CQMS Pty Ltd v ESCO Group LLC
[2023] APO 29
•11 May 2023
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
CQMS Pty Ltd v ESCO Group LLC [2023] APO 29
Patent Application: 2018201726
Title:Wear part monitoring
Patent Applicant: ESCO Group LLC
Opponent:CQMS Pty Ltd
Delegate:Dr W.E. Guinea
Decision Date: 11 May 2023
Hearing Date: 1 December 2021, by written submissions
Catchwords: PATENTS – evidence in reply – whether evidence in reply properly in reply – no evidence in reply clearly not properly in reply – costs awarded against Applicant
Representation: Counsel for the applicant: Tom Cordiner KC
Patent Attorney for the applicant: MinterEllison
Patent Attorney for the opponent: James & Wells
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2018201726
Title:Wear part monitoring
Patent Applicant: ESCO Group LLC
Date of Decision: 11 May 2023
DECISION
I am not satisfied that any of the evidence in reply challenged by the Applicant is not properly in reply to the evidence in answer.
I award costs against the Applicant, ESCO Group LLC, according to Schedule 8 of the Regulations.
REASONS FOR DECISION
Background
Patent application 2018201726 (the “application”) was filed on 9 March 2018 in the name of ESCO Corporation. By virtue of a request filed under s113 on 12 September 2018, the Applicant of record became ESCO Group LLC (the “Applicant”). By virtue of its divisional status to 2014262221, the application has an earliest priority date of 25 November 2013.
The application is a member of a broadly similar group of applications subject to opposition proceedings and challenges to evidence in reply (“EIR”) in the context of the same. Details concerning these applications can be found at annex A to CQMS Pty Ltd v ESCO Group LLC [2023] APO 16.
Examination was requested at filing. A first examination report issued on 15 May 2019, with the application being subsequently accepted on 13 January 2020. The application was advertised as accepted on 30 January 2020.
On 30 April 2020, CQMS Pty Ltd (the “Opponent”) filed a notice of opposition to the grant of the application under s59 of the Act (the “s59 opposition”). A statement of grounds and particulars (“s59 SGP”) was filed on 30 July 2020, with evidence in support (“EIS”) being completed on 1 February 2021. Evidence in answer (“EIA”) was completed on 3 May 2021, with EIR completed on 23 June 2021.
The evidence is summarised in the table below, with shorthand references provided in bold.
| EIS | EIA | EIR |
| A declaration by Dr Nicholas Simon Hillier dated 1 February 2021 (Hillier), with supporting exhibits NH-1 to NH-3. | A declaration by Mr Hezekiah Russell Holland dated 1 May 2021 (Holland). | A declaration by Dr Nicholas Simon Hillier dated 23 June 2021 (Hillier2)with supporting exhibits NH-4 to NH-6. |
On 19 July 2021, the Applicant informed the Commissioner that it considered the EIR was not properly in reply to the EIA. A Delegate considered the matter, and on 14 September 2021, informed the parties that they were of the view that certain items of the EIR were not properly in reply, and intended to direct that these items were not in evidence, with this direction being made on 13 October 2021. On 28 September 2021, the Applicant formally objected to the Delegate’s position in not directing all the impugned EIR from the evidence and requested to be heard in connection with those paragraphs not struck from the evidence.
Subsequently the matter was set for hearing by written submissions. The Applicant filed submissions in support (“SIS”) on 4 November 2021. The Opponent filed submissions in answer (“SIA”) on 24 November 2021. The Applicant then filed submissions in reply (“SIR”) on 1 December 2021, meaning that the matter is now ready to be decided.
The Challenge to the EIR
Based on the SIS at [1], the particular passages of Hillier2 challenged by the Applicant are as follows: [9], [11], [39], [52] and [54] to [60].
The Law
Principles regarding the nature of EIR in matters before the Commissioner are well established and were outlined in Merial Limited v Bayer Intellectual Property GmbH [2015] APO 16 at [3]:
“It is well established that evidence in reply is restricted to evidence rebutting the applicant's evidence in answer. Evidence that merely bolsters the evidence in support or opens up new matters that should have been raised in evidence in support is not in reply (see Sonus Pharmaceuticals, Inc v Alliance Pharmaceutical Corp and Schering Aktiengesellschaft [2001] APO 13 (the Sonus decision)).”
10. It is perhaps worthwhile to quote some of the principles from Sonus as alluded to by the Delegate in Merial:
“Evidence in reply is clearly distinguished from evidence in support. Phipson on the Law of Evidence states that evidence in reply must be confined to rebutting the applicant’s case, and should not merely confirm the case in chief. Additionally, evidence in reply cannot raise matters that should have been raised in the evidence in support. This was emphasised by Graham J in Ernest Scragg & Sons Ltd’s Application [1972] FSR 219 at 223:
‘To my mind it is quite wrong in these cases that there should be any sort of skirmishing in regard to evidence, and if an opponent has a case he should straight away state what his case is and should put in declarations dealing with any evidence which he thinks may be relevant to that case. The applicant can then deal with the matter in the normal way, and a lot of time is saved, and the Office can get on with deciding the case. If the opponent does not do that and waits until he sees what the applicant says, then obvious difficulties will result and oppositions will inevitably be drawn out and never finished.’…
While this case was referring to the Patents Act in the United Kingdom, the principles are equally relevant to the present Australian Patents Act.
I note that there have been several decisions of the Commissioner that illustrate other principles of further evidence:
Optech International Ltd v Buxton Hicarium Ltd (1993) 28 IPR 649 [“Optech”]: evidence provided in an attempt to rectify deficiencies in the evidence in support is not evidence in reply.
Inax Corp v Caroma Industries Ltd [1994] APO 48: evidence that had no link to statements or opinions in the evidence in answer was not evidence in reply.
Emory University v Biochem Pharma Inc (1997) 39 IPR 603 [“Emory University”]: matter that should have been raised as evidence in support (because it was an essential part of a ground of opposition) was not properly evidence in reply.
I conclude that in general evidence in reply:
(i)is not evidence that should have been served as evidence in support
(ii)responds to some matter raised by the evidence in answer
(iii)does not merely confirm the evidence in support.”
11. It is also worthwhile repeating the following from Sonus:
“The only time that a final determination of whether the evidence is actually in reply is made is during the substantive hearing of the opposition. However, that does not mean that I cannot form a view of the question, and indeed it is essential for me to do so in order to decide the matter before me. However, it is only possible to form a preliminary view. If there is a reasonable basis for believing that evidence fits the definition of evidence in reply, then I believe that I should treat that evidence as reply evidence at this time unless Sonus can satisfy me that that conclusion is not appropriate. It may be that a different conclusion would be reached after detailed analysis of the declarations, such as during the substantive opposition. It clearly would have been easier to determine these issues as a part of the substantive opposition, but that option is not available. I am required to make a preliminary assessment, and to base my decision on that assessment (sic). I will go through the disputed paragraphs of the evidence in reply in turn.”
12. The above principles regarding EIR are well established, and as I understood it, were prima facie accepted by both parties; see the SIS at [9] and the SIA at [13].
13. Nevertheless, there are several matters of contention between the parties, or issues raised in the submissions, regarding the principles that were apparent in the submissions. These include: whether the EIR is responsive only where it is rebutting the applicant’s case; how the EIR need be directed to the EIA to be properly in reply; whether a liberal approach to the EIR is appropriate; characterisation of the second limb of the test from Sonus; the rules of evidence and how these do not apply to matters before the Commissioner; whether the EIR can “strengthen” an opponent’s case and the nature, conduct and effect of this matter. I note that all these issues were addressed at [14] to [51] of CQMS Pty Ltd v ESCO Group LLC [2023] APO 16, and I refer to my comments there in response to these issues.
Consideration
14. I note that, in line with Sonus, if there is a reasonable basis, at this stage, to consider the EIR as being properly in reply, then I will do so. It is up to the Applicant to satisfy me otherwise. The fact that I may find certain passages from Hillier2 as being not properly in reply does not prevent the delegate deciding the opposition from making the same finding against other passages where I have declined to make that finding here. I will now consider each of the passages of the EIR challenged by the Applicant to determine whether these are not properly in reply to the EIA.
15. I have not specifically addressed arguments relating to each contested passage where I have considered that it is not necessary to do so. This may be, for example, where the reasons why I differ from the views of one party or the other are apparent from the discussion I have provided above. Another example is where the parties’ views are based on principles that extend beyond those in Sonus, for example, arguments about the EIR rebutting the EIA or being responsive to the Applicant’s case, as discussed above. In either case reference may be made to CQMS Pty Ltd v ESCO Group LLC [2023] APO 16 where appropriate.
16. While I have considered each of the contested passages in line with the requirements in Sonus, I have generally restricted explicit discussion to what I consider are the relevant considerations in contest. If not all considerations from Sonus are discussed with regard to a passage I am unable to view as not being properly in reply, it may be taken that I am satisfied that that passage does not offend against those considerations not explicitly discussed.
Paragraph 9
17. In this paragraph Dr Hillier provides comments on the disclosure of the specification and his views at to the emphasis on the sensors being cameras. The Opponent, at [36] of the SIA has pointed to this paragraph being responsive to [11.4] of Holland. Although there is no direct reference at [9] of Hillier2 to Mr Holland’s evidence, Mr Holland clearly discusses at [11.4] the nature of the problem and the disclosure of the specification, including sensors. In this regard I can accept that paragraph [9] of Hillier2 is generally responsive to the EIA. I am not satisfied that this paragraph is not properly in reply to the EIS.
18. At [15(e)] of the SIS and [30] of the SIR, the Applicant suggests that this is not properly in reply as it is the first time Dr Hillier has brought up his views on the emphasis that the sensors are cameras or that this evidence is somehow relevant to grounds of support and should have been brought up earlier. Even if it is the case that this is the first time that these particular views on sensors and cameras have been provided it is not clear to me that this is something that should have been filed as EIS. Similarly, I fail to see how the rather general statement regarding the emphasis on cameras amounts to something fundamental to making out the ground of support.
19. Indeed, the suggestion that this is the first time that Dr Hillier has raised the issue of cameras and sensors would seem to be incorrect. As acknowledged by the Applicant, at [30(f)] of the SIR, Dr Hillier states in NH-1 that “the only kind of sensor which is described in the specification for use in determining wear of a wear part is a visual camera”. While not identical to the statements on “emphasis” at [9] of Hillier2 the conceptual thrust is quite similar.
20. It is also the case that Dr Hillier made quite a few statements regarding the ability to perform the invention for any kind of sensor in the EIS; see for example, the discussion of feature 1.5 in NH-1. This further undermines the Applicant’s contentions about this paragraph being EIS filed out of time.
Paragraph 11
21. In this paragraph Dr Hillier provides comments on the commercial motivation to perform the invention disclosed and his views on this being routine engineering practice. The Opponent, at [58] of the SIA has pointed to this paragraph being responsive to [11.5] of Holland. Although there is no direct reference to Mr Holland’s evidence at [11] of Hillier2, Mr Holland clearly discusses at [11.5] his views on aspects of the EIS that go to placing sensors on buckets being CGK or otherwise. In this regard I can accept that paragraph [11] of Hillier2 is generally responsive to the EIA. I am not satisfied that this paragraph is clearly not properly in reply to the EIS.
22. At [18(c)] of the SIS, the Applicant suggests that this is not properly in reply as it is the first time Dr Hillier has raised the issue of commercial motivation to put line of sight sensors on a bucket. However, even if this is the case, I fail to see how this evidence should have been filed as EIS in terms of being necessary to make out a ground of opposition. It appears more properly to be reply evidence in my view.
23. At [33] of the SIR, the Applicant appears to suggest that Dr Hillier’s EIS regarding the obviousness of placing sensors on a bucket at the priority date was somehow, as best understood, inherently defective, leading to the supply of [11] of Hillier2 to make up that defect and thereby leading to [11] as having the character of EIS. This argument is remarkably contrived. The idea that defects in EIS cannot be ameliorated by EIR extends to the fact that where there is a lack of evidence on a point material to making out a ground of opposition this cannot be fixed by trying to supply that evidence in EIR. That is clearly not the case here, where there is evidence on a factual point in the EIS, and the EIR responds to criticisms of that. Arguments that the evidence on that point is simply wrong or weakly based does not change the character of it as being evidence per se on a factual point. Responding to criticisms in the EIA of a factual point asserted in the EIS is, in my view, precisely one the functions of the EIR.
Paragraph 39
24. In this paragraph, Dr Hillier replicates several paragraphs from his evidence in the opposition to 2014262221, referred to in Hillier2 as the “221 Opposition”. These comprise paragraphs [28] to [41] from Dr Hillier’s first declaration in evidence in support in the 221 Opposition. Paragraph [39] appears to carry on from a discussion at [37] of Hillier2 concerning Mr Holland’s comments at [11.5] of his declaration regarding what Dr Hillier understood as being CGK from his evidence in the 221 Opposition, particularly with respect to whether putting sensors on buckets was CGK at the priority date. Paragraphs [37] to [41] cited from his evidence in the 221 Opposition appear to provide background to, and address issues regarding, the obviousness of placing sensors on buckets as at the priority date. Given Mr Holland’s attempt to generally characterise Dr Hillier’s evidence from the 221 Opposition, without actually quoting or citing any of that evidence in a specific way, as favouring the placement of sensors on a bucket as non-obvious, I am of the view that the reproducing of [37] to [41] in Dr Hillier’s evidence can be reasonably characterised as being in reply to the EIA.
25. Paragraphs [28] to [36] from the 221 Opposition comprise a lengthy exposition on the problems outlined in the specification as well as commentary by Dr Hillier on the same. Mr Holland comments on the background and problems discussed in the specification at [4.3] and [11.4] of his declaration. Consequently, [28] to [36] from the 221 Opposition, as cited at [39] of Hillier2, can be seen as generally responsive to those comments.
26. At [16] of the SIS and [31] of the SIR, the Applicant argues that [39] comprises evidence that should have been provided as EIS. It is true that there is a lengthy citing of passages of the evidence from the 221 Opposition. However, it was Mr Holland that referred to that evidence from the 221 Opposition in an entirely non-specific way to support his contentions on obviousness/CGK regarding the placement of sensors on buckets. In this situation I consider a degree of latitude should be provided to an opponent to make extensive reference to material to refute what, it would be fair to say, it views as a mischaracterisation of the evidence from the 221 Opposition, particularly where the EIA refers to the evidence from the 221 opposition in an entirely general fashion. At the least I am not satisfied that those passages of [39] that deal with the placement of sensors on buckets are clearly not properly in reply to the EIA. Similarly, I am not convinced that the other passages from [39] are something that should have been filed as EIS.
27. The Applicant has also suggested that [39] merely restates Dr Hillier’s opinion that the bucket is an obvious location for a sensor. It of course supports that view, but I fail to see how it is merely restating that view, particularly noting that [39] comprises new evidence.
Paragraph 52
28. This paragraph provides evidence regarding what sensors were commonly mounted on earth working equipment at the priority date. It does not reference any of the EIA directly, but as pointed out by the Opponent at [54] of the SIA, Mr Holland provides evidence, at [5.5] of his declaration, of which sensors were well known in the mining industry at the priority date. Dr Hillier’s evidence traverses quite similar matters as in [5.5] of Holland, noting that the difference between referring to the “mining industry” and “earth working equipment” does not appear material given the context in which the evidence is given; see also the discussion about “earth working equipment” at feature 1.1 in NH-1. I also note that discussion of features 8.1 to 14.2 in NH-1 traverses several sensors of the sort, as discussed in Hillier2 at [52] and Holland at [5.5], in a way that is highly suggestive that these were well known in the art. In this context I am not satisfied that [52] is not properly in reply to the EIA.
29. The Applicant suggests, at [17] of the SIS and [32] of the SIR, that [52] is something that should have been filed as EIS. For reasons discussed above, I am not satisfied that that is the case.
Paragraph 54
30. This paragraph comprises a single sentence that refers to earlier discussions in Hillier2 regarding Dr Hillier’s views on his awareness of the use of vision based systems which count pixels to measure the length of a GET. These statements also more or less reflect statements Dr Hillier made regarding feature 6.2 and US 2010/0142759 in NH-3. Consequently, there does not appear to be any issue in terms of [54] being something that should have appeared in the EIS. There remains the question as to whether [54] is responsive to the EIA. While it does not reference any of the EIA, it would seem that this paragraph is generally responsive to Mr Holland’s discussion of known sensors at [5.5] of his declaration. I am not satisfied that this paragraph is clearly not properly in reply to the EIA.
31. The Applicant suggests, at [17] of the SIS and [32] of the SIR, that [54] is something that should have been filed as EIS. For reasons discussed above, I am not satisfied that that is the case.
Paragraphs 55 to 60
32. These paragraphs respond to [11.5] of Holland regarding whether a bucket is an obvious location for a sensor. These paragraphs appear to be properly in reply to the EIA and do not otherwise appear to comprise material that should have been filed as EIS. I am not satisfied that these paragraphs are not properly in reply to the EIA.
33. At [18] of the SIS, the Applicant argues these paragraphs should have been in EIS due to Dr Hillier first discussing the alleged lack of motivation to place sensors on buckets. However, it is not clear to me that these statements of Dr Hillier are necessary for making out a ground of opposition. Similar arguments are also suggested at [18] of the SIS and [33] of the SIA as discussed with regard to paragraph 11 above, and may be disposed of for similar reasons as discussed in connection with that paragraph.
Regulation 5.23
34. In the SIS and SIR, the Applicant has requested a period to consider filing a request pursuant to Reg 5.23 in the event the EIR challenged remained in evidence. In response to this, I refer to my comments at [158] and [159] of CQMS Pty Ltd v ESCO Group LLC [2023] APO 16.
CONCLUSION
I am not satisfied that any of the passages challenged by the Applicant are not properly in reply to the EIA.
COSTS
Costs usually follow the event. I see no reason to do otherwise here. I award costs against the Applicant according to Schedule 8 of the Regulations.
Dr W.E. Guinea
Delegate of the Commissioner of Patents
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