ExxonMobil Chemical Patents Inc v the Associated Octel Company Limited
[2003] APO 3
•6 February 2003
OFFICIAL NOTICE
DECISION OF A DEPUTY COMMISSIONER OF PATENTS
Application : No. 714453 in the name of ExxonMobil Chemical Patents Inc.
Title: Additives and Fuel Oil Compositions.
Action: Application under Regulation 5.10(4) by ExxonMobil Chemical Patents Inc to serve further evidence, and an objection by The Associated Octel Company Limited.
DecisionIssued 6 February 2003
Abstract
A previous decision on an extension of time to serve evidence in answer imposed terms that the evidence must be served by 2 December 2002. Evidence was served prior to that date. However one declaration did not include several referenced documents. The applicant advised on 2 December that evidence in answer was completed. 16 days later, the applicant requested leave to serve further evidence, being the documents missing from the declaration. The opponent objected, arguing that the further evidence was not properly further evidence, that the application was a de facto extension of time request, and as such was contrary to the conditions of the previous decision.
· Following the decision in A Goninan & Co Ltd v Commissioner of Patents (1997) 38 IPR 213, the approach of the Commissioner to further evidence has changed from earlier decisions of the Commissioner – see, for example, Sonus Pharmaceuticals v Alliance Pharmacuetical Corp and Schering Aktiengesellschaft 2001 APOR 13, and Transgene S.A v Virax Holdings Ltd 2002 APOR 14.
· No material disadvantage to the opponent identified as a result of the further evidence.
· The evidence indicated a real desire by the applicant to have all the material served by the due date. Circumstances involving the applicant's agents intervened, such that this did not occur. However this was not a case where the consequences of the actions of the agent should be visited on the principal.
· Semantic arguments about whether the present matter is truly an application for further evidence or a de facto request for an extension of time, improperly ignore the end objective of a proper determination of the opposition on its merits.
PATENTS ACT 1990
DECISION OF A DEPUTY COMMISSIONER OF PATENTS
Re:Patent Application No. 714453 in the name of ExxonMobil Chemical Patents Inc., application under Regulation 5.10(4) to serve further evidence, and an objection by The Associated Octel Company Limited
BACKGROUND
ExxonMobil Chemical Patents Inc ("ExxonMobil") filed patent application 714453 on 2 February 1996. The application was advertised accepted on 6 January 2000. On 6 April 2000 'The Associated Octel Company Limited' ("Octel") filed a notice of opposition to the grant of a patent on this application, and filed a statement of grounds and particulars in support of its opposition on 6 July 2000. Octel applied for and was granted several extensions of time unopposed to serve evidence in support. On 2 October 2001 Octel completed the serving of its evidence in support.
The serving of evidence in answer has been rather more contentious. The evidence in answer was first due 2 January 2002. ExxonMobil applied for several extensions of time to serve evidence in answer. The second application was the subject of a hearing. The extension was allowed following a hearing officer's decision, [2002] APO 19. In that decision the hearing officer concluded:
34. I have found that the applicant has not provided satisfactory reasons for the delays in the preparation of evidence in answer. 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.
35. In this case, it clear that the evidence that the applicant is seeking to adduce is key to the opposition and that its admission might lead to a more correct (or just) result at the substantive hearing. On the understanding that evidence in answer is now well underway and likely to be at least close to completion within the period requested by the applicant, the interests of the applicant and the public in having the hearing determined on its merits outweigh any disadvantages to the opponent in having a short delay. I therefore allow the extension of time for the period requested, that is, from 2 April 2002 to 2 July 2002.
Subsequently a further request for an extension of time was made, and objected to. The hearing officer's decision [2002] APO 34 included the following:
24. The above reasons, in my opinion, are insufficient to warrant an extension under Reg. 5.10(2).
37. I conclude the proposed amendment does not provide a basis for allowing an extension of time to serve evidence in answer.
43. I conclude the reasons expressed for ExxonMobil's delay in serving evidence in answer relating to experimental results are unsatisfactory.
46. I conclude the continuing delay in leading independent evidence remains unsatisfactorily explained.
The hearing officer discussed a number of other procedural issues, including the availability of Divisional applications and the effect on the proceedings if a divisional was filed, and made the following decision:
64. I think it appropriate that the presently sought extension of time is dealt with subject to the following terms (Reg. 5.10(2)(b)):-
·ExxonMobil completes its service of evidence in answer by 2 December 2002.
·If ExxonMobil requires time beyond the presently sought time until 2 October 2002 then ExxonMobil applies for a further extension of time with appropriate justification for the need for that extension and with indications of its progress in concluding its evidence in answer.
·I shall not formally grant the present extension unless and until those terms are met.
If these terms are not met, I shall refuse the extension.
65. I have further concluded it is inappropriate on the material presently before me to make a direction under Reg. 5.10(1) to defer the opposition proceedings.
Several declarations pertaining to the evidence in answer were duly served, the last one being a declaration by a Dr Iain More of 1 Nov 2002, which was served on Nov 4. However that declaration did not contain copies of certain references identified in the declaration. By letter of 4 November, the attorney for the applicant indicated that he was waiting instructions as to whether copies of the references in this declaration were to be served in evidence. By letter of 14 November the attorney wrote to advise "All that remains is for certain references identified in Dr More's last declaration to be tendered in evidence". On 2 December the attorney advised that the evidence in answer comprised the material served to that date - which did not include copies of the references not included in the More declaration.
Subsequently, the attorney for the opponent took issue with the incomplete nature of the More declaration, queried whether the terms of the previous decision had been complied with, and asserted that the More declaration "is rendered meaningless."
On 16 December the applicant served the missing references, and on 17 December made a request under reg 5.10(4) to serve these documents as further evidence. The opponent objected, and the matter was set for hearing. The hearing was held on 5 Feb 2003; the applicant was represented by Mr R Baddeley patent attorney of Watermark, Perth; the opponent was represented by Dr E Houlihan patent attorney of Houlihan2, Melbourne.
REQUEST FOR FURTHER EVIDENCE
The request for further evidence is accompanied by a declaration that states inter alia:
c. I understand that the reference documents formed evidence in corresponding European Patent Office proceedings. I also consider the reference documents relevant to the current proceedings.
d. Specifically, Dr More's 1 November 2002 Statutory Declaration is supported by the reference documents which are conveniently made available in the further evidence for detailed consideration as appropriate, during any hearing of this Opposition.
No further explanation of the relevance of these documents to the proceedings was provided.
As to the explanation for why the documents were not served in time, Mr Baddeley's declaration indicates that:
· The 8 reference documents were faxed to him on 2 December, and received in his Perth office in the evening of that day
· Simultaneously his client (sic) advised by fax that he had been off sick for a period resulting in late transmission of the reference documents
· On the afternoon of 3 December he requested courier copies of the 8 reference documents, because some had not faxed through clearly
· The documents were posted (not sent by courier), and received on 16 December.
No explanation is given as to why no effort was made to serve the documents that were received (albeit in unclear form) by the attorney on 3rd December - which seems surprising given the basis of the previous extension. Nor is there any explanation about the nature, time, or duration of the illness of the attorney in the United Kingdom.
SUBMISSIONS
Mr Baddeley's submissions were essentially:
· The discretion to allow further evidence was a broad discretion;
· The material was important to understand the background to the invention;
· Some of the documents were mentioned in the opponent's evidence in support;
· The opponent had known about the references for some long time;
· The applicant was not attempting to 'ambush' the opponent. There was no deliberate delay. While it was acknowledged that it could have been done a little quicker, there was no intention to delay. If there was any inconvenience caused, Mr Baddeley apologised for it.
Dr Houlihan's submissions were essentially:
· The application was not really an application for further evidence, but an application for an extension of time to serve evidence in answer;
· Further evidence should not be used to serve evidence that should have been served in the normal evidence stages [see, in particular, Sandoz v Fujisawa 27 IPR 421]
· The opponent had strongly objected to the previous extensions by the applicant. The 2nd decision in effect allowed a longer extension than that requested by the applicant – to the opponent's detriment. Furthermore, that extension was granted subject to certain conditions being met – and the further evidence demonstrates a failure to comply with those conditions. If a party could effectively avoid compliance with any deadlines for serving evidence, there was little point in having any time frames for requiring evidence to be served – as parties could in effect serve the evidence whenever they liked.
· While the applicant might have informed the opponent of the documents, and they might have been used in proceedings before the European Patent Office, the opponent should not be expected to identify and locate those documents.
· If the evidence was to be admitted, she 'demanded' a detailed explanation of why.
DISCUSSION
The opposition mechanism of s.59 allows third parties to challenge the validity of a patent application prior to grant. The parties to the proceedings clearly have divergent interests. Prima facie, the applicant wants to maintain their monopoly rights to keep competitors out of the market. This may mean that the applicant wants an early disposition so that they can enforce their patent. However in some situations the applicant may wish to delay proceedings for as long as possible (perhaps in the knowledge that their patent rights may not be valid), and other applicants may wish to delay proceedings in Australia because of events occurring in other jurisdictions. Similarly opponents might want a quick disposition so that they can enter the market place. But they may also want to protract the proceedings in an attempt to obtain advantage over the applicant - whether that be through perceived financial weakness of the applicant, or the cost of the proceedings leading to a favourable settlement and so on.
I do not mention these to suggest that any particular one of these relate to the parties in the present proceedings. Rather, to note that in the evidentiary procedures leading up to the substantive hearing in an opposition, there are many and varied reasons for the conduct of the parties. It is against this background that 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. That this is so is apparent from the comments of Burchett J in Ferocem Pty Ltd v Commissioner of Patents, (1994) 28 IPR 24
"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 interests of the persons directly concerned in the application and opposition in question. There are also public interests, which are not necessarily ranged on the same side. They include the expeditious disposal of matters in the Patents Office, and questions of costs, 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 Co (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 of procedure, lamentable though the failure may be'".
In the present case, the conduct of the applicant is clearly open to criticism. In the context of the previous extension requests, the date of 2 December was clearly intended to have finality. The material now sought to be served should have been served by 2 December. The asserted illness of the UK agent might be credible per se. But there is no indication of the time or duration of that illness such that its effect on the applicant's ability to provide the evidence can be reasonably assessed. It also seems odd that no effort was made to serve copies of the missing documents in such state as they were available, on 3 December. These circumstances, together with the findings of the two previous decisions regarding extensions of time, give an impression of a party who has a somewhat cavalier attitude to the Australian opposition proceedings. However, whatever else one might say about the conduct surrounding the serving of this further evidence, I do not detect any intent to deliberately frustrate the proceedings or gain procedural advantage. At most, what has occurred is consistent with a rather less-than-desirable attention to complying with the time frames for serving evidence.
Parties have every right to expect evidence to be provided in a diligent manner, and objections to extensions of time are an important part of that process. A consequence of refusing to grant extensions of time must be that evidence is not included in the opposition proceedings – although as demonstrated by the decision of Ferrocem (supra), A Goninan & Co Ltd v Commissioner of Patents (1997) 38 IPR 213 and National Starch & Chemical Company v Commissioner of Patents (2001) 50 IPR 398, this is very much a remedy of last resort. Many procedural disputes properly arise from the less than ideal conduct of one or other of the parties – and in appropriate circumstances the exclusion of evidence is quite proper. However some disputes can be better characterised as being based upon a perception that the other party 'has gotten away with' something, and/or a desire to have evidence excluded by reason of a procedural technicality (forgetting that the Commissioner functions as a tribunal, not a court of law). When this arises there is a real risk of the proceedings degenerating into a series of continuing procedural disputes – with the ultimate objective of a proper determination of the opposition being lost. I think the Commissioner has an obligation to ensure that this does not occur.
In the present case, the opponent took 18 months from filing its notice of opposition until it served its evidence. The applicant served its evidence in answer 14 months later. The material sought to be added was served 16 days thereafter. Against this background the extra two weeks seems, of itself, to be of minor import to the opposition. And any expressed concern by the opponent about the urgency of getting the present opposition to substantive hearing must be moderated in part by the fact that they took 18 months to serve their evidence in support of the opposition.
As to the relevance of the material [Goninan, National Starch & Chemical Company (supra)], prima facie the material sought to be added is relevant – otherwise there would be no basis for the opponent's attorney to assert, in her letter of 3 December, that:
"in the absence of these documents, this 1 November 2002 More Declaration is rendered meaningless".
Additionally much of the material is copies of 'standards' and would appear to be in the public domain and readily available. Given the nature of the further evidence, and the fact that it was served very soon after the evidence in answer was completed, I am at a loss to identify any real material disadvantage suffered by the opponent. In particular, I cannot identify any disadvantage that would outweigh the desirability of having the opposition properly determined on its merits. On several occasions during the hearing I invited Dr Houlihan to identify the material disadvantage that her client would suffer as a result of this evidence being admitted. Dr Houlihan noted that the declaration for the evidence in reply had already been drafted on the basis of the absence of this material, and that it would need to be redrafted and reviewed at further expense to the applicant. While this point might be accepted, it does not seem to me that at this stage of proceedings her client will suffer any material disadvantage. Any further evidence will necessarily entail some extra expense on the part of the other party – but the present circumstances are not suggestive of inordinate expenses or time delays, or inability to reasonably respond to the material in an appropriate time frame.
As has been made consistently clear in many decisions of the courts, the exercise of a discretionary power cannot be reduced to an imperative - see, for example Ferocem (supra) at page 247. Dr Houlihan relied on the decision of the Commissioner in Sandoz v Fujisawa 27 IPR 421, and care needs to be exercised to ensure statements in that decision are not treated as imperatives. It must also be noted that the Sandoz decision issued before any of the Ferocem, Goninan, or National Starch decisions. Since those decisions, the approach of the Commissioner to further evidence has changed from that in the Sandoz decision – see, for example, Sonus Pharmaceuticals v Alliance Pharmacuetical Corp and Schering Aktiengesellschaft 2001 APOR 13, and Transgene S.A v Virax Holdings Ltd 2002 APOR 14. In Transgene the delegate stated:
13.Goninan found that regulation 5.10 confers a broad discretion, which cannot be reduced to an imperative compliance with particular requirements. In my view, Goninan is not only relevant to the issue of whether further evidence is allowed but it supersedes the more narrow approach in Sandoz and ICI. The reasoning in Goninin suggests that the requirements outlined in Sandoz and ICI are not prescriptive. Instead, the questions asked in those cases are only a guide to help identify the relevant aspects of a case so that “proper, genuine and realistic consideration” can be given to them as required by Goninan.
Dr Houlihan also expressed great dissatisfaction with the fact that the applicant had in effect achieved what it had previously set out to do - that is, to delay the Australian proceedings until after certain European proceedings. I do not know whether that timing is true or not. However if it is true, I am satisfied that it arises more from coincidence following from the previous decision rather than any abuse of process by the applicant. Of course such a perception may explain the attitude of the opponent in these proceedings. But to the extent that Dr Houlihan is expressing outrage that the applicant might be getting away with an apparent circumvention of the previous decision, it is noteworthy to recall the facts of the Goninan case. In extension proceedings, the Commissioner had found an extension not justified, but allowed a short time for available evidence to be served. The opponent subsequently sought a further extension. In dealing with an objection to that latter extension, the Commissioner's delegate asserted:
"It seems ludicrous that a party could be granted a further short period after having not made out a proper case when that party has already received a short extension of time after earlier not making out a proper case."
The delegate's decision was overturned, with Sackville J stating:
Like Burchett J in Ferocem, I have every sympathy with the delegate's desire to insist upon the maintenance of proper standards. I do not suggest that it was not open to the delegate to take into account Goninan's failure, not merely on one occasion, but on two occasions, to provide a satisfactory explanation for the delays in finalising its evidence. Indeed, it was open to the delegate to give considerable weight to this factor. However, he could not regard the absence of any proper explanation as being such a powerful consideration that it obviated the need to address the nature and significance of the evidence upon which Goninan wished to rely in the opposition proceedings. This is what I think the delegate did. He thereby prevented himself from giving genuine consideration to a relevant matter, namely, the public interest in opposition proceedings being determined on their merits.
The present situation has many parallels to the Goninan case. Despite Dr Houlihan's expressed grievances about perceived injustices, I am obligated to give proper consideration to all relevant matters, including the public interest in opposition proceedings being determined on their merits.
Implicit in Dr Houlihan's submissions is an assertion that the applicant has not been diligent in timely filing the evidence in answer – to the point of deliberately delaying the proceedings. While it is clear from the two previous decisions that the conduct of the applicant was subject to that criticism, the applicant's conduct since the last decision is prima facie consistent with a desire for the evidence in answer to be fully served by the due date. But it is also apparent that two events intervened. Firstly, there is the illness of the agent in the United Kingdom – for however long – that plausibly resulted in the material not getting to the office of the Australian attorney until the evening of the due date. Secondly, there are the subsequent actions of the Australian attorney and UK agent that resulted in the material not being served until 14 days after the due date. It used to be the case that the actions of an agent were inevitably taken to be the actions of the principal. But since Comcare v A'Hearn (1993) 119 ALR 85 this is not the case. A'Hearn has been expressly followed by the Commissioner in New Clear Water Pty Ltd v Atlantis Corporation Pty Ltd [2001] APOR 48, and Golden Casket Lottery Corporation Limited v Neurizon Pty Ltd [2002] APOR 30. In the present case the evidence is consistent with a genuine effort by the applicant for the material to be served by the due date. I do not believe there is any good reason to visit the consequences of the actions (or inactions) of the agents on the applicant by refusing to admit this evidence.
Finally, I note that Dr Houlihan assertively argued that the present application was in fact a de facto request for an extension of time; that if such is the case the applicant had not complied with the requirements with the previous decision and (I infer) that the previous extensions should not have been allowed as the conditions of the decision had not been met. However the principles of Goninan apply to all matters dealt with under regulation 5.10. I have proceeded on the basis that this application is one for further evidence – as that was what was requested, and as evidence in answer was formally completed on 2 December. However, if I were to consider this as a further extension of time application, I do not believe (following Goninan) that a materially different outcome would result. What ultimately matters is that relevant material is before the Commissioner – preferably in an orderly manner. Semantic arguments about whether the present matter is truly an application for further evidence or a de facto request for an extension of time, improperly ignore the end objective of a proper determination of the opposition on its merits.
DECISION
I am obligated to exercise my discretion having regard to all relevant considerations, without elevating issues to the point of being imperatives. I have discussed the issues above. Most notably, I am unable to identify any material disadvantage the opponent would suffer as a result of this material being admitted. Significantly, the failure to have the material timely served may be due more to the conduct of the applicant's agents than the applicant itself, and I see no good reason to exclude the material because of that conduct. Prima facie the material is relevant to the proper determination of the opposition. Having regard to all the circumstances, I conclude that the further evidence should be allowed.
I think that the allowance of the further evidence should be conditioned on the due date for evidence in reply being 3 months from the date of service of that further evidence - that is, due on 18 March 2003 – and I so direct. Apart from this, I do not think there is any need to make special provision for evidence in response to the further evidence, as that can be included in the evidence in reply.
COSTS
Costs usually follow the event. Given the absence on any real material disadvantage to the opponent caused by the further evidence (as distinct to perceived injustices arising from the conduct of the applicant), there is strong argument that costs should be awarded against the opponent. However, having regard to the past history of this opposition, the absence of any apparent urgency on the part of the applicant's agents in providing the missing material is most surprising – and on the basis of conduct there is strong argument that costs should be awarded against the applicant. Accordingly, I make no award of costs.
D Herald
Deputy Commissioner of PatentsPatent attorneys for the applicant : Watermark, Perth
Patent attorneys for the opponent : Houlihan2, Melbourne
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