
wherein two of said front stabilizing surfaces face downward and are transversely angled
to each other to resist both vertical and horizontal loading, and two of said rear stabilizing
surfaces face upward and are transversely angled to each other to resist both vertical and
horizontal loading.
·On 7 February 2017, Ms Dutkowski prepared a proposed amendment to the claims (Amendment #1) which was then filed with IP Australia. In addition to amending claim 7, this amendment also proposed to amend claim 9, add new claim 12 and amend paragraph [06] of the description.
·On 24 February 2017, MinterEllison received a copy of the letter of the same date filed with IP Australia by CQMS in relation to Amendment #1.
·On reviewing this letter on 27 February 2017, Ms Dutkowski realised that in the amendment to Claim 7 in Amendment #1, she had mistakenly placed the phrase "a front surface to bear against a front surface on the base and" after the words "the rear portion of the socket including", rather than after the words "the front portion of the socket including" as she had been instructed by Mr Schad.
·On 28 February 2017, she rang IP Australia to discuss this error when she was advised to file any amendment to claim 7 in response to an examination report.
·However Amendment #1 was found to be allowable by Office and hence no examination report issued.
·On 14 March 2017, Ms Dutkowski prepared and filed Amendment #2 in order to rectify the error in claim 7 of Amendment #1.
It is clear from the above declared facts that Ms Dutkowski made an error in transcribing the instructions from Mr Schad in preparing Amendment #1. In my view this error in transcription sits comfortably within the meaning of a ‘clerical error’ as set out in the authorities I have referred to.
The amendment proposed in Amendment #2 is clearly to amend claim 7 to accord with the instructions from Mr Schad. This is also made clear in the correspondences dated 14 March 2017 and 19 April 2017, where there are references to the purpose of the amendment being to correct a typographical error in Amendment #1.
I am therefore satisfied that Amendment #2 is for the purpose of correcting a clerical error. I therefore direct that Amendment #2 be allowed and the amendments therein incorporated into the specification.
As the allowability requirements of s102(2)(a) do not apply where the amendment is for the purpose of correcting a clerical error, I do not need to decide whether as a consequence of Amendment #2, claim 7 would or would not fall within the scope of claim 7 before amendment.
OTHER ISSUES
CQMS have in their various correspondences in relation to Amendment #1 and Amendment #2 provided submissions as to why in their view, the amendments to claim 7 would still not overcome the lack of novelty finding in the s59 Decision. However that is a matter for consideration during the final determination of the s59 opposition and is of no relevance to the present s104 opposition.
CONCLUSION
I find that the amendment request of 14 March 2017 is for the purpose of correcting a clerical error. I therefore direct that this amendment request be allowed and the amendments therein incorporated into the specification.
COSTS
The opposition has been unsuccessful. I see no reason to depart from the normal practice of awarding costs following the event. I therefore award costs according to Schedule 8 against the opponent CQMS Pty Ltd.
R Subbarayan
Delegate of the Commissioner of Patents