Eka Nobel AB v Sterling Canada, Inc

[1993] APO 22

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent Application No. 628254 by EKA NOBEL AB, opposition thereto by STERLING CANADA, INC., an application under regulation 5.10(2) for an extension of time to lodge a statement of grounds and particulars, and an objection thereto.

BACKGROUND

Application 628254 was lodged on 28 February 1991 by Eka Nobel AB as application 71987/91.  It was accepted on 10 September 1992, and a notice of opposition was served on 8 December 1992 by Sterling Canada, Inc.  Consequently, the time for serving the statement of grounds and particulars required under Regulation 5.4(1) expired on 8 January 1993.  However, on 7 January 1993 the opponent applied for a one month extension in which to serve its statement.  The applicant objected to a granting of the extension.  The statement of grounds and particulars was served on 4 February 1993.  A hearing on the objection was held in Canberra on 9 March 1993.  The applicant was represented by Mr Graeme Blair, patent attorney of Griffith Hack & Co, Melbourne, while the opponent was represented by Mr Paul Jones, patent attorney of Phillips, Ormonde & Fitzpatrick, Melbourne.

As the application was advertised as accepted after the commencement of the Patents Act 1990, the procedures of the opposition are essentially governed by Chapter 5 of the Patents Regulations 1991. The provisions of Chapter 5 of the Regulations having a particular bearing on this matter are:

5.4(1) An opponent must:

(a)within 1 month of filing the notice of opposition

serve on the applicant a copy of a statement that

sets out:

(i)the grounds of opposition; and

(ii)the particulars relating to each ground;

and

(b)as soon as practicable after the copy of the

statement has been served on the applicant, file

the statement.

and

5.10

(5) The Commissioner must not give a direction under subregulation (1) or grant an application under subregulation (2) or (4) unless the Commissioner:

(c)   

(ii) is reasonably satisfied that a direction, an extension of time or the serving of further evidence is appropriate in all the circumstances.

THE REQUEST

The reasons specified in the request for an extension of time are as follows:

"The opponent requires more time to finalise details of its Statement of Grounds and Particulars.  In particular, the opponent has gathered detailed prior art information relevant to a number of grounds and a draft Statement of Grounds and Particulars prepared.  However, the opponent is still gathering details of common general knowledge in Australia as at the priority date.  To this end, the opponent has already contacted local experts in the field and has conducted a survey of some of the relevant literature; however some relevant international publications have not yet been located in Australia.  In addition, the closing down of plants during the Christmas holiday period has meant that some local experts are not available for comment until mid-January.  Further, information has just today been received regarding the state of the art in Australia and further relevant material provided at international seminars.  However, further research will be required in the light of this new information."

Subsequently, prior to the hearing, the opponent filed a statutory declaration elaborating the relevant facts relating to the extension of time request, in the following terms:

"I, PAUL WILLIAM JONES, Patent Attorney of 10 Hilltop Avenue, Glen Iris, Victoria, Australia do solemnly and sincerely declare as follows:

1.I am a Patent Attorney registered to practise in Australia and a partner in the firm of Phillips Ormonde & Fitzpatrick, of 367 Collins Street, Melbourne, Victoria, Australia.  Phillips Ormonde & Fitzpatrick are the Attorneys for Sterling Canada, Inc. ("Sterling"), the opponent in this matter and I am responsible for the prosecution of the opposition on behalf of Sterling.

2.On 28th October, 1992, I received instructions to lodge a Notice of Opposition to Australian Patent Application 628,254 ("the opposed specification") from the Canadian Attorneys acting for Sterling ("the Canadian Attorneys") and a request for an explanation of the opposition process in Australia.  However, no details of the basis of the opposition were provided.  In response, the importance and timing of lodgement of the Statement of Grounds and Particulars was highlighted as was the importance of the common general knowledge in the field in Australia.

3.On 24th November, 1992, a Brief was received from the Canadian Attorneys, which set out the basis of the opposition.  The Brief had been prepared from the corresponding interference proceedings between the parties in the United States.  Work on a draft Statement of Grounds and Particulars ("Statement") began immediately and an interim report was despatched to the Canadian Attorneys on 25th November, 1992, pointing out inter alia, local issues raised by the Brief.  A reply was received on 30th November, 1992 and the Notice of Opposition filed on 8th December, 1992.

4.Work on the Statement continued and a report was despatched to the Canadian Attorneys on 16th December, 1992 highlighting further deficiencies in the Brief, particularly a complication with an Australian citation and the lack of any data on the state of common general knowledge in Australia.  During the period 21st December, 1992 to 24th December, 1992 I conducted research in my records relating to pulp and paper manufacture in Australia and located reference on a number of standard texts illustrative of the common general knowledge in the field.  These references were checked for their relevance to the opposed specification.

5.Further work was delayed for one week due to my absence and that of the Canadian Attorneys during the Christmas and New Year period.  However on my return and in the absence of a reply from the Canadian Attorneys a reminder was sent on 4th January, 1993 by facsimile.

6.At the same time further investigations were initiated independently to ascertain the state of common general knowledge in the field in Australia.  On 4th January, 1993, and after a number of unsuccessful attempts to contact potential experts, a telephone conference was held with Dr. Peter Nelson of the CSIRO Forest Products Division regarding pulp and paper production in Australia and in particular on the use of chlorine dioxide in paper manufacture.  Dr. Nelson referred, inter alia, to "Bleaching of Pulp" by Singh, published by TAPPI, and to a number of other TAPPI publications as being indicative of the state of the art in Australia.

7.On 5th January, 1993, I had an assistant attend the library of CSIRO, Bayview Ave, Clayton to ascertain the accession date and availability of the publications referred to by Dr. Nelson.  Whilst a number of relevant TAPPI publications were located, we were unable to ascertain the accession date of Singh text.

8.On 6th January, 1993, a further draft Statement was prepared, based upon material available to me at that time and including the new material located from my records and obtained from Dr. Nelson.

9.On the same day I received a facsimile from the Canadian Attorneys containing still further information relevant to the prior art available in Australia as at the priority date and to the state of common general knowledge in Australia.  In particular, the Canadian Attorneys provided details of two chlorine dioxide generators operating in Australia.

10.On 6th January, 1993, the Australian Paper Mills plant at Marysville was contacted.  We were unable to speak to anyone who could provide further information on the process being used for chlorine dioxide production at that plant, but was given the name of the General Manager to speak to the following day.

11.On 7th January, 1993, the Australian Paper Mills plant was again contacted but we were advised that the General Manager was still on holidays.  However an assistant provided relevant background information on the plant including the fact that the plant used a "Solvay" process for producing chlorine dioxide.  He also advised that the Australian Pulp and Paper Manufacturers plant at Burnie had a chlorine dioxide generator.

12.On 7th January, 1993, the Australian Pulp and Paper Manufacturers plant was contacted but a caretaker advised that the plant was closed until 13th January.

13.On 7th January, 1993, an application for extension of time in which to file the Statement was lodged since it was not possible to investigate the new information and incorporate the other changes required to the Statement within the initial period.

14.On 8th January, 1993, an assistant attended the Hargrave Library at Monash University, Wellington Road, Clayton and ascertained that the Singh text was available as at the priority date.

15.On 11th January, 1993, a further draft Statement was prepared and sent to the Canadian Attorneys for comment.

16.On 15th January, 1993, the Australian Pulp and Paper Manufacturers mill at Burnie was again contacted and we were provided with details that the process used there for chlorine dioxide production.  Amendments were again made to the draft statement.

17.On 25th January, 1993, I received a facsimile letter from the Canadian Attorneys requesting clarification of some of the points raised in the draft Statement sent to them 11th January, 1993.  A facsimile letter clarifying these matters was sent to them on 26th January, 1993.

18.On 27th January, 1993, the Canadian Attorneys requested amendments to the draft Statement.  These amendments were carried out and a copy of the amended Statement was sent to them on the same day for final approval.  Such approval was necessary, inter alia, since it was a requirement to coordinate the Australian opposition with the cases in other jurisdictions.

19.On 2nd February, 1993, we received instructions from the Canadian Attorneys to file the Statement.  The Statement was served by courier upon the attorneys for the applicant on 4th February 1993 and a copy was filed at the Australian Industrial Property Organisation on the same date."

SUBMISSIONS

At the hearing Mr Jones made the following submissions on behalf of the applicant for an extension of time:

.the reasons necessitating the extension of time have been well set out and are eminently justifiable.

.the extension of time required is only a small one. [This was put by Mr Jones at three weeks, but was actually only one day short of four weeks.]

.the opponent's statement of case is an elaborate document illustrating the amount of work that was necessary and clearly establishing that there is a serious matter to be tried in this opposition - see Kaiser Aluminum & Chemical Corporation v The Reynolds Metal Company (1969) 120 CLR 136.

.a detailed understanding of the minutiae of the process is a requirement for the analysis of this case.

.the fact that there are parallel cases proceeding overseas which are well advanced (particularly, an interference proceeding in the United States) does not mean, as appeared to be the view of the opponent, that somehow these proceedings could be transferred "holus-bolus" into the context of an Australian patent opposition.  Analysis of the available evidence required a lot of effort because of differing requirements in other jurisdictions, and the present case had been particularly onerous due to the quantity of briefing material provided by the instructing Canadian attorneys.  In particular, a lot of research has to be done to establish whether and when prior art documents had been published in Australia, and what had been the relevant common general knowledge in Australia.

.the Christmas holiday period fell in the middle of the one month period allowed for serving the statement of grounds and particulars.

.new information has been provided at the last moment (6 January 1993) by the Canadian attorneys.

.under the new procedures established by the 1990 Act and Regulations, the statement of case is extremely important - it circumscribes the opponent's case, and there is virtually no opportunity to amend it to introduce new significant prior art.

.the statement of case has to be approved by the Canadian attorneys, as the Australian action had to be co-ordinated with those in other jurisdictions.

In response, Mr Blair submitted:

.the use of the term "must" in Regulation 5.4(1) means that the test for granting an extension to the period of one month set down in the regulation is more stringent than what it was in those 1952 Patents Act regulations relating to the serving of evidence.

.the applicant for an extension of time has to make out a proper case for the extension of time - see Erling Vangedal-Nielsen v Commissioner of Patents and Gelphen Nominees (1980) 33 ALR 144.

.what is meant by "in all the circumstances" was considered in Kent-Moore Corporation v Environmental Products Amalgamated Pty Ltd (1992) AIPC 90-915. In that decision it was stated that it is imperative that the person seeking the extension of time provide a full and frank disclosure of the facts which give rise to the need for the extension. This had not been done in the case in suit. In particular, no evidence had been brought forward by the applicant itself (as distinct from its patent attorney) concerning its actions in the events leading up to the need for an extension of time.

.many of the particulars in the belatedly lodged statement of grounds and particulars were known long before the notice of opposition was filed.

.it was established in the case of Borden, Inc. v Elkem A/S (1992) AIPC 90-893 that in the case of common general knowledge only rudimentary details of the common general knowledge relied on need be particularized. Thus details of common general knowledge go to evidence, and not the preparation of a statement of grounds and particulars, and similarly with the location of international publications in Australia and the date of their publication and with comments by experts.

.paragraphs 10 and 11 of the statutory declaration by Mr Jones clearly display that the opponent had in its possession sufficient information on which to base an adequate statement of grounds and particulars, yet it chose not to do so.

.the fact of the applicant having objected to the extension of time may have hastened the serving of the statement of grounds and particulars.

.until there is a clear statement of all the circumstances surrounding this extension of time the Commissioner is not in a position to make an assessment of what is appropriate in all the circumstances.

DECISION

This is the first time an objection to an extension of time to lodge a statement of grounds and particulars has been the subject of a decision.  However, some guidance on how this matter should be approached is afforded by two categories of previously decided cases.  They are

.those in respect of applications for extensions of time to file a notice of opposition or to serve evidence.

.those in which the adequacy of a statement of grounds and particulars is an issue.

The criterion set down for granting an extension of time under the 1952 Act regulations is virtually the same as that under the 1991 Act regulations.  Those criteria are, respectively,

the Commissioner shall not grant the extension of time unless he is satisfied that the extension is justified having regard to all the circumstances of the case

and

the Commissioner must not grant an application for an extension of time unless the Commissioner is reasonably satisfied that an extension of time is appropriate in all the circumstances.

Therefore, considered on this basis alone, the relevance of an authority in the first of the categories referred to above is not affected by it having been decided under the 1952 regulations or the 1991 regulations. An exception to this is that an extension of time to file a notice of opposition is not available under the provisions of Regulation 5.10(2), and can only be obtained under the provisions of Section 223 of the Patents Act 1990.

At the hearing Mr Blair submitted that the test for granting an extension of time of the period set down by Regulation 5.4(1) of the 1991 Patents Regulations is more stringent than the test for granting an extension of time to serve evidence under the 1952 regulations. He based this on the use of the words "must" and "may" in the respective regulations. I disagree. In my view, the use of the word "may" in the 1952 regulations only reflects the fact that the serving of evidence is merely optional in the procedures set down by those regulations, whereas the word "must" in Regulation 5.4(1) reflects the fact that it is essential to serve a statement of grounds and particulars, or otherwise the opposition effectively concludes. The variation in wording does not appear to have any ramifications as regards the periods of time set down in the respective regulations.

However, there is another factor which has altered the way Regulation 5.10(2) extensions of time are viewed, compared with corresponding provisions in the 1952 regulations.  That factor is the altered circumstances occasioned by the interposing of a statement of grounds and particulars between the step of filing a notice of opposition and the steps of serving any evidence.  The consequences arising from this are discussed in detail in Kent-Moore v Environmental Products Amalgamated (supra).  That case was concerned with an extension of time to lodge evidence, which means that there are limitations to its assistance in the present matter.  For example, it proposes a four-part test for the granting of an extension of time to lodge evidence in support, three parts of that test being dependant on the pre-existent statement of grounds and particulars.  Nonetheless, there are several aspects of the Kent-Moore v Environmental Products Amalgamated decision which are useful in deciding the matter in suit.

Probably foremost among these is the emphasis that is placed upon the importance to the opposition process of the statement of grounds and particulars:

"The statement of grounds and particulars is perhaps the key procedure introduced to expedite the determination of oppositions.  The statement sets out the basis of the opposition, and it follows that the opponent's evidence is circumscribed by that statement."

In light of this, I sympathise with the approach taken by the opponent, whereby it clearly felt that it would be prudent to ensure the completeness of its statement of grounds and particulars, notwithstanding the risk imposed by that approach whereby an extension of time was required.

Mr Jones at the hearing cited three cases on extension of time to lodge a notice of opposition which he considered are relevant to the present matter: W R Grace & Co v Betz International Inc, 13 IPR 55, Gansu Research Institution of Chemical Industry v ICI Australia Operations Pty Ltd, 19 IPR 657, and Warner-Lambert Company v Novamont S.p.A. (unreported patent office decision of 8 July 1992 concerning patent application number 617411).  These decisions basically followed the law as laid down by Bowen C.J. in Erling Vangedal-Nielsen v Commissioner of Patents and Gelphen Nominees (supra).  This law was followed and summarized in Kent-Moore v Environmental Products Amalgamated as follows:

1. The Commissioner, before allowing the extension, must be satisfied that the person seeking the extension has made out a proper case justifying the extension.

1. The Commissioner must consider not only the private interests of applicants for patents, and opponents, but also the public interest by ensuring that invalid patents are not granted and that proceedings are not unnecessarily protracted."

I consider this to be a valid statement of the law applying to the present matter.

Kent-Moore v Environmental Products Amalgamated went on to state:

"However, whatever the justification might ultimately be it seems to me that it is imperative that the person seeking the exercise of the Commissioner's discretion must provide the Commissioner with a full and frank disclosure of the facts which give rise to the need for the extension."

At the hearing Mr Jones contended that because an extension of only one month was sought, there is an onus on the party opposing the extension of time to explain why it was disadvantaged by only a short extension of time.  He based this on W R Grace v Betz (supra) which, in relation to costs, states:

"On the other hand though, W R Grace was aware before the hearing that Betz's application was for only one month, and the former offered no reason why it would be disadvantaged because of the extension of time."

I do not agree with Mr Jones' contention.  In looking at "all the circumstances" in matters such as these, the Commissioner is looking at circumstances relating solely to the party seeking the extension.  Clearly, then, the whole onus for justifying the extension lies with that party.

Turning now to the specific circumstances of this case, I note the following positive points in respect of whether the extension is justified:

.as I have already mentioned, the opponent is very much "locked-in" to its statement of grounds and particulars.  Accordingly, there are strong imperatives for it to be both complete and correct.

.there is every indication that this is a serious opposition, and there is nothing to suggest the contrary.

.the applicant in the guise of its patent attorney appears to have been diligent.

.the occurrence of the Christmas - New Year holiday break is, in my opinion, a significant mitigating factor in the present circumstances.

.in my view the period available to an opponent to formulate its statement of grounds and particulars can only be considered to have commenced once the accepted form of the claims was known.

Mr Jones seemed to suggest that there were communication difficulties between Australia and Canada, but I am not able to adopt a position on this without the benefit of more details - in particular, I would need to be assured that any such difficulties were not self-inflicted.

Two of the reasons advanced as to how the extension came to be required cause me some misgivings.  These reasons are, firstly, that extra time was required to establish common general knowledge and, secondly, that extra time was required to ascertain whether and when certain documents had been published in Australia.  I note that these reasons seem pre-eminent amongst those advanced for the extension and accordingly are of considerable significance in this matter.

In the case of the common general knowledge, it is not altogether apparent why there should have been too much difficulty in ascertaining the relevant common general knowledge.  The relevant common general knowledge would only be that limited amount of common general knowledge which has a bearing on the claims.  Furthermore, common general knowledge has been defined in Minnesota Mining and Manufacturing Co v Beiersdorf (Australia) Ltd 29 ALR 29 as:

"the background knowledge and experience which is available to all in the trade in considering the making of new products, or in the making of improvements in old, and it must be treated as being used by an individual a general body of knowledge."

(emphasis added).

It may well be that in some fields it is difficult to find someone who is competent to say whether this or that is common general knowledge.  However, it is somewhat surprising that Mr Jones has had the problem he has in an apparently large industry as the pulp and paper manufacturing industry.  Mr Blair contended that what Mr Jones was in fact doing went to evidence, not the preparation of a statement of grounds and particulars, and having regard to what Mr Jones has stated in his statutory declaration I must agree that there is some support for Mr Blair's contention.

In Borden v Elkem (supra) I stated that in a statement of grounds and particulars it is only necessary to give rudimentary details of common general knowledge.  In most instances that need not extend beyond the elements of common general knowledge which are being relied upon.  Furthermore, it was said in Kent-Moore v Environmental Products Amalgamated (supra) :

"To the extent that the statement of grounds and particulars refers to common general knowledge, there ought to be an expectation that an opponent has good reason to believe that the referred to common general knowledge is in fact so.  There ought not be an expectation that an opponent can refer to matters which "might" be common general knowledge, or can make an ambit reference to common general knowledge, and then engage in a fishing expedition to find that common general knowledge". (emphasis added).

Similar considerations apply to the establishing of if and when certain documents have been published.  Again as Mr Blair pointed out, this seems to be an evidentiary issue.  For example, in Mobay Corporation v Dow chemical Company (1992) AIPC 90-895, the statement of grounds and particulars cited five documents as prior-publications but did not state their publication date, and it was said in the decision:

"Although the particulars are unnecessarily wordy, they do clearly reveal that the ground is based on five documents.  No further particulars are required for these documents."

While I have expressed some misgivings about the reasons given for requiring the extension of time, nonetheless I see sufficient justification in the facts placed before me by the party seeking the extension to warrant allowing the extension of time.

However, before deciding whether or not to grant the extension I must consider the various interests involved in this matter and whether the proceedings will be unnecessarily protracted.  If I allow the extension of time, clearly the interests of the party applying for the extension of time (the opponent in the substantive opposition) will be served.  The interests of the party opposing the extension (the applicant for the patent) can only, I think, be considered to have suffered to the extent of the four week delay in being served with the statement of grounds and particulars.

The question of the public interest in the environment of the new regulations was considered in Kent-Moore v Environmental Products Amalgamated (supra).  It was stated in that case that in relation to the serving of evidence in support the public interest had been reduced substantially by the existence of a statement of grounds and particulars.  The reasoning that led to that conclusion must also apply in the present matter.  [At the hearing Mr Jones contended that a bar-to-sealing procedure based on the statement of grounds and particulars could not be conducted by the Commissioner unless the extension is granted.  This does not seem correct - the bar to sealing procedure does not appear to impose any such fetter on the status of the material which provides the basis of the action - see Re Gould Inc (1989) AIPC 90-560; 13 IPR 644.] On the face of it, this could seem to provide an anomalous situation, in that it is conceivable that an extension of time to serve a statement of grounds and particulars could be sought in a situation where a statement had not yet been served. In that case it could seem as though the person seeking the extension of time would be advantaged compared with if the statement of grounds and particulars had been served. That would be a misapprehension, though, since any advantage gained on that basis would be more than outweighed by the extent to which it would be detrimental to the determination of whether the extension was justified and to the patent applicant's interest.

In my view, the public interest lies with the extension of time being granted.  To refuse the extension would be to cut out an eager and able opponent and to replace an inter partes proceeding with a less rigorous ex parte procedure.

It follows from what I have said previously that I do not regard the extension being sought as unreasonably protracting these proceedings.

The final issue I need to address is the concern Mr Blair expressed about the failure to get a full and frank disclosure of the facts necessitating the present extension.  In particular, Mr Blair pointed out that there was no evidence from the applicant of its role in what had transpired.  Of relevance to this is the following portion of Mr Jones' statutory declaration:

"18.On 27th January, 1993, the Canadian Attorneys requested amendments to the draft Statement.  These amendments were carried out and a copy of the amended Statement was sent to them on the same day for final approval.  Such approval was necessary, inter alia, since it was a requirement to coordinate the Australian opposition with the cases in other jurisdictions.

19.On 2nd February, 1993, we received instructions from the Canadian Attorneys to file the Statement."

In light of this, Mr Blair's concern is, to a degree, justified.  It is apparent from what Mr Jones says that the Canadian attorneys played a significant role in the events which led up to the extension of time being requested.  Had this case for an extension of time been a border-line one, then this would have taken on a heightened significance.  However this is not a border-line case - the known facts of the matter are such that it is fairly clear-cut that an extension should be granted.

Therefore, I am prepared to accept Mr Jones declaration as being a sufficient exposition of the opponent's actions.

CONCLUSION

While Regulation 5.4(1) sets down a period within which the action of serving a statement of grounds and particulars must be taken, Regulations 5.10(2) and 5.10(5)(c)(ii) clearly contemplate the extending of that time provided it is appropriate in all the circumstances.  I have found that the applicant for the extension of time has made out a case sufficiently justifying the extension of time being granted, and, on balance, I regard the interests of the parties, and of the public, as being in favour of the extension of time.  I have no basis to conclude that the proceedings will be unreasonably protracted.

Accordingly, I grant an extension of time to 4 February 1993.

The period set down in Regulation 5.8(1) for lodging evidence in support and for requesting dismissal of the opposition commences from the date of this decision.

COSTS

Both parties asked for an award of costs. Mr Jones asked that the opponent be awarded "full costs, as between attorney and client", rather than the scale of costs set down by Schedule 8 of the Patents Regulations 1991. Mr Jones contended that the opposition to the extension of time had been vexatious because of the size of the extension required and the nature of the reasons given prior to the hearing for needing the extension.

Although the applicant for an extension of time has brought forward additional facts in its statutory declaration which was filed subsequent to the application for an extension of time, the matter contained in that statutory declaration is merely an elaboration of the circumstances and grounds stated in the application for an extension of time.  Accordingly, I see no reason for varying the normal practice in actions of this type that costs should follow the event.  However, I am not prepared to accede to Mr Jones' request that there be a special award of costs.  In my view, the party opposing the extension has raised valid concerns and its opposition to the extension could in no way be considered frivolous or vexatious.

I award costs as per Schedule 8 of the Patents Regulations 1991 against Eka Nobel AB.

(E. KNOCK)
Delegate of the Commissioner of Patents

Patent attorneys for the applicant: Griffith Hack & Co.,
  Melbourne

Patent attorneys for the opponent: Phillips Ormonde &
  Fitzpatrick
  Melbourne

official notice

decision of a delegate of the commissioner of patents

Application        :   No. 628254 in the name of EKA NOBEL AB

Title:   Process for Production of Chlorine Dioxide

Action: Objection to an application under Regulation 5.10(2) of the Patents Regulations 1991 for an extension of time to serve a statement of grounds and particulars under Regulation 5.4(1)

Decision:     Issued            .  Extension of time to serve statement of grounds and particulars granted.  Requirements of Regulations 5.4(1) and 5.10(2) discussed.