CQMS Pty Ltd v ESCO Corporation
[2013] APO 37
•14 June 2013
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
CQMS Pty Ltd v ESCO Corporation 2013 APO 37
Patent Application: 2007241122
Title:Wear Assembly
Patent Applicant: ESCO Corporation
Opponent: CQMS Pty Ltd
Delegate: Dr S. D. Barker
Decision Date: 14 June 2013
Hearing Date: Written submissions filed on 16, 17 and 24 May 2013
Catchwords: PATENTS – extension of time to file evidence in support – multiple opposition proceedings occurring – inadequate explanation of delay – nature and significance of evidence favours extension – extension allowed – no award of costs
Representation: Patent applicant: King & Wood Mallesons
Opponent: Fisher Adams Kelly
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2007241122
Title:Wear Assembly
Patent Applicant: ESCO Corporation
Date of Decision: 14 June 2013
DECISION
The time for filing evidence in reply is extended to 12 July 2013.
No award of costs.
REASONS FOR DECISION
This matter relates to patent application 2007241122 in the name of ESCO Corporation (ESCO). The application was advertised as accepted on 13 October 2011 and a notice of opposition to the grant of a patent was filed by CQMS Pty Ltd (CQMS) on 13 January 2012.
CQMS filed its Statement of Grounds and Particulars on 12 April 2012 and thereafter filed partial evidence in support on 12 July 2012 consisting of a statutory declaration by Adam Luxton dated 12 July 2012 with exhibits AL-1 to AL-10. CQMS has since received three extensions of time to complete its evidence in support (taking the due date to 12 April 2013). On 12 April 2013 CQMS filed a request for a three month extension of time to file its evidence in support, which was subsequently objected to by ESCO and is the subject of this decision.
A hearing was conducted by written submissions. Submissions by ESCO were received on 16 May 2013. Submissions by CQMS were received on 17 May 2013. Submissions in response were received were received on 24 May 2013. ESCO was represented by King & Wood Mallesons. CQMS was represented by Fisher Adams Kelly.
The relevant law
As a consequence of the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 there are substantial changes to Chapter 5 of the Patents Regulations 1991. In the case of the present application and the present extension of time, the extension is governed by reg. 5.10 as in force immediately before 15 April 2013. One relevant consequence of the amendments to Chapter 5 is that evidence that is required to be served on or after 15 April 2013 is to be filed with the Commissioner rather than served. Consequently in this decision I will make reference to the filing of evidence where that is to happen on or after 15 April 2013.
Regulation 5.10(2) of the Patents Regulations gives the Commissioner the power to extend the time for filing evidence in support. The Commissioner must not grant an extension unless satisfied that the parties have been notified of the application for extension (reg. 5.10(5) (b)), has given the parties a reasonable opportunity to be heard (reg. 5.10(5)(c)(i)), and is reasonably satisfied the extension is appropriate (reg. 5.10(5)(c)(ii)). In the present case the parties have been notified and have had an opportunity to be heard. The only remaining question is whether it is appropriate to extend the time.
The considerations relevant to this question have been considered several times by the Federal Court (Ferocem Pty Ltd v Commissioner of Patents [1994] FCA 981; 28 IPR 243, A Goninan & Co Ltd v Commissioner of Patents [1997] FCA 424; 38 IPR 213 and National Starch & Chemical Co v Commissioner of Patents [2001] FCA 33; 50 IPR 398). In summary, the power to extend time is discretionary, so it is necessary to give genuine and proper consideration to all relevant considerations. (Ferocem at 247-8, Goninan at 220). Relevant considerations include:
a.the reason why the evidence was not filed earlier (Ferocem at 247);
b.the public interest in determining a serious opposition on its merits (Goninan at 222); and
c.the interests of the parties (Ferocem at 247)
Explanation of delay in filing evidence
In its request for the extension of time CQMS provided the following explanation of delay:
"As mentioned in the previous application for an extension of time to complete its evidence, the Opponent has engaged an expert to provide evidence in this opposition. That expert is Dr John De Wit.
Dr De Wit is providing evidence in a large number of opposition proceedings, and together with his extensive work commitments, the time required of him to provide evidence in those other opposition proceedings has weighed heavily on his schedule.
Given the relatively earlier stage of this opposition, the Opponent has not as yet provided Dr De Wit with instructions."
Further time is required for CQMS to instruct Dr De Wit and have Dr De Wit perform the tasks required of him.
"As [sic] serious opposition is foreshadowed. The Opponent and the Applicant are in competition in the relevant field and there is a history of litigation between the parties. In those circumstances, Opponent (sic) respectfully submits that an extension of three months in order to allow it to complete its Evidence in Support is appropriate."
CQMS expanded on those reasons in its submissions (at paragraphs 4-7):
"the Applicant and the Opponent are involved in eighteen separate opposition proceedings. Of those, CQMS Pty Ltd is the Opponent in fourteen matters and Esco Corporation is the Opponent in three matters.
Those matters are all at different evidentiary stages. The Opponent has stated in the Relevant Application that ‘given the relatively early stage of this opposition, the Opponent has not yet provided Dr De Wit with instructions’.
Dr De Wit has been engaged more recently with the preparation of Evidence in Reply in the Opponent’s opposition to Australian Patent Application 2007202390 which is in the name of the Applicant.
That opposition proceeding has been given priority because it has been on foot for longer than the present proceeding."
In its request for an earlier extension of time dated 12 July 2012 CQMS explained:
"The Opponent has identified an expert but requires further time to brief that expert and have that expert perform the actions requested of him."
That expert was apparently Dr De Wit. Accordingly CQMS, having apparently identified a relevant expert before 12 July 2012, had not briefed him as of 12 April 2013. Having 18 Australian opposition proceedings on foot may of course represent a burden to a party that would cause some reasonable delay at certain points in time. That does not however allow a party to shelve progress on a particular opposition for months or years at a time until other oppositions are heard and decided. On the contrary, it is reasonable for an opponent to allocate resources such that efficient progress is made on each opposition.
CQMS cites the relatively early stage of the present opposition in comparison to other oppositions they are involved in. Whilst the evidence in support evidentiary period represents an early stage of the opposition, the most recent request for an extension of time is 12 months into that period. The fact that the opposition may be at an early stage does not provide a proper explanation for not commencing the preparation of evidence.
CQMS notes that Dr De Wit is currently engaged in preparation of evidence in reply for application 2007202390. That evidentiary period began on 20 December 2012. It has not been made explicit what matter Dr De Wit was engaged in prior to this time and why he was not briefed in the period beginning before 12 July 2012 to 20 December 2012. Be that as it may, I will accept that Dr De Wit’s involvement in “a large number of opposition proceedings” and his responsibilities as a working engineer may explain his lack of availability. However, CQMS does not suggest that Dr De Wit is the only suitable witness in these matters. They state in their submissions:
"In the event that it proves that Dr De Wit’s schedule does not allow for completion of his evidence within the extended period applied for in the Relevant Application, the Opponent will take alternative steps to adduce evidence on novelty by the extended deadline of 12 July 2013."
That being the case, it is clear to me that there were alternative steps that could have been taken at an earlier time. CQMS have made a decision to give the present opposition a lower priority than other oppositions that it is involved in. The retention of Dr De Wit where alternative means of providing evidence was available and where it was readily apparent he would be unavailable to provide evidence for months to years into the future presents an insufficient explanation of the present delay.
The public interest
In its request for the extension of time the CQMS noted:
"A serious opposition is foreshadowed. The Opponent and the Applicant are in competition in the relevant field and there is a history of litigation between the parties."
If I may observe as an aside: it is not clear to me why a history of litigation in several matters, as opposed to a once-off action between the parties, would of itself be evidence that a serious opposition based on the particular facts of the opposition is intended. The public interest is determined by considering the nature and significance of the evidence that is being prepared. CQMS indicated that “[i]t is intended that the evidence of Dr De Wit will go to issues of novelty and inventive step.”
The vague nature of this explanation is perhaps necessitated by the opponent not yet having briefed Dr De Wit. Nevertheless, the statement of grounds and particulars and the partial evidence in support previously filed on 12 July 2012 support this indication. It is apparent that CQMS relies upon documents D1-D10 to allege a lack of novelty and inventive step for each claim of the opposed application. The proposed evidence will likely go to the proper construction of the specification and prior art, and the common general knowledge of the art, and thus is likely to be highly relevant to the present opposition. I am satisfied that the public interest rests on the side of allowing the extension.
Interests of the parties
As is normal in such matters, the interests of the parties are opposed and offsetting.
Conclusion
The balance of considerations in this case is quite fine. While the public interest favours the extension, I am not satisfied that there is a reasonable explanation of the delay. The interests of the parties do not alter the balance. I favour allowing the extension, but I do not consider that it would be appropriate to continue waiting for Dr De Wit. If Dr De Wit is unable to promptly commence work on a declaration I would expect CQMS to engage an alternate expert. Any further extensions based on the unavailability of Dr De Wit are unlikely to be granted.
An observation
Where an opponent is involved in a large number of concurrent oppositions, it is necessary to make arrangements so that the preparation of evidence in each opposition is able to proceed at a reasonable pace. It is not sensible to engage a single expert to prepare evidence in all of the matters IF that causes an unreasonable delay in the preparation of evidence. Regardless of the significance of the evidence, there will come a point at which an extension of time will not be appropriate if the opponent has adopted a strategy which is inherently slow and has the effect of parking an opposition indefinitely.
Costs
It is normal for costs to follow the event, but this is not a rule that is applied inflexibly. In this case, the considerations are so finely balanced that it was reasonable for an objection to be raised. ESCO was justified in objecting to the extension, and the award of costs should not penalise them. I have considered whether to reverse the award of costs given that the strategy for evidence preparation adopted by CQMS was always going to cause significant delay. In the present case I believe it is appropriate to make no award of costs.
Dr S.D.Barker
Delegate of the Commissioner of Patents
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