Dextec Metallurgical Pty Ltd v SOCIETE Miniere Et Metallurgique De Penarroya

[1982] APO 38

In the Matter of the Patents Act 1952

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In the Matter of Application No. 502,388 in the Name of DEXTEC METALLURGICAL PTY. LTD.

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In the Matter of Opposition thereto

under Section 59 by SOCIETE MINIERE ET

METALLURGIQUE DE PENARROYA

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In the Matter of Application for Special Leave to Adduce Further Evidence under Regulation 59(1)(b).

DECISION OF AN ASSISTANT COMMISSIONER OF PATENTS:
        This is a matter in which Societe Miniere et Metallurgique de Penarroya (hereinafter referred to as Penarroya) seek special leave under Reg. 59(1)(b) to adduce further evidence in support of a S.59 opposition, referred to herein as the substantive opposition.
        The substantive opposition is directed against patent application no. 502388, lodged on 30 January 1976 as application no. 10711/76 in the name of Peter Kenneth Everett, but subsequently assigned to Dextec Metallurgical Pty. Ltd. (hereinafter referred to as Dextec).  Acceptance was advertised on 26 July 1979.

After being granted an extension of time to do so, Penarroya lodged a Notice of Opposition on 25 January 1980.  The evidence in support was served on 13 November 1980.
        Although Dextec requested (and were granted) two extensions of time in which to lodge evidence in answer, no evidence was lodged.  Instead, on 18 May 1981, Dextec lodged a request to amend under S.77.  The particulars of the request were advertised on 11 June 1981, following which a Notice of Opposition to the allowance of the amendments was lodged by Penarroya, under S.82, on 7 September 1981.  Again Penarroya requested extensions of time in which to serve evidence in support, the second of such requests being opposed by Dextec.  However, that opposition did not result in a hearing since Penarroya opted not to enter any evidence in support.  The S.82 opposition was heard in the Patent Office on 16 January 1982 and is reported in summary in 1982 AOJP 1566.  The S.77 amendments were allowed and duly incorporated into the Dextec specification.
        The effect of those amendments has some relevance to the present decision.  In the specification before amendment the broadest claim (Claim 1) was directed to a wet ore treatment process carried out within a specified pH range.  The claim contained no reference to performing the process in an electrochemical cell, nor to the use of an electrical current at any stage.  Claims 2‑5 were appended to Claim 1 and similarly did not introduce any feature of an electrical or electrochemical nature.  Claim 6 was an independent claim directd to a process similar to that of Claim 1 but characterised in that the process was carried out in an electrochemical cell, current being passed at such a rate as to maintain the pH within the specified range.  The current also had the effect of precipitating the desired product in elemental form.  With the exception of Claim 13 (an independent omnibus claim), the remaining claims were appended to "any one of the preceding claims".
        The effect of the amendments was to delete original Claims 1‑5, leaving, as the main claim, original Claim 6, that claim being unchanged except for a narrowing of the pH range.
        Dextec, invoking Reg. 61(4), requested that the Commissioner, of his own motion, set a date for hearing the substantive opposition, and the date set was 11 November 1982.  However, one week before that date, the present request for special leave to adduce further evidence was made by Penarroya.  This request was opposed by Dextec and a hearing in this matter was held in Canberra on 7 December 1982.  Mr. R.F. Pickering appeared for Dextec and Mr. C.M. Bentley appeared for Penarroya.
        Regulation 59(3) requires that such a request be accompanied by a declaration stating the grounds for the request and indicating the nature of the further evidence which it is proposed to adduce.  The declaration submitted by Penarroya consists of 28 paragraphs and the grounds for making the application are evidently intended to be found in paragraph 27 which states "The grounds upon which the application for special leave are made include the submission that, in view of the insufficient and erroneous teachings in the Dextec specification as amended, the above mentioned arguments should be included in the evidence in the public interest".  And the nature of the proposed new evidence is to be found in paragraph 28; it is to be "an affidavit by a person skilled in the art, treating in more detail the submission summarised above".
        I have found it difficult to determine, with some exactitude, just what is encompassed by the term "the submission summarised above", since some of the preceding paragraphs of the declaration leave something to be desired in the matter of clarity.  However more important than the precise nature of the evidence is the fact that it is directed against a specification whose new main claim is virtually unaltered from its original form.  That claim, and the description upon which it is based, has always been in the specification, so that any defects which the proposed new evidence would ‑ rightly or wrongly ‑ point out, must have been present at the time the original evidence was lodged.
        At the hearing Mr. Bentley submitted two arguments supporting his request for special leave.  Firstly that Penarroya, once the amendments had been allowed, were faced with what was in effect a new specification, requiring a fresh approach; and secondly, that support is to be found in the words of Kitto J. in Kaiser Aluminium Corporation Ltd. v Reynolds Metals Companyat 120 CLR 143: "it is in the public interest that a serious opposition by a person entitled in fact to oppose the grant of a patent should be dealt with on the merits, rather than that it should be shut out in consequence of a failure in procedure, lamentable though the failure may be".
        I think the first of those two arguments loses much of its weight once it is realised that the S.77 amendments did not result in the specification claiming anything which was not previously claimed and described.  If that description is insufficient and erroneous now, it was also insufficient and erroneous then; and, so far as can be gathered from the declaration setting out its nature, the evidence of insufficiency and error which the opponent now seeks to adduce could just as well have been adduced before.  That is, it does not appear to contain anything which has unexpectedly come to light in the interim.  Even Mr. Bentley freely admitted at the hearing that the evidence in support should have dealt with all the claims of the specification as accepted.
        I turn now to the second of Mr. Bentley's arguments.  In Kaiser v. Reynolds the "failure in procedure" was that the opponent, in proceedings before the Deputy Commissioner, failed to include in his notice of opposition sufficient information to substantiate his interest to oppose the grant.  The opponent, in its appeal to the High Court, requested that its notice of opposition be substituted by another which sought to clearly establish its locus standi.  The Court found that the failure of the opponent to establish its locus standi before the Deputy Commissioner did not preclude it from relying on such interest on appeal, and that further evidence establishing interest should be admitted.  Kitto J. said that:

"The respondent, however, contends that even if the appellant has such an interest as makes it a competent opponent, the evidence which establishes the interest is inadmissible because the notice of opposition did not state the relevant facts. An analogy was suggested between a notice of opposition under the Patents Act and a notice of objection to an assessment under the Income Tax Assessment Act 1936 (Cth). In my opinion there is no such analogy, for the former Act contains no provision corresponding with s.190(a) of the latter. The argument against admitting the evidence rests upon reg. 20 of the Patents Regulations, which provides that a notice of opposition to the grant of a patent shall be in accordance with form 12. That form contains the words "My interest in this matter is based upon the following facts:"; but there is nothing in the Act or the Regulations to make a statement of facts sufficient to give a locus standi a condition precedent to the right of objection or the right of appeal. On the contrary, s.59 gives "a person interested" an unqualified right to oppose the grant of the patent by notice in writing lodged at the Patent Office. Regulation 20 would, I think, be inconsistent with the Act and therefore beyond the regulation‑making power in s.177 if it meant that unless form 12 were complied with to the extent of stating the facts upon which the opponent's interest depends a person in fact interested should not be entitled to oppose the grant by lodging the notice. The terms of s.59 by which the right of opposition is limited to a right to oppose "by notice in writing lodged at the Patent Office" require no more for a valid opposition than what Evatt J. called "a de facto notice": R. v. Commissioner of Patents : Ex parte Weiss (1). The provision in form 12 for stating the facts as to interest is to be understood, in my opinion, as directory only, with the result that the absence of the statement does not make the notice something less than a notice of opposition, whatever may be the effect as regards costs."

A failure in procedure of this sort is entirely different from the failure in the present case which, to my mind, is not a failure in procedure at all.   In the present case the opponent in his evidence in support elected not to adduce evidence opposing original claim 6.   If he made any error here it is one of judgement rather than of procedure.   Furthermore the opponent has no "unqualified right" to introduce new evidence two years after the evidence in support was served.             
        A further point made on Penarroya's behalf was that Dextec's decision to amend rather than to serve evidence in answer deprived Penarroya of an opportunity to introduce the new evidence at an earlier stage.  What might have happened had Dextec chosen another course must be a matter of speculation, being a hypothetical situation, but in any event it is difficult to see how Penarroya's problem could have been avoided, even if evidence in answer had been served.  Such evidence would have had to be directly in answer to Penarroya's original evidence, and similarly evidence in reply would have had to be limited to the points raised by Dextec, and it seems unlikely that the latter would voluntarily provide the opponent with an opportunity to expand his attack.  Nevertheless, my attention was directed to one of the arguments arising in Canadian Industries Ltd. v Australian Paper Manufacturers Ltd., reported in 1981 AOJP 4565.  In that case, the opponent elected not to serve evidence in reply.  At the hearing a defect was found in the evidence in support and the opponent applied for special leave to adduce further evidence to correct the defect.  One of the arguments put forward against granting the special leave was as follows:  by serving notice that they did not intend to introduce evidence in reply, the opponent had brought Reg. 59(8) into operation, and since he had previously neglected an opportunity to correct the defect by way of evidence in reply he should be excluded by Reg. 59(8) from obtaining the special leave.  The argument was rejected on the grounds that the opponent had not in fact neglected an opportunity:  the evidence could not have been introduced as evidence in reply since the applicant's evidence in answer did not raise the matter.  Special leave was granted.
        In the present case there is of course no question of a Reg. 59(8) constraint, but the parallel sought to be drawn by Mr. Bentley is clear:  Penarroya could not have corrected the defect by way of evidence in reply, even if evidence in answer had been served.  Therefore, the argument goes, to be consistent with the CIL case, the special leave should be granted.
        I do not consider the two situations to be truly parallel.  In the CIL case the new evidence was not a completely new attack on the specification ‑ it was merely the correction of minor clerical deficiencies in the translation of a citation, already forming part of the evidence which did not alter the subject matter of the evidence and could not catch the Applicant by surprise; whereas in the present case the proposed new evidence would attack the Dextec specification in a totally new area and on totally new grounds.
        In all cases where special leave to adduce new evidence is sought a balance must be struck between, on the one hand, the desirability of having as much relevant evidence as possible available for consideration at the substantive hearing, so as to minimise the chance of an invalid patent being granted, and on the other hand the inconvenience and possible injustice to the applicant of the delay which is incurred by such a procedure.  In arriving at the balance, many factors must be considered, and these have been ably and succinctly put to me by Mr. Bentley and Mr. Pickering.  One of those factors is the relevance of the proposed evidence, insofar as that can be estimated from the declaration.  As I have indicated above I find the declaration difficult to follow in some places, but even so it seems that much of the material in it consists of what the declarant says is the opinion of the opponent.  (The declarant is not the opponent).  But I can find very little in the declaration to suggest that the opponent's opinions are based upon fact.  For example, there is nothing to suggest that the opponent has tried to put into practice the applicant's process and has been unable to do so because of insufficient teaching; or that he has followed the instructions and found that the process does not work because of erroneous teaching.  The latter could well be a question of utility and as such would not be a ground of opposition, but I place less weight on that than on the fact that the allegations appear to be based on divergence from accepted theory rather than on a practical demonstration of the alleged deficiencies.  For that reason, I am not persuaded that the proposed new evidence, as it is described in the declaration, would be decisive of the substantive opposition, and this must detract from the "public interest" side of the balance.  In addition, there is nothing in the declaration to indicate that the opponent has the new evidence to hand.  That suggests to me that admission of the evidence could result in considerable further delay, particularly if the applicant found that additional experimentation was necessary to counter it.
        Another factor is the question of diligence on behalf of the opponent. From the facts I have outlined above I cannot escape the conclusion that Penarroya have not displayed the diligence required to sustain their application to adduce further evidence.  I see no reason why, with reasonable diligence, they could not have included this evidence two years ago in their evidence in support.
        On balance, I do not believe that the reasons given by the opponent are sufficient to justify exposing the applicant to a completely new attack at this late stage, nor do I think that a case has been sufficiently made out to show that considerations of public interest are sufficient to outweigh that.  Consequently I refuse the request for special leave.
        As to costs, I can find no evidence, nor was I given any, to support Mr. Pickering's contention at the hearing that the opposition is frivolous and vexatious, and consequently I refuse to make any order in respect of security for costs.  In the event, there is no conflict as to the award of costs in this action.  Mr. Pickering's assertion that costs should be awarded to Dextec on the basis of the decisions in Hilton Hosiery Ltd. v Burlington Mills Corp. (1960 AOJP 1099) and Purcell v Hasse (1968 AOJP 2155) would lead to the same end result as Mr. Bentley's suggestion that costs should follow the event.  Accordingly I award costs involved in this hearing up to the date of this decision against Penarroya.

(G.J. BAKER)