Cryovac, Inc v Pechiney Plastic Packaging, Inc

[2001] APO 56

OFFICIAL NOTICE

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Application  :          No. 722248 in the name of CRYOVAC, INC

Title:          Compositions and Methods for Selectively Cross-Linking Films and Improved Film Articles Resulting Therefrom

Action:          Opposition under section 59 (Patents Act 1990) by PECHINEY PLASTIC PACKAGING, INC.  Application for an extension of time in which to serve evidence in support (regulation 5.10(2)).

Decision:          Issued            .

Abstract

The extension sought is granted, even though there is not an adequate explanation for the delay, largely in consideration of advice at the hearing about the state of preparation of the evidence, and the indications that this is a serious opposition.  A short Ferocem type of extension is not appropriate on account of timing.  In view of the inadequacy of the explanation for the delay, costs are awarded against the opponent.

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent Application No. 722248 by CRYOVAC, INC and opposition thereto by PECHINEY PLASTIC PACKAGING, INC

BACKGROUND

Patent application 722248 (the application) was filed as 43621/97 on 25 March 1997 under the provisions of the PCT by W.R. Grace & Co, subsequently changed under a PCT Rule to proceed in the name of CRYOVAC, INC (Cryovac).  The application was advertised accepted on 27 July 2000.

On 27 October 2000 a notice of opposition was lodged by PECHINEY PLASTIC PACKAGING, INC (Pechiney), followed by a statement of grounds and particulars on 29 January 2001.  A first application for an extension of time of three months in which to serve the evidence in support was allowed without objection, though Cryovac did advise at that time that any further extension would likely be opposed.

On 30 July 2001 a second application for extension was made, for a further three months until 29 October 2001, to which Cryovac has objected.

The matter was set for hearing in Canberra on 6 September 2001.  Cryovac was represented by Mr Andrew Dark, patent attorney of Davies Collison Cave, Melbourne, and Pechiney by Mr David Tadgell, patent attorney of Phillips Ormonde & Fitzpatrick.  Both parties appeared by telephone and filed written submissions.

The Application for Extension of Time

The reasons given supporting the first extension are as follows:

"Preparation of Evidence-in-Support is continuing.

A local Expert has been identified and the matter has been discussed with the local Expert on a preliminary basis.  Relevant documents have been identified as outlined in the Statement of Grounds and Particulars, however the local Expert has not had the opportunity to review the relevant documents as yet.

It is anticipated that the Australian Attorney and the local Expert will have a meeting within the next week or so to discuss issues in relation to this matter and other related opposition proceedings.  At that meeting, it is hoped to obtain preliminary comment from the local Expert.

Further time is required to allow the local Expert to consider the relevant documents, arrange and conduct the meeting with the local Expert and the Australian Attorney, obtain comments from the local Expert and to place those comments in the form of a Declaration suitable for services as Evidence-in-Support."

In support of its second application for extension Pechiney states:

"Preparation of Evidence-in-Support is continuing.

Since our previous request for a n extension of time, a meeting was held between the Australian Attorney, and the local Expert who had been identified namely Professor David Solomon on 19 June 2001.  At that meeting, this case, together with a number of other co-pending 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 to discuss, amongst other issues, possible settlement of this opposition.  Further time is required to assess the outcome of that meeting.

Preparation of the 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."

The Relevant Law

Regulation 5.10(2) reads as follows:

"(2) The Commissioner may:
(a) on the application of a party in the approved form; and
(b) on such reasonable terms (if any) as the Commissioner specifies;
extend the time within which the party may take a step prescribed in this Chapter, not being a step that is taken under regulation 5.3 or paragraph 5.4(1)(a)."

The time for service of evidence falls under regulation 5.8 and therefore the above regulation applies.  However the application of this regulation is governed by regulation 5.10(5) which reads (so far as is relevant to the circumstances of this case) as follows:

"(5) The Commissioner must not….grant an application under subregulation (2)….unless the Commissioner:

(ii) is reasonably satisfied that….an extension of time….is appropriate in all the circumstances."

These regulations have been judicially considered, the principal cases being Ferocem Pty Ltd v Commissioner of Patents (1994) 28 IPR 243, Kent-Moore Corp v Environmental Products Amalgamated Pty Ltd (1992) AIPC 90-915, A Goninan & Co Ltd v Commissioner of Patents (1997) 38 IPR 213, and National Starch & Chemical Co v Commissioner of Patents [2001] FCA 33. The judgements show that that this regulation confers a broad discretion, which cannot be reduced to an imperative compliance with particular requirements. It requires proper, genuine and realistic consideration of all the relevant factors. Relevant factors will include the provision of an explanation for the delay, and the interests of the parties and the public.

Expressed generally, in exercising the discretion, the Commissioner must:

(i) before allowing an extension, be satisfied that the person seeking the extension has made out a proper case justifying the extension; and in deciding this:

(ii) take into account, not only the private interests of applicants for patents and their opponents, but also the interest the public has in the granting of valid patents and the timeliness of proceedings before the Commissioner.

SUBMISSIONS

The principal submissions from the parties are summarised as follows.

At the hearing

From Cryovac

· In the statement in support of the first application for extension of time (dated 26 April 2001) it is said that a meeting between the local expert and the Attorney was expected to be held "within the next week or so".  In fact, as shown in the statement in support of the second extension, the meeting did not occur for about eight weeks, on 19 June 2001.  At that meeting "preliminary comments" were obtained from the local expert.  No explanation is given for this delay.

· In the statement in support of the second extension (dated 30 July 2001) it is said that "further time is required to evaluate the preliminary comments….", which suggests that little if any work has been done on those comments in the six week intervening period.

· It is apparent from this that Pechiney is showing a lack of due diligence in its preparation of the evidence in support of its opposition.

· The second statement also refers to discussions in the United States regarding "possible settlement of this opposition".  This is incorrect.  While there are a number of Cryovac applications which are currently subject to opposition by Pechiney, and settlement negotiations are proceeding in respect of some, the present application is not one of them.

· The merit of this opposition should be considered in its context, which is that every pending Cryovac application (about 24) is being opposed by Pechiney.  This suggests that Pechiney is merely following a policy of opposing all of Cryovac's patent applications, and that the opposition is not a serious one.

· In the circumstances, should this extension be granted, there should be no other.

· In response to comments made at the hearing regarding the current state of preparation of the evidence, it was pointed out that there was no mention of this in the application for extension.

· Costs should follow the event.
From Pechiney

· While the statements do not provide a detailed explanation for the delays, this is not required, and what they do show is what progress is being made in the preparation of the evidence.  That is all which is required.

· The delays are largely due to the work involved in dealing with the number of concurrent oppositions, and the fact that the same local expert has been engaged in a number of them.

· Regarding the apparent absence of any present settlement negotiations, discussions with US Counsel in early September this year indicate that, on the basis of its subject matter and that of at least one other application on which negotiations are well advanced, it is anticipated that the present application will also be considered for settlement.

· The present case is important to Pechiney, which is not following a policy of blanket opposition to Cryovac applications.

· Support for Pechiney's claim that this is indeed a serious opposition can be found in the matters cited in the statement of grounds and particulars.

· The evidence is presently in a "rough first draft declaratory form", and one could "reasonably forsee that the evidence would be completed within the requested time".

I will refer to the parties' submissions where necessary in my decision.

After the hearing

After the conclusion of the hearing the Attorney for Cryovac made a written request for an opportunity to make submissions on costs, after the issuance of the decision, in respect of matters raised at the hearing and outside the application for extension.  The Attorney for Pechiney reiterated his view that costs should follow the event, as is usual.

The parties were advised on 5 October 2001 that the Delegate wished to include any award of costs in the decision proper, and accordingly they were allowed 7 days from this date to make any relevant submissions.  Both parties did make submissions, and I will refer to them under costs.

DECISION

I note that at the time of making this decision no evidence in support has been filed.

Has the delay in preparing the evidence been explained?

The Ferocem case shows that, while the reasons for requiring the extension are a relevant consideration in reaching a decision, nevertheless a satisfactory explanation is not a mandatory requirement.

The explanations given in support of the extensions are set out in full above, and Cryovac submits that a lack of diligence is indicated.  In regard to this, the Particulars cited consists only of a number (14) of English-language patent specifications, and it is not readily apparent why it should take so long to prepare and serve the relevant declaration(s).

However several matters tending to favour Pechiney did emerge at the hearing, namely the complexity and scope of the discussions between the parties to this case, that it recently appeared that this application could also be the subject of possible settlement discussions, and that the evidence could be in a later stage of preparation than the applications for extension suggest.

This is all a little vague though, and besides if the material is relevant to granting the extension it should appear in the supporting statement.  In my opinion the statements in support of both extensions are at best cursory, and do indeed, as Cryovac has submitted, give an impression of lack of due diligence.  For example there is no clear emphasis on the difficulty caused by the workload falling on the local Attorney and Expert as a consequence of the plural actions involving the two parties.  This is generally unhelpful, and I do not consider that a satisfactory explanation for the delay has been given.  However this does not determine the matter.

The interests of the parties

Clearly Cryovac's interests are best served by the expeditious grant of a patent for its invention.  Any unnecessary protraction of these proceedings is to Cryovac's disadvantage. 

However, at the hearing Pechiney's Attorney stated that the evidence was then in a rough draft declaratory form.  Consequently, if I was in fact inclined to refuse the extension sought, I would also be inclined to allow a short extension (as per Ferocem) in which to serve evidence presently to hand.  The reality then is, partly on account of my decision to consider late submissions (requested by Cryovac) regarding costs, and to include same in this decision, that there would be little if any difference (a few days at most) between the result of a Ferocem type extension and the extension sought.

Therefore I do not consider that Cryovac will be significantly disadvantaged by allowing the extension.

Assuming a serious opposition, Pechiney's interest is clearly in obtaining the extension so that it can serve evidence in support of its opposition.  Notwithstanding that in principle the opposition could proceed without evidence, and Pechiney could appear at the substantive hearing, it seems clear to me that it would be under a major disadvantage, and perhaps a crippling one.

The interests of the public

The public interest has two components.  First, that a serious opposition should be dealt with on its merits, as opposed to being shut down because of a procedural failure.  See Kaiser Aluminium & Chemical v The Reynolds Metal Co (1969) 120 CLR 136. This of course goes to the interest the public has of being confident in the validity of granted patents. Second, that proceedings before the Commissioner should be conducted in an efficient and expeditious manner.

In this case no evidence has been presently served.  In my opinion, unless some extension is granted, the opposition is in practical terms rendered untenable.  And if this is a case of a serious opposition, noting also that there are no other oppositions to the application, I consider that greater weight should be placed on the 'confidence in patent validity' aspect of the public interest.
But is this a serious opposition?  Cryovac assert that the number of oppositions by Pechiney against Cryovac's patent applications suggest a policy of opposing irrespective of merit.  However I have no real evidence of this, and I think I must look at the material which is before me.
This includes the fact that a local expert has been identified and engaged.  Also I have had a brief look at the specification in suit, which relates to multilayer crosslinked polymer films, eg for use in packaging food items.  While this not really my area of technical expertise, I am told that it is an area which is well developed and competitive.  A perusal of the statement of grounds and particulars show that the grounds relied on include those of novelty and obviousness, and the particulars are patent specifications, some in the name of Cryovac, or the predecessor to Pechiney.  The statement provides a brief description of the subject matter of most of the specifications, which is polymer films.

Also, as I have mentioned earlier, I was advised at the hearing that the evidence was in fact in a rough declaratory form.

In my opinion there this nothing before me on which I could reasonably conclude that this is not a serious opposition.

CONCLUSION

Taking into consideration all of the factors mentioned above, I am satisfied that the extension is appropriate in all the circumstances.  Accordingly I grant an extension of time in which to serve evidence in support to 29 October 2001.

However I note that the extension has been granted in large part on the understanding that the evidence is likely to be completed and served within this time.  Absent much more compelling explanation than has presently been given, it is unlikely the Commissioner would look favourably on any further request for time to serve this evidence.

COSTS

In proceedings before the Commissioner costs normally follow the event, and Pechiney submitted that should be the case here.  In written submissions after the hearing the reasons for this were somewhat expanded on, mainly questioning Cryovac's motive in objecting to the extension. 

Cryovac's submissions on this matter principally raise issues I have already referred to, namely the true position regarding negotiations (if any) on this case, and the true state of preparation of the evidence, in contrast to what is actually stated in the application for the extension.  In this regard I have already decided that the explanation for the delay is inadequate.

Taking into account all the matters raised, notwithstanding that the opponent has been successful, I consider that it is appropriate to award costs against them.  Consequently I award costs against Pechiney Plastic Packaging, Inc.

RG Tolhurst
Delegate of the Commissioner of Patents

Patent attorneys for the applicant  :  Davies Collison Cave, Melbourne

Patent attorneys for the opponent   :  Phillips Ormonde & Fitzpatrick