Cryovac Inc v Pechiney Plastic Packaging, Inc
[2002] APO 18
•22 May 2002
OFFICIAL NOTICE
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 727335 in the name of CRYOVAC INC
Title: Patch Bag Having One Continuous Patch
Action: Opposition under section 59 by PECHINEY PLASTIC PACKAGING, INC; Objection to a request under regulation 5.10(2) for an extension of time to serve evidence in support.
Decision: Issued .
Abstract
A request for an extension of time to serve evidence in support was objected to by the applicant. The application was advertised as lapsed subsequent to the hearing. The decision was reserved until the application was restored.
Application for extension of time allowed. The opponent employed a single expert in relation to a relatively large number of oppositions. Partly as a result of the input of this expert, meaningful settlement negotiations are being pursued on a number of these oppositions. Although there was disagreement whether initially the present application could potentially be settled, it was now agreed that it was not part of settlement negotiations. Found that the settlement negotiations in relation to a range of matters was a relevant factor on the facts of the case, with the important proviso that it does not result in an exceptional protraction in the opposition process. It was in the interests of the parties and in the public interest if a large number of oppositions could be resolved.
As the application had been lapsed and restored, a direction proposed that the opponent have three months from the date of the decision to serve evidence in support. Parties have 14 days from date of decision to make any representations concerning the proposed direction.
Costs awarded against the applicant.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No. 727335 by Cryovac Inc; opposition under section 59 by Pechiney Plastic Packaging, Inc; objection to a request under regulation 5.10(2) for an extension of time to serve evidence in support.
BACKGROUND
Cryovac Inc (“Cryovac”) filed patent application 727335 (12061/97) on 26 December 1996 via the provisions of the Patent Co-operation Treaty. The application has been amended to be a divisional application of 699134. The application was advertised accepted on 7 December 2000. Pechiney Plastic Packaging, Inc (“Pechiney”) filed a notice of opposition on 7 March 2001 and a statement of grounds and particulars on 7 June 2001. The time set out in regulation 5.8(1A) for serving evidence in support expired on 7 September 2001. Pechiney sought, and was granted, an extension of time under regulation 5.10(2) until 7 December 2001 in which to serve its evidence in support. Pechiney has now requested an extension of a further three months to 7 March 2002 in which to file its evidence in support. Cryovac has objected to this request.
I heard the parties in Canberra on 8 January 2002. Mr Andrew Dark, patent attorney of Davies Collison Cave, Melbourne, represented Cryovac. Mr David Tadgell, patent attorney of Phillips Ormonde & Fitzpatrick, Melbourne, represented Pechiney. Both parties were heard by telephone and also submitted written copies of their submissions prior to the hearing.
LAPSING AND RESTORATION OF APPLICATION
Subsequent to the hearing, I became aware that the application had lapsed due to a failure to pay the continuation fees due on 28 June 2001. The correct fee was not paid within the periods set out in regulation 13.3 and the application was advertised lapsed on 15 February 2002. The parties were advised that a decision on the extension of time to serve evidence in support would not issue unless and until the application was restored.
The applicant subsequently paid the correct continuation fees together with a request under section 223 for an extension of time in which to pay the fees. The section 223 request was allowed on 23 April 2002 and this was advertised in the Official Journal of Patents on 9 May 2002. Therefore the application has now been restored.
As a result of the lapsing and restoration of the application, questions arise over the application of the timing provisions set out in regulation 5.8 and any extensions already granted under regulation 5.10(2). In my view, the opposition process can most simply and conveniently be progressed by issuing appropriate directions under regulation 5.10(1).
The nature of any directions to be made may be dependent on whether Pechiney's second request for an extension of time is justified. Therefore before proposing any directions, I have considered the respective cases put to me by the parties at the hearing on 8 January 2002.
REASONS FOR EXTENSIONS
Pechiney set out the following reasons in their first request for an extension of time, from 7 September 2001 to 7 December 2001:
"Preparation of Evidence-in-Support is continuing.
The Statement of Grounds and Particulars to support this opposition was served upon the Attorney for Cryovac on 7 June 2001. Since filing that statement, a meeting was held between a local Expert, namely Professor David Solomon and the Australian Attorney on 19 June 2001. At that meeting, this case, together with a number of other copending opposition matters, was discussed and preliminary comments were obtained from Professor Solomon, specifically in relation to this case.
A meeting was also held between representatives of the Applicant and the Opponent in the United States on 25 June 2001. At that meeting, the possibility of settlement was discussed in relation to a wide range of matters, which discussions could lead to settlement discussions in relation to this opposition. Further time is required to assess the outcome of that meeting.
Preparation of Evidence is however continuing, and further time is required to evaluate the preliminary comments obtained from Professor Solomon, obtain further comments should that be necessary and to place those comments in a form suitable for service as Evidence-in-Support."
Cryovac did not object to the first request for an extension of time, but filed comments that it was their understanding that this opposition was not subject to settlement discussions as stated by the opponent. A delegate subsequently allowed the extension, and Pechiney was notified that any further extensions based on negotiations would be required to be supported by evidence that the other party is participating.
Pechiney's reasons for their second request for an extension of time of 3 months from 7 December 2001 to 7 March 2002 are as follows:
"Preparation of Evidence-in-Support is continuing.
A local Expert, namely Professor David Solomon has been engaged to assist in the preparation of Evidence for this matter. A meeting was held between Professor Solomon and the Australian Attorney on 19 June 2001. At that meeting, this case, together with a number of other co-pending opposition matters was discussed and preliminary comments have been obtained from Professor Solomon leading to preparation of a draft declaration.
Since that meeting, the Applicant and the Opponent have been engaged in settlement negotiations relating to a large number of opposition matters in the same technical field as this application, both Australia and New Zealand. This has involved Professor Solomon's time to the extent that he has been providing advice with respect to a large number of these related opposition matters in both Australia and New Zealand. As a result of this review, and the continued discussions between the US representatives of both the Applicant and the Opponent, some meaningful settlement negotiations are now continuing with the latest correspondence being a confidential letter of 12 November 2001 from US Counsel for the Opponent to US Counsel of the Applicant. In this correspondence, some seventeen Australian matters and eleven New Zealand matters have been identified for continued settlement negotiation.
Whereas opposition to Australian application 727335 was not referred to in the correspondence of 12 November 2001, Professor Solomon's consideration of the matter to date has been relevant in that the emphasis has been placed on identifying those matters suitable for possible settlement and those matters for which preparation of Evidence should continue. It is only now that case review has reached the point where those cases for possible settlement, and those cases for continued Evidence preparation, have been clearly identified, that Professor Solomon can devote further time into finalising preparation of Evidence in this matter.
Further time is required in order to enable completion of a draft declaration based on the comments obtained so far from Professor Solomon, obtain further comments if necessary, allow US Counsel for the Opponent to review the draft declaration and to serve the declaration as Evidence-in-Support."
DECISION
10. The opponent has applied for an extension of time under regulation 5.10. Regulation 5.10 lays down the general requirement that, before granting an application for extension of time, I must be reasonably satisfied that it is appropriate in all the circumstances. The Federal Court has considered the requirements of regulation 5.10 in Ferocem Pty Limited v. Commissioner of Patents (1994) 28 IPR 243, A Goninan and Co Ltd v Commissioner of Patents and other (1997) 38 IPR 213, and National Starch & Chemical Company v Commissioner of Patents 50 IPR 398. The principles arising from these decisions have been set out and followed in numerous patent office decisions relating to regulation 5.10. In summary, it is clear from those decisions that in order to determine if an extension of time is appropriate in all the circumstances, I need to give proper, realistic and genuine consideration to all relevant factors. These factors include the reasons for the extension, the interests of each of the parties, and the public interest.
11. This application is one of around 24 or 25 applications by Cryovac that are currently being opposed by Pechiney. Pechiney have obtained a local witness, Professor David Solomon, to assist in preparation of evidence in these matters. Professor Solomon is apparently an employee of the University of Melbourne and independent of the opponent. Professor Solomon is also assisting the opponent in a number of related oppositions in New Zealand.
12. Settlement negotiations between Cryovac and Pechiney have been continuing in relation to a number of these oppositions both in Australia and New Zealand. According to the opponent, a confidential letter was sent in early November 2001 from Pechiney's US Counsel to Cryovac's US Counsel identifying 17 Australian and 11 New Zealand matters for continued settlement negotiation. Preparation of evidence in the 17 Australian applications identified for continuing settlement negotiations have been put on hold, with the result that the opponent can now concentrate on the remaining 7 or 8 oppositions. These remaining oppositions are at varying stages of the opposition process, with some apparently in the early stages of the opposition process.
Reasons for the extension
13. The opponent's reasons for the extension of time state that Professor Solomon's consideration to date has been relevant in identifying those matters suitable for possible settlement. Mr Tadgell said that although commercial considerations are also taken into account, the work conducted by Professor Solomon to date has lead to the position where meaningful negotiations are continuing with 17 Australian and 11 New Zealand matters. Professor Solomon has also reviewed and provided comment in relation to a much larger number of matters than that, including the present opposition.
14. I have some sympathy for the applicant's concerns that the opponent has filed a large number of oppositions and chosen to rely on the same expert in all of these oppositions, with the resulting delays that this will inevitably produce. The opponent's inability to meet the time limits set out in the regulations appears to be largely due to their choice of engaging the same expert to advise in relation to a large number of oppositions.
15. Mr Tadgell said that because of the commercial dominance of the applicant, it was difficult to find local experts that had not had some involvement with the applicant. Mr Tadgell said that the opponent favoured using an independent expert, as the use of in-house experts was often viewed as detrimental to the authoritativeness of the witness. Mr Tadgell also referred to Professor Solomon's expertise in the area and said his familiarity with the technology to a certain extent offset the time constraints placed on Professor Solomon by dealing with a large number of matters. I can well understand the opponent's reasons for its choice of expert. However, it is incumbent on the opponent to devote sufficient resources to meet the regulatory time limits for serving evidence.
16. It is tempting to come to the conclusion that because Professor Solomon is involved in so many oppositions, little progress is being made on any of them as he has limited time to devote to each opposition. However, the opponent has asserted that, at least in part due to the considerable amount of work that Professor Solomon has so far committed, "meaningful" settlement negotiations are continuing in relation to 17 Australian and 11 New Zealand matters. Although there is no direct evidence of this, it was not disputed by the applicant.
17. The applicant argued that it appears that no steps have been taken to prepare evidence in this case pending the settlement negotiations on unrelated co-pending applications. It is of course arguable whether the status of co-pending applications is even a relevant circumstance to a request for an extension of time to serve evidence. In my view, this will be dependent on the facts of each case. I believe that, in the present circumstances, it is necessary to consider the broad picture in which the present application appears to be part of a portfolio of applications. It would appear to be in the interest of all parties to settle matters wherever possible to avoid unnecessary opposition proceedings. The public interests relating to cost, efficiency and expeditious disposal of matters may also be served by the oppositions being settled, particularly the number of oppositions in question here. Further, it will only be when all of the oppositions have been finalised that the public will have a clear idea of the monopoly rights covered by the applicant's patent portfolio. In my view, the settlement negotiations in relation to a range of matters is a relevant factor here, with the important proviso that it does not result in an exceptional protraction in the opposition process. This is, of course, a balancing exercise in which each case needs to be determined on its merits.
18. There was also some disagreement between the parties over the initial possibility of settlement of the present application, though there is consensus now that the application is not part of the negotiations. Mr Dark submitted that the opponent has been aware that the present opposition was not open to settlement discussions by virtue of a confidential letter from the applicant to the opponent dated 20 July 2001. He submitted that the opponent should have been proceeding with diligence on those matters that it knew were not subject to settlement negotiations. Mr Dark also submitted that the Australian attorneys for Pechiney knew from at least September that the present opposition was not subject to settlement negotiations, as a result of comments filed by the applicant in response to the opponent's first request for an extension of time.
19. Neither the July letter or November letter were before me, so it is difficult to draw any conclusions as to what extent these letters set out agreed positions or were merely proposals and counter-proposals. However, it seems to me that the opponent should have realised that the current opposition wasn't part of the settlement negotiations at least by September, and certainly by November. That is very close to the current extension requested and it appears that Professor Solomon was continuing to provide comments and advice on the relatively large number of cases up to that point.
20. The opponent has said that they can now concentrate on those matters which are not part of the settlement negotiations, and that Professor Solomon has been put on notice to prioritise preparation of evidence in this opposition. Mr Tadgell said that Professor Solomon is the type of expert who considers all relevant material thoroughly and prefers to be actively involved in the preparation of draft declarations. That may be so, but it is incumbent on the opponent to emphasise to its expert the importance of the need for diligence in preparation of evidence.
21. I am satisfied that the reasons provided by the opponent favour allowing an extension of time in the present circumstances, given that settlement negotiations appear likely to bear fruit in relation to a relatively large number of applications thanks at least in part to the efforts of Professor Solomon, and on the basis that Professor Solomon is now prioritising the preparation of evidence in this opposition. However, it is unlikely I would view the settlement negotiations on other applications as continuing to be relevant should the opponent seek further extensions.
Interests of the parties
22. To date, the opponent has not filed any evidence in the opposition. Therefore refusing the request for an extension of time would be fatal to the opponent's case. The opponent's interests are clearly served in allowing the extension.
23. It has generally been accepted in decisions dealing with extensions of time to file evidence in support that the applicant would be disadvantaged by any delays in getting their patent application to grant. Although the applicant could not point to any particular disadvantage in the present circumstances, I accept that any delay in determining the opposition may disadvantage the applicant.
24. The applicant also argued that it was an apparent policy of the opponent to oppose a substantial proportion of the applicant's Australian pending patent portfolio. The opponent disputed that it had a blanket policy of opposing the applicant's patent applications. It said that the oppositions filed were based on a specific identification of applications in a technical field, and that a number of applications by Cryovac had proceeded to grant recently with no opposition having been filed. Although there are a relatively large number of oppositions currently in train by Pechiney against Cryovac applications, there is no evidence before me to suggest that there is any policy to automatically file oppositions without consideration of the merits. I note that if the applicant was serious in its concern that the opposition was filed as part of a blanket policy of opposing rather than based on merit, it was open to them to request dismissal of the opposition under regulation 5.5.
25. I do not believe that there would be sufficient detriment caused to the applicant to warrant refusing the extension.
Public Interests
26. As set out in Ferocem, the public interests include the expeditious disposal of matters in the Patents Office, and questions of cost, of efficiency, and of insistence upon proper professional standards being maintained by those who deal with the office. But the public interests also include having an opposition determined on its merits.
27. This is the second request for an extension of time, each extension being for a period of three months. I agree with the opponent that this is not an exceptional period in relation to opposition proceedings, though what is exceptional is largely dependent on the facts of each case. I also note the opponent's comments that it is now concentrating on this opposition and its expert has been put on notice to prioritise preparation of evidence in support. Although there has arguably been a lack of diligence in preparing evidence in this opposition at the expense of pursuing settlement on a range of applications, I do not believe any resulting protraction has been so great as to significantly impact on the public interest.
28. In terms of the opposition being dealt with on its merits, a cursory look at the statement of grounds and particulars suggests that a serious opposition is in train. Although the applicant argued that the opponent has a blanket policy of opposing the applicant's applications, there is no evidence to support this and the statement of grounds and particulars prima facie suggest otherwise. Therefore there is considerable public interest in allowing the opponent further time to serve evidence in support.
29. I consider that the public interests support allowing the extension.
CONCLUSION
30. I am reasonably satisfied that the extension of time to file evidence in support is appropriate in all the circumstances. Therefore I allow the extension. However, due to the lapsing and restoration of the application, the period in which the opponent has to file evidence in support needs to be clearly identified. The opponent requested and paid fees for a period of three months, from 7 December 2001 to 7 March 2001. That period has expired. However, there is some uncertainty as to the operation of regulation 5.8 as extended by regulation 5.10 in the present circumstances as to the exact date on which evidence in support was due.
31. In my view, the most appropriate way to give effect to the opponent's request for an extension of time is to direct that the time for serving evidence in support be three months from the date of this decision. Such a direction would not only give effect to the opponent's request, which I have found to be justified, but would also remove any uncertainty as to the date on which evidence was due under regulation 5.8 as extended under regulation 5.10.
32. Therefore I propose to direct that the time for serving evidence in support be three months from the date of this decision. I note here that the lapsing and restoration of the application was completely out of control of the opponent. Any difficulties here arise purely from the error or omission of the applicant leading to the lapsing. It would be unreasonable to have expected the opponent to continue preparing evidence while the application was lapsed and waiting to be restored. Therefore I consider that the proposed direction is appropriate in all the circumstances.
33. However, regulation 5.10 requires me to give the parties a reasonable opportunity to make representations concerning the proposed action before making any directions under regulation 5.10(1). The parties therefore have 14 days from the date of this decision to make representations concerning this proposed direction. If no response is received within that time, I will proceed to issue the above direction.
COSTS
34. The parties agreed at the hearing that costs should follow the event. I have found for the opponent, in that the requested extension was allowable. Given that I have found for the opponent, I do not believe that any of the consequences of the lapsing and restoration of the application impact on any award of costs, as this arose as a result of an error by the applicant. Therefore, I award costs relating to the objection to the extension of time and associated hearing against the applicant, Cryovac Inc.
Brendan Bourke
Delegate of the Commissioner of Patents
Patent attorneys for the applicant : Davies Collison Cave, Melbourne
Patent attorneys for the opponent : Phillips Ormonde & Fitzpatrick, Melbourne
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