Exxon Chemical Patents Inc v the Dow Chemical Company

[1997] APO 3

official notice

decision of a delegate of the commissioner of patents

Application  :          No. 656498 in the name of EXXON CHEMICAL PATENTS INC.

Title:          Supported monocyclopentadienyl transition metal olefin polymerization catalysts.

Action:          Opposition by THE DOW CHEMICAL COMPANY, application by the applicant for an extension of time of 3 months to serve evidence-in-answer and objection thereto by the opponent; hearing.

Decision:          Issued            .

Abstract:          On a balance of all the circumstances, a reasonable case for the extension of time sought was made out.

patents act 1990

decision of a delegate of the commissioner of patents

Re:Patent Application No. 656498 by EXXON CHEMICAL PATENTS INC, opposition thereto by THE DOW CHEMICAL COMPANY, an application under regulation 5.10(2) of the Patents Act 1990 for an extension of time to serve evidence in answer, and objection thereto.

background

Patent application no. 656498 was originally an International Application, filed on 13 September 1991;  it entered the national phase as AU application no. 86518/91 and was advertised accepted on 2 February 1995.   A notice of opposition was lodged on 2 May 1995, the statement of grounds and particulars was served on 1 August 1995, and evidence-in-support was completed by 19 April 1996, after two extensions of time had been allowed to serve the evidence-in-support.

The applicant was granted one extension of time, unopposed, to file its evidence-in-answer, but a second application for an extension from 22 October 1996 to 22 January 1997 was objected to by the opponent on 7 November 1996.

THE hearing

The applicant was notified of the opponent’s objection in a letter from the Office dated 12 November 1996; it was also proposed that a hearing be set down soon to decide the matter. In a letter dated 21 November 1996, the applicant’s attorney requested that the hearing not be set down before 6 January 1997, because of his other work commitments and arrangements already made for annual holidays.  In a letter dated 21 November 1996, the opponent’s attorney requested that a hearing be set down as soon as possible because it is in the public interest that the opposition is not unduly delayed. The opponent’s attorney pointed out that paragraph 8.5.6 of the Manual of Practice and Procedure Volume 3 indicates that parties should expect that where an application for extension of time is the subject of an objection..... “the parties should expect that a hearing will be set for a date within 14 to 21 days of the filing of the objection.”

After further telephone discussions between the attorneys and the opposition clerk, a suitable date for the hearing could not be agreed, so a delegate of the Commissioner considered the matter and the parties were advised in an Office letter dated 28 November 1996 that

• the hearing would be set down for 11 December 1996, and that

• “a deferral from that date will only be considered on the basis that, should the extension         not be found to be justified, evidence-in-answer served after 11 December 1996 will            NOT be admitted into the proceedings.”

An official hearing notice was issued to both parties on 29 November 1996.

The opponent was represented at the hearing on 11 December 1996 by Mr Ken Hamilton, patent attorney with Phillips Ormonde & Fitzpatrick.

At 3.45pm on 10 December 1996, I received a brief facsimile letter from the applicant’s patent attorney, Mr Richard Baddeley, with Watermark in Perth. (The fax was sent at 11.52am). The letter indicated that, although the hearing notice was received in his firm’s office on the 3rd or 4th of December, nevertheless, “due to an error or omission on [his firm’s] part” the hearing notice was not received by Mr Baddeley until the 10th of December.  He thus sought a deferral of the hearing and offered to pay the opponent’s costs.  I considered this request, discussed the matter with the opponent’s attorney ( he confirmed that he had made arrangements for the hearing the next day), and I decided that it was not appropriate to cancel the hearing at such late notice.

At 9.30am on the morning of the hearing (which commenced at 10am), I received a second facsimile letter from Mr Baddeley. (The fax was sent at 5.12pm on the previous day). This letter further explained his circumstances viz:

• As well as not receiving the hearing notice until the day before the hearing, he also did not receive the Office’s letter of 28 November until the day before the hearing.

• The hearing notice and the letter of 28 November were incorrectly referenced; this caused the correspondence to be transferred first from Watermark’s Perth office to its Melbourne office and then back to Mr Baddeley in Perth.

Mr Baddeley also suggested that the said correspondence from the Patent Office “was not in any event received until the 3rd and 4th December 1996, less than the 10 day notification period usually extended by the Office.”  He further indicated that due to pressures of work previously referred to, and due to the abovementioned circumstances, he would not be able to attend the hearing.

Regulation 22.23(1) reads:

“The Commissioner must give notice of the date, time and place of a hearing before him or her to each party to the hearing at least 10 days before the day when the hearing is to begin.”

Mr Baddeley’s circumstances were given some consideration, and in a letter dated 16 December 1996 from the opposition clerk, the Patent Office advised as follows:

“With regard to your submission that you had not received 10 day’s notice of the hearing, the Commissioner’s delegate comments as follows:
           The hearing notice is dated 29-11-96, this was 10 days before the scheduled hearing, so the requirements of Regulation 1.3(4) have been met.
           However, whilst complying with R.1.3(4), and with the requirement to address the hearing notice to the applicant’s address for service, we recognize that the wrong reference number was used and apologise for the inconvenience caused.

The delegate is of the view that for the sake of natural justice, the applicant should be given an opportunity to be heard on the matter of the proposed extension of time to file evidence-in-answer. However the date of 6-1-97 that you originally proposed is not appropriate because, inter alia, it is too close to the date of the proposed extension, thus causing undue delay in the opposition proceedings.

Thus a hearing .... has been set down for 30 December 1996.......

In my letter of 28 November 1996 you were advised that:

‘A deferral from [the hearing date of 11-12-96] will only be considered on the basis that, should the extension not be found to be justified, evidence-in-answer served after 11 December 1996 will NOT be admitted into the proceedings.’

The delegate has decided that this condition now applies since, in effect, the applicant has been granted a deferral of the hearing date.

The opponent has presented its case at the hearing on 11-12-96, but, if it so chooses, it may also appear at the hearing set down for 30-12-96.”

Regulation 1.3(4) reads:

“Unless the contrary intention appears, if a document is given to a person by the Commissioner or the Patent Office, the document is taken to have been given to the person on the day on which the document is dated by the Commissioner or the Office.”

Neither party attended the hearing of 30 December 1996, but written submissions in support of the application for extension of time were filed by the applicant’s attorneys. A copy of these written submissions was forwarded to the opponent for comment, and a copy of the opponent’s written submissions presented at the hearing of 11 December were forwarded to the applicant for comment.

The applicant’s submissions fall into two parts; the first part relates to the hearing, the second part to the extension of time. In the first part it is alleged that the hearing of 11 December 1996 was invalid for the following reasons:

Regulation 22.23(1), which provides 10 days notice for each party to a hearing, is clear and unambiguous and is not qualified by Regulation 1.3(4).  Regulation 22.23(1) does express a “contrary intention” to R.1.3(4), and Office conduct reflects that R.1.3(4) is not ordinarily applied in the interpretation of R.22.23(1).

Regulation 1.3(4) should not be applied to the 10 days notice of hearing period because to do so “would offend against constitutional requirement that legislation not discriminate between residents in several states”; parties in some states would have longer to prepare their case than parties in other states.

It is Patent Office practice to telephone parties to a hearing and sometimes to notify parties of a hearing by facsimile (as was done for the hearing set down for 30 December 1996 in this case).

The hearing notice was dated the 29th November; this was only 12 actual days before the hearing on 11th December. Allowing for only 2 days “postal delay” is insufficient. The hearing notice was not received by Watermark’s Perth office until the 4th December, which was less than 10 days before the hearing.

The applicant also submitted:

That, if the hearing of 11th December was invalid, then the hearing of 30th December was also invalid because it is merely a continuation or deferral of an invalid hearing.

That the condition applied to the admissibility of evidence-in-answer is a denial of natural justice to the applicant because the deferral of the hearing was due to lack of compliance with the regulations and to incorrect referencing.

I make the following observations and comments on matters relating to the hearing.

I do not agree that R.22.23(1) expresses a contrary intention to R.1.3(4). In my view these regulations may operate together;  in the present circumstances R.22.23(1) clearly specifies an action required of the Commissioner: he must “give notice ...”, this action is effected by sending a hearing notice to the party concerned, and R.1.3(4) specifies when the notice “is given” to the party concerned. These requirements provide some administrative certainty to the notification process; to do otherwise would be inefficient and an unnecessary burden on clients, eg. if the Patent Office had to be notified of the date of actual receipt of all correspondence.

In this case the parties were contacted by telephone regarding a suitable date for setting down the hearing, but they could not agree; this led to the delegate’s decision communicated in the Office letter of 28th November. It is not normal practice to notify parties of a hearing by facsimile.

Whether the hearing notice should have been sent earlier to allow for more than 2 days postal delay to Perth is a moot point, but I do not think it is worth pursuing now because this possible reason for Mr Baddeley not receiving the notice earlier is insignificant when compared with the other stated reason, ie. the incorrect reference on the hearing notice, which caused it to be sent from Watermark’s Perth office to its Melbourne office.

The abovementioned Patent Office letter of 28th November was sent and received one day earlier than the official hearing notice; this letter clearly indicated that the hearing was to be set down on 11th December, so this letter could be construed as sufficient notice to comply with R.22.23(1).

On the matter of the incorrect reference, I note firstly that the Patent Office sent the hearing notice to the Perth office of Watermark, which was the correct address for service, and secondly that the heading on the notice did address the correct subject matter of the opposition; so I do not think the Patent Office should carry all the blame for the notice being sent to Watermark’s Melbourne office because of the incorrect reference mark. One could reasonably expect that the actions of staff dealing with incoming correspondence at Watermark’s office might be determined by other factors as well as reference marks on the correspondence.

The Patent Office recognized its error in applying the wrong reference mark, and compensated for this error by deferring hearing the applicant to a date 19 days after the original hearing date. Thus the applicant has received a due degree of natural justice in the circumstances.

The hearing set down for 30th December was set down according to proper procedure, the applicant’s attorney seems to have received notice in sufficient time, and it is acceptable practice, although not common, to hear parties to an inter-parte matter at different times. I do not agree that the original hearing of 11th December was “invalid”, as suggested by Mr Baddeley, but even given that position, I do not agree that the 30th December hearing was invalid because it was a continuation of the first hearing. Inter alia, if this was the case, no party could ever get a valid follow-up hearing if for any reason an original hearing on the same matter was found to be invalid.

The abovementioned condition on the admissibility of evidence-in-answer, set by the Commissioner’s delegate and communicated in the Office’s letter of 28th November, seems reasonable in the circumstances at that time. It is generally in the interest of both parties and the public to minimise delay in opposition proceedings, so in a direction made under R.5.10(1)(a) relating to the conduct of proceedings it may sometimes be appropriate to impose a condition to encourage one or both parties to minimise further delay.

THE extension of time

The circumstances set out in the application for the extension of time are summarised as follows:

The applicant has reviewed the evidence-in-support and has been considering the importance of the patent application to its commercial strategy. Withdrawal of the application has been considered.

Preparation of the evidence has commenced; a declarant, Professor Bercaw, has been identified.

The applicant’s response in this opposition should be consistent with its response in concurrent opposition to co-pending application 643237.

The opponent’s submissions are summarised as follows:

The documents relied on in the evidence-in-support are the same as those relied on by the opponent in the opposition to 643237;  “the applicant has been aware of this art since 28 July 1995.”

Delay in the opposition to 643237 is due to amendments proposed by the applicant.

The applicant has not established that reasonable steps have been made to prepare its evidence.

The onus of justifying the extension is the responsibility of the person seeking the extension. It is not relevant that the other party has previously been granted an extension of time to serve evidence. See the Commissioner’s decision in Baroid Drilling Fluids v Fina Research, 13 December 1994, re application 634207, not reported.

“Commercial importance” is not unique to opposition proceedings; the applicant has had enough time to consider this issue.

“The delay in proceedings has an adverse affect on the commercial decisions that can be taken by the opponent...”

The applicant’s submissions are summarised as follows:

The opponent had 2 extensions of time to serve its evidence-in-support, the applicant has only had one extension so far for its evidence-in-answer, the reasons given by the opponent for its extensions were similar to those given for the present application, therefore the opponent has “not suffered any relative injustice vis-a-vis the applicant”.

The opponent’s interests are not affected by the extension sought and its objection is merely a “tactical manoeuvre”.

Voluminous evidence-in-support:  “the nature and volume of evidence-in-support was at the discretion of the opponent.....”   The Commissioner’s decision in Wellcome Foundation v Peptide Technology (1989) AIPC 90-573 provides basis for allowance of an extension where there is voluminous evidence-in-support.

“The availability of Prof. Bercaw has become questionable..... though other potential declarants have been identified”.

Consistency of evidence with the concurrent opposition to 643237 will assist resolution of proceedings.

DECISION

Regulation 5.10(2) enables the Commissioner to grant an extension of time in opposition proceedings.  From regulation 5.10(5) I note that an extension must not be granted unless I am reasonably satisfied that the extension of time “is appropriate in all the circumstances.”

In determining what factors must be considered I am guided by the recent decision of the Federal Court Ferocem Pty. Ltd. v. Commissioner of Patents, (1994) AIPC 91-057. In this decision Burchett J. said:

“The determination of an application for an extension of time under reg. 5.10(2) involves a balancing exercise, in which competing considerations must be taken into account.  There are the interests of the persons directly concerned in the application and opposition in question.  There are also public interests, which are not necessarily all ranged on the same side.  They include the expeditious disposal of matters in the Patent Office, and questions of cost, of efficiency, and of insistence upon proper professional standards being maintained by those who deal with the office.  But they also include, as Kitto J. pointed out in Kaiser Aluminium & Chemical Corporation v The Reynolds Metal Company (1969) 120 CLR 136 at 143, ‘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.’ This proposition was cited, by Bowen CJ in Vangedal-Nielsen [33 ALR 144] (at 150), where he also set out some of the considerations involved upon the application for an extension of time.”

It is clear from the wording of the Act and from the Ferocem decision that I should consider all the circumstances of this case.

The submissions before me suggest that it is in the applicant’s interest that the extension be granted because: (1) it should allow the applicant time to clarify whether suitable experts are available to support its case and whether the application is worth pursuing, and (2) assuming the applicant is serious about contesting the opposition, it will allow some simplification of preparation of the evidence for the present opposition and for the opposition to application 643247.

I note that the circumstances in the Ferocem case related to preparing evidence for both the opposition and for related proceedings in the Federal Court, so I think is appropriate to infer that such circumstances can be a valid reason for granting an extension of time. Therefore, in the present case, I think the applicant’s circumstances relating to the preparation of evidence for two oppositions should be given some weight in my decision. 

It may well be the case that the applicant has not been as diligent as it could have been in expeditiously prosecuting the opposition to date, but there is a considerable amount of evidence‑in-support. It is true that the Statement of Grounds and Particulars provides the applicant with some idea of the case it has to answer at an early stage in the opposition, but there are limits on how much of the evidence-in-answer can be prepared based on a Statement alone; since some of the evidence-in-support is in the form of declarations by the opponent’s experts and is not pre-empted in the Statement. I note also that the Statement is some 15 pages long; suggesting in itself that the applicant has a considerable case to answer.

The opponent has expressed concern about delay in the proceedings and indicated that it “has an adverse effect on the commercial decisions that can be taken by the opponent...” Because there is no further elaboration of this statement I assume that it is a only a general concern and that there is no particular commercial decision which is being delayed. I think it is appropriate to give this matter some weight in taking all matters into account.

Generally, I am of the opinion that the applicant’s case for an extension is not very convincing, however, the opponent’s objection is at least as unconvincing, so a sensitive scale is needed for the “balancing exercise” referred to by the Federal Court in the Ferocem decision. The public interest in this matter is minimal; there is no indication that any third parties are involved for example, and “expeditious disposal” of the matter by the Patent Office is hardly affected by one 3‑month extension. In my view the scale is tipped in the applicant’s favour mainly because of the complications of co-pending oppositions and the voluminous evidence-in-support. Also, it is of some minor significance that the proposed extension extends over the Christmas holiday period where people involved in the matter may not be available; so an extension over this period would generally have less delay impact than an extension at other busier times of the year.

Taking all the circumstances into account, I am reasonably satisfied that the 3-month extension of time from 22 October 1996 to 22 January 1997 is appropriate. I therefore grant the extension of time.

COSTS

Following the usual practice of costs following the event, I award costs against the opponent the Dow Chemical Company.

John Welsh
Delegate of the Commissioner of Patents

Patent attorneys for the applicant  :  Watermark, Perth.

Patent attorneys for the opponent  :  Phillips Ormonde & Fitzparick, Melbourne.