EWT Trade and Business Consultants NZ Limited v ACP Publishing Pty Limited, and News Limited
[2006] APO 17
•9 May 2006
ABSTRACTS OF DECISIONS
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 758954 in the name of EWT Trade and Business Consultants NZ Limited
Title :Placing Advertisements in Publications
Action :Applications for extensions of time in which to serve evidence in reply by ACP Publishing Pty Limited (Opponent 4) and News Limited (Opponent 6), and objections thereto by EWT Trade and Business Consultants NZ Limited
Decision: Issued 09 May 2006 .
Abstract
EWT have been in settlement negotiations with both News and ACP.
ACP’s primary reason to justify the extension of time has been the continuation of settlement negotiations between themselves and EWT. It was found that ACP had not made out a proper case justifying the extension, as no contact regarding the settlement negotiations had occurred for four months.
Following the Commissioner’s direction of 8 February 2006, it was noted that if ACP was unable to file any evidence in reply, it could rely on the evidence filed by the other opponents in the opposition. Given that there are seven other opponents who are currently opposing the application, it was considered that any evidence in reply filed by ACP is unlikely to be of any significance.
Given the length of the delay to date, the public interest and the interests of both parties favours closing off the period for serving evidence so that the opposition can proceed in an expeditious manner on its own merits. Under the circumstances, it was appropriate to grant a short extension of time (per Ferocem at 248), allowing ACP seven days from the date of this decision to serve any evidence in reply it had at hand.
As a result of their negotiations with News, EWT withdrew their opposition to New’s application for an extension of time, and agreed that News could have until 6 May 2006 in which to serve evidence in reply. Accordingly, News was granted an extension of time from 6 March 2006 to 6 May 2006 in which to serve evidence in reply.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re: Patent Application No. 758954 by EWT Trade and Business Consultants NZ Limited; applications for extensions of time in which to serve evidence in reply by ACP Publishing Pty Limited (Opponent 4) and News Limited (Opponent 6), and objections thereto by EWT Trade and Business Consultants NZ Limited.
BACKGROUND
1. EWT Trade and Business Consultants NZ Limited (“EWT”) filed patent application 758954 (19761/01) on 6 December 2000 through the provisions of the Patent Co-operation Treaty. The application claims priority from two NZ patent applications, the earliest of which was filed on 6 December 1999. Following examination, the application was advertised as accepted on 3 April 2003.
2. Twenty parties filed notices of opposition. Subsequently, one opposition was dismissed for failure to serve a statement of grounds and particulars and eleven oppositions were withdrawn. ACP Publishing Pty Limited (“ACP”) and News Limited (“News”) are two of the eight remaining opponents. ACP and News served their statements under regulation 5.4 of the Patent Regulations on 30 September 2003 and 1 October 2003, respectively. Evidence in support was completed by ACP in November 2004 and by News in December 2004.
3. On 27 August 2004 a delegate of the Commissioner issued a direction that “the period for the applicant to serve evidence in answer will commence from the last date in which evidence in support is completed on all oppositions”. Following an unopposed extension of time, EWT completed service of its evidence in answer upon ACP and News in June 2005.
4. On 17 January 2006, another of the opponents, Quickcut Pre Press Network Pty Ltd (Opponent 3) wrote to the Commissioner, proposing that they be allowed to rely on evidence filed by all other opponents. Accordingly, on 8 February 2006, a direction was made that evidence which was served in any of the oppositions was deemed to be served in the other oppositions. In the event that any of the oppositions is withdrawn, the remaining opponents would be able to rely on any evidence already served by the other opponents.
5. After two unopposed extensions of time, News applied on 6 March 2006 for a third extension until 6 June 2006 in which to serve evidence in reply. Similarly, after two unopposed extensions of time, ACP applied on 7 March 2006 for a third extension until 8 June 2006 in which to serve evidence in reply. EWT objected to both of these extensions.
6. The applicant's oppositions to the extensions of time in which to serve evidence in reply was heard in Canberra on 12 April 2006. Mr John Gibbs, patent attorney of Phillips Ormonde & Fitzpatrick represented the applicant, EWT. Mr Philip Kerr, solicitor of Allens Arthur Robinson, advised that News did not intend to appear and would instead rely on the written submissions dated 9 April 2006. Mr Chris O’Sullivan, patent attorney of FB Rice, advised that ACP would not attend the hearing or make any formal written submissions.
7. Immediately prior to the hearing, Mr Gibbs informed me that following recent negotiations, EWT had withdrawn their opposition to New’s application for an extension of time. The parties had agreed that News could have until 6 May 2006 in which to serve evidence in reply. Accordingly, as a consequence of this agreement between EWT and News, I allow News an extension of time until 6 May 2006 in which to serve evidence in reply. Consequently, the hearing was limited to considering the application for an extension of time by ACP.
THE APPLICATION FOR AN EXTENSION OF TIME
8. ACP set out the following circumstances in its application for an extension of time in which to serve evidence in reply:
“Settlement negotiations remain in train. In addition, the withdrawal of other of the opponents (and the Commissioner’s recent direction concerning evidence) requires us to review the evidence that has been served by the other opponents in order to identify and rectify any gaps which now need to be plugged before completing our Evidence-in-Support. (sic)”
THE RELEVANT LAW
9. The requirements for granting an extension of time to serve evidence in reply are set out in regulation 5.10(2) which states:
(2)The Commissioner may 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 5.3AA, paragraph 5.4(a) or subparagraph 5.8(1)(a)(i)):
(a) on the application of a party in the approved form; and
(b) on such reasonable terms (if any) as the Commissioner specifies; and
(c) after the party has served a copy of the application on the other party.
10. This provision must be read in conjunction with regulation 5.10(5):
(5)The Commissioner must not give a direction under subregulation (1) or grant an application under subregulation (2) or (4) unless the Commissioner:
(a) …
(b) …
(c) in either case:
(i) gives the parties a reasonable opportunity to make representations concerning the application or proposed action; and
(ii) is reasonably satisfied that a direction, an extension of time or the serving of further evidence is appropriate in all the circumstances.
11. The law on extension of time provisions, and more specifically the law on regulation 5.10 has been considered by the Federal Court in Ferocem Pty Limited v. Commissioner of Patents (1994) 28 IPR 243, A Goninan and Co Ltd v Commissioner of Patents and Another (1997) 38 IPR 213, and National Starch & Chemical Company v Commissioner of Patents (2001) 50 IPR 398. It is clear from these judgments that regulation 5.10 confers a broad discretion, which cannot be reduced to an imperative compliance with particular requirements. On the contrary, it is necessary to give proper, genuine and realistic consideration to all relevant aspects of the case.
12. Relevant aspects include the reasons for the delay, the public interest and the interests of the parties, and I will address each of these factors in my decision.
SUBMISSIONS
13. EWT made extensive submissions, and I will refer to these where appropriate in the body of my decision.
DISCUSSION
Explanation of the delay
14. From ACP’s application filed on 7 March 2006, it seems that the primary reason provided to justify the extension of time has been the continuation of settlement negotiations between the opponent and EWT. However, though some progress had been made, Mr Gibbs observed that the likelihood of any settlement was low. In particular, a chronology of the negotiations to date indicates that no progress has been made for several months:
·Settlement negotiations commenced on 28 September 2005
·A draft settlement agreement was provided by EWT to ACP on 24 October 2005
·On 28 November 2005, EWT wrote to ACP advising that, as no response had been received, any further extensions of time would be opposed if significant progress was not made in the settlement negotiations
·On 8 December 2006, ACP provided a response to the draft settlement agreement
·On 28 December 2005, EWT responded with proposed new terms
·Since then, there has been no further correspondence on the subject of settlement
15. According to EWT, as “…nothing has been done in regard to the settlement negotiations by [ACP] over the course of the past three month period, then this should not be regarded as a ground for granting the extension”.
16. Though there have been several recent decisions in which the genuine belief that negotiations were taking place has been a factor justifying an extension of time (see Race Lotto v AWA Limited [1998] APO 72, Eli Lilly and Company v Amgen Inc [2000] APO 16 and Boral Resources (NSW) Pty Limited v BST Holdings Pty Limited [2003] APO 46), I have no evidence before me to indicate that ACP hold such a belief. On the contrary, the lack of communication by ACP tends to suggest, at best, a profound indifference to the settlement negotiations. At worst, it indicates that the settlement negotiations have broken down irretrievably.
17. I also note that there is nothing before me to confirm that negotiations are ongoing or that an agreement can be expected in the near future. Given these circumstances, I would expect a prudent opponent would be preparing their evidence in reply. In fact, I can see no reason why the preparation of evidence could not have run concurrently with any negotiations. As far as I am aware, there was no practical reason which prevented the opponent from preparing their evidence during the period of the past two extensions.
18. As a further explanation for the delay, ACP stated on the application for an extension of time that there is a need to review the evidence in order to identify and rectify any gaps. It would appear that these gaps are due to the withdrawal of other opponents and the Commissioner’s direction allowing each opponent to rely on evidence filed by each other opponent.
19. Mr Gibbs noted that no opponents had withdrawn between 8 December 2005 and the filing date of ACP’s third application for an extension of time on 7 March 2006. Moreover, it was contended that the Commissioner’s direction did not provide any logical reason for the delay, as evidence in reply should merely rebut evidence in answer. Any gaps were therefore of the opponent’s own making.
20. I agree with Mr Gibbs’ views. I fail to see how the withdrawal of any opponent could adversely affect the preparation of ACP’s evidence in answer when, presumably, this is being conducted independently from any other opponent. Furthermore, the fact that ACP can now rely on the evidence of the other opponents would have reduced the size of any hypothetical gaps in their evidence, not increased them. It is also unclear why any gaps in the evidence, if indeed there are any, were not appreciated by ACP at the time that evidence in support was finalised in December 2004.
21. Mr Gibbs also noted that no evidence in reply had yet been filed by ACP, and that there appeared to be little prospect of any evidence in reply being filed in the near future. ACP has not provided any detailed explanation as to why they have not served any evidence so far, or why they would require a further three months in which to do so. Neither has ACP provided an undertaking that evidence in reply would be completed within the extension currently sought. In the present case, the progress of the opponent is clearly open to criticism, as they do not appear to be taking seriously either the settlement negotiations or the gathering of evidence.
22. The absence of any apparent urgency on the part of the opponent is of particular concern. The Commissioner has an expectation that all parties to an opposition proceeding will prepare their evidence in a timely manner and allocate sufficient resources to ensure that this is done. I am not satisfied that ACP has done so. As no further reasons justifying the extension have been forthcoming, I conclude that ACP has not provided a satisfactory explanation for the delay in the serving of evidence in reply.
23. However, the Ferocem case shows that while the reasons for requiring the extension are a relevant consideration in reaching a decision, a satisfactory explanation is not a mandatory requirement.
The public interest
24. The public interest calls for a balance between the requirements that oppositions be dealt with expeditiously and economically, and that a serious opposition be dealt with on its merits (Ferocem (supra) and Goninan (supra)).
25. The orderly progress of opposition proceedings is an important factor relevant to the public interest, and Mr Gibbs argued that opposition matters should be disposed of expeditiously. This issue was considered in Associated Octel Co Limited v ExxonMobil Chemical Patents Inc (2003) AIPC 91-870 which stated:
“…I consider that the primary responsibility of the Commissioner is to ensure that the evidence in opposition proceedings is provided in as short a time as is reasonably possible, consistent with ensuring that the parties have every reasonable opportunity to provide full evidence in support of their case, and upon the insistence of proper professional standards.”
26. Though this comment was made in the context of a request to serve further evidence, I believe that it applies equally to all stages of the opposition process. I accept that proceedings should not be unnecessarily protracted. The fate of the application has been in a state of uncertainty for a considerable time, and ACP has shown minimum evidence of activity during the total period of extension granted to date in which to prepare evidence in reply. Moreover, ACP has requested yet another period of extension merely in the hope that the matter will be settled during that time. The implication here is that if the matter is not resolved by 8 June 2006, ACP may well require an extension beyond that date to enable the service of its evidence to be finalised. It would not in my view be in the public interest to continually grant extensions of time on this basis.
27. Mr Gibbs also noted that the current requests would extend the total time allowed for evidence in reply to twelve months, and that this would be double the amount of time that had been required to file evidence in answer. Mr Gibbs contended that producing evidence in reply should be a shorter task than evidence in answer, and that the three months allowed in the regulations should be sufficient for routine preparation of evidence in reply.
28. I note that the regulations allow the same amount of time for filing the evidence in reply as for the evidence in answer, with provisions for extending the time in each case. Notwithstanding this, I agree with Mr Gibbs that, in general, preparation of evidence in reply should normally be quicker as the opponent is more fully aware of the issues involved and is restricted to replying to the evidence in answer. The opponent has previously had two extensions of time, and I am mindful that, if granted, a third extension would cause a further delay of three months before the substantive hearing. This cannot, in my view, be characterised as expeditious disposal.
29. It is clear from the National Starch (supra) decision that the significance and relevance of the evidence sought to be adduced is an important consideration. Unfortunately, I have no evidence or submissions on this point by ACP. On this issue Mr Gibbs argued that it is doubtful ACP could provide any evidence that is likely to contribute to a more just or correct decision.
30. Following the Commissioner’s direction of 8 February 2006, I note that if ACP was unable to file any evidence in reply, it could rely on the evidence filed by the other opponents in the opposition. Given that there are seven other opponents who are currently opposing the application, I am willing to accept Mr Gibbs’ contention that any evidence in reply filed by ACP, though possibly relevant, is unlikely to be of any significance.
31. Accordingly, I believe that the public interest in the present case would best be served if the matter proceeded to the substantive opposition as quickly as possible.
Interests of the Parties
32. Mr Gibbs stated that any further delays before the substantive opposition would not only affect EWT but all other parties involved in the opposition. I accept that EWT could be disadvantaged by a further protraction of proceedings if I were to grant the extension now sought, and that EWT’s interest in an efficient resolution of the oppositions counts against the extension.
33. The interests of the opponent clearly lie in obtaining the extension in order that it may have the opportunity to serve evidence in reply. However, in the present case the facts indicate that the opponent's case would not be seriously prejudiced if I were to refuse the extension and preclude it from adducing evidence to address the matters raised in the evidence in answer.
34. In this light I think the interests of the applicant in having the matter determined as quickly as possible weighs against granting the full extension of time sought. Nevertheless, it is important to consider if a limited extension should be allowed, so that the opponent who may have assumed some extension would be granted will not be shut out entirely from presenting evidence that may be immediately available. This is certainly the approach advocated by Burchett J in the Ferocem decision. Indeed, Mr Gibbs suggested that a short extension of time in which ACP could serve any evidence readily at hand is probably appropriate in the present case.
DECISION
35. I have found that ACP has not adequately discharged the onus on it to make out a proper case justifying the delay. In the present case, the conduct of the opponent suggests that they are not taking seriously either the settlement negotiations or the gathering of evidence. I have also found that the balance of the public interest favours closing off the period for serving evidence so that the opposition can proceed in an expeditious manner on its own merits. Accordingly, I conclude that the extension sought by ACP is not appropriate in all the circumstances.
36. This aside, I think it is appropriate to allow a short extension of time for ACP to serve any evidence it has available (per Ferocem (supra) at 248). The grant of a short extension of time avoids completely shutting the opponent out in this case where the extension of time is otherwise not justified. The short extension may also enhance the determination of patent validity, while at the same time avoiding any undue protraction of proceedings.
37. I therefore allow ACP seven days from the date of this decision to serve whatever evidence in reply it has available.
38. For the sake of completeness, I will note that EWT have withdrawn their opposition to New’s application for an extension of time, and agreed that News could have until 6 May 2006 in which to serve evidence in reply. Accordingly, I grant News an extension of time to serve evidence in reply from 6 March 2006 to 6 May 2006.
COSTS
39. The power of the Commissioner to award costs is discretionary, so I must take into account all relevant considerations.
40. In the present matter the opponent has succeeded in obtaining a short extension of time, despite the fact that it did not make out a proper case to justify the extension sought. Instead, the public interest in determining the opposition on its merits is a significant consideration in this decision. Consequently, it is not appropriate to award costs against EWT. I believe it is more appropriate to award costs against ACP.
R. W. J. Finzi
Delegate of the Commissioner of Patents
09 May 2006
Patent attorneys for the applicant: Phillips Ormonde & Fitzpatrick, Melbourne
Patent attorneys for ACP (opponent 4): FB Rice & Co, Sydney
Patent attorneys for News (opponent 6): Allens Arthur Robinson, Sydney
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