ExxonMobil Chemical Patents Inc v the Associated Octel Company Ltd

OFFICIAL NOTICE
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 714453 in the name of ExxonMobil Chemical Patents Inc
Title : Additives and Fuel Oil Compositions
Action: Opposition under section 59 by The Associated Octel Company Ltd and an objection to an application for an extension of time under regulation 5.10(2) to serve evidence in answer

Decision : Issued .
Abstract
Extension of time to serve evidence in answer under regulation 5.10(2) granted.
While the applicant has not provided satisfactory reasons for the delays in the preparation of evidence in answer, the evidence that the applicant is seeking to adduce is key to the opposition and 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 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.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No. 714453 by ExxonMobil Chemical Patents Inc, an opposition under section 59 by The Associated Octel Company Ltd and an objection to an application for an extension of time under regulation 5.10(2) to serve evidence in answer.

BACKGROUND

Patent Application 714453 was filed on 2 February 1996 under the provisions of the PCT in the name of Exxon Chemical Patents Inc, now known as ExxonMobil Chemical Patents Inc. (ExxonMobil). The Australian application claimed priority from an application (9502041.8) filed in Great Britain on 2 February 1995.
The Australian application was advertised accepted on 6 January 2000. A notice of opposition was filed on 6 April 2000 by The Associated Octel Company Ltd (Octel) who served their statement of grounds on 6 July 2000. Evidence in support was finally completed on 7 October 2001 after 4 extensions of time. Evidence in answer was therefore initially due on 2 January 2002. The applicant requested and was granted an extension of time until 2 April 2002 to complete their evidence. On 28 March 2002, the applicant made a second request for an extension of time (until 2 July 2002) to serve their evidence. The opponent objected to this request and the matter was set for hearing in Canberra on 2 May 2002. The applicant was represented by Mr Richard Baddeley, patent attorney, from Watermark, Perth and the opponent was represented by Dr Elizabeth Houlihan, patent attorney, from Callinan Lawrie, Melbourne.
RELEVANT LAW
According to regulation 5.8(2), the time for serving evidence in answer is three months from the date of service of the evidence in support. This time may be extended under 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 the application on the other party."
This provision must be read in conjunction with regulation 5.10(5) which states:
"(5) The Commissioner must not give a direction under subregulation (1) or grant an application under subregulation (2) or (4) unless the Commissioner:

(a)if he or she proposes to grant an application by a party - is reasonably satisfied that the other party has been notified of the application; and

(b)if he or she proposes to act on his or her own motion - ensures that the parties are notified of the proposed action; and

(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."
Thus the Commissioner, having given both parties the opportunity to make representations, may grant an extension only if reasonably satisfied that it is appropriate in all the circumstances.
Regarding the factors that must be considered in deciding whether or not the Commissioner should grant an extension of time, Burchett J in Ferocem Pty Ltd v Commissioner of Patents (1994) 28 IPR 243 stated:
"The idea that such a broad discretion can validly be reduced by a decision-maker to an insistence upon 'imperative' compliance with particular requirements has repeatedly been rejected by the courts."
He concluded that:
"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 it should be shut out in consequence of a failure of procedure, lamentable though the failure may be'. This proposition was cited by Bowen CJ in Vangedal-Nielsen v Smith (Commissioner of Patents) (1980) 33 ALR 144 (at 150), where he also set out some of the considerations involved upon an application for an extension of time."
These considerations were also raised in A Goninan & Co Ltd v Commissioner of Patents (1997) 38 IPR 213 where Sackville J adopted the position that the decision-maker was required to give proper, realistic and genuine consideration to the public interest generally and specifically to the opposition proceeding being determined on its merits. In respect of this point, he stated:
"In order for the Commissioner or his delegate to give proper, genuine and realistic consideration to the aspect of public interest I have identified, it is necessary to consider the nature of the evidence the opponent seeks to adduce and the significance of that evidence for the opposition proceedings. I do not mean to suggest that the evidence has to be scrutinised in the same way as would occur at a hearing on the merits. But unless the delegate forms a view as to the issues addressed by the proposed evidence, and whether that evidence is likely to be important in the opposition proceedings, it is difficult to see how proper consideration can be given to the public interest in having such proceedings being determined on its merits."
The relevant principles developed in these decisions may be summarised as follows:
(a)The broad discretion afforded by Regulation 5.10 cannot be reduced to insistence on imperative compliance with particular requirements;
(b)The exercise of this discretionary power requires proper, genuine and realistic consideration of all the relevant aspects that pertain to the application;
(c)The provision of a satisfactory explanation of the delay is a relevant consideration, but is not mandatory;
(d)The public interest in determining a serious opposition on its merits is a relevant consideration and must be balanced with the requirement that matters before the patent office should be dealt with in an efficient, orderly manner and not be unduly prolonged;
(e)The interests of the opponent, the applicant and any other parties are a relevant consideration.
These principles were echoed in the more recent decision in National Starch & Chemical Company v Commissioner of Patents [2001] FCA 33. I will apply these general principles from the above cases to the present facts, recognising that I must not either grant the extension or refuse it without giving proper consideration to all relevant circumstances.
DECISION
has there been a satisfactory explanation of the delay?
In their application for an extension of time to serve evidence in answer, the applicant provided the following reasons to justify their request:
(a)Since the filing of the last application for an extension of time to serve evidence in answer, enquiries have been made to locate an expert declarant in this matter. This has been more difficult than expected. The applicant has now retained an independent UK academic who has been active in the fuel lubricity area since the mid 1980's. Enquiries as to whether he can provide evidence in this opposition are currently being made.
(b)Experimental evidence is being prepared to support the applicant's case in the opposition.
(c)A corresponding opposition is currently being prosecuted before the European Patent Office and, if possible, it is sought to co-ordinate the opposition to ensure consistency of approach. The European opposition should be heard in October 2002. Preparatory steps in the opposition will, in any event, be relevant to the prosecution of the defence to the Australian opposition.
At the hearing, the attorney also noted that the applicant was unfamiliar with Australian opposition procedures and had not fully appreciated the time within which they were required to serve evidence in answer. Mr Baddeley explained that although the applicant is a multinational company with considerable experience in Australia, the current application is the product of a subsidiary company Infineum, which is a joint venture between ExxonMobil and Shell. Infineum, in contrast to ExxonMobil, has had scant experience with the Australian opposition process.
Although I accept that the applicant may be unfamiliar with the procedures and timing requirements for an Australian opposition, I would also expect a serious applicant to take steps to familiarise themselves with these requirements and to make every attempt to meet them. In any case, the applicant is represented by an Australian patent attorney and it is the responsibility of the attorney to explain Australian law to their client. As such, the purported lack of familiarity does not satisfactorily explain the applicant's delay in preparing evidence. With regard to the other three points made by the applicant, I will deal with each of these in turn.
Difficulty locating and retaining an expert declarant
The applicant submitted that the principle reason for the delay in completing evidence in answer was the difficulty in securing an expert declarant. Mr Baddeley explained that the applicant originally intended to secure an Australian declarant to provide evidence and that they commenced their search for such an expert following the service of evidence in support on 2 October 2001. They were unable to find an Australian expert and were forced to look for one overseas. The applicant advised at the hearing that they were now confident that Professor Spikes from the UK could provide evidence for them.
The opponent argued that a diligent applicant should have commenced their search for an expert declarant as soon as they were served with the statement of grounds and particulars on 6 July 2000 rather than waiting for service of evidence in support over thirteen months later. According to the opponent, the applicant would have had sufficient notice of the nature of the case to be answered when the statement of grounds and particulars was served and should have started searching for an expert and preparing their case at that stage.
In my view, while the applicant would have an idea of the nature of the case to be answered from statement of grounds and particulars, they would not know the details of the argument and may also not necessarily understand the emphasis the opponent was intending to place on the expert evidence or how it was being relied on by the opponent. Such information may be important in deciding which expert to select. For example, if the opponent's expert provided evidence of the common general knowledge in Australia, the applicant would require an expert who was equally qualified to provide such evidence. Similarly, if the opponent's evidence focused on a particular aspect of the technology then this too may influence the expert witness chosen.
In the current case, the opponent identified the person skilled in the art in the statement of grounds and particulars as "a person or a team of people involved in the fuel additive art". It seems to me this is a reasonably broad field and there may well be specialists within that field who had more or less knowledge of the issues in dispute. The statement did not contain all the key details of the issues in dispute. For example, the statement alleged that the claimed invention was obvious in light of the common general knowledge considered together with any of documents (1) to (7), but it is not clear exactly how the citations would be combined with what common general knowledge. Further, the statement noted that trials of alternative acids and esters as defined in section (b) of claim 1 had been conducted but contained no details of what these trials involved and what acids and esters were in dispute. Such key details could influence the choice of an expert whose skills lie in one part or the field or another. It therefore was reasonable for them to wait until evidence in support was finalised before searching for an expert witness.
Of course, this may be different if the applicant could have anticipated problems in locating an expert witness. In British Telecommunications Public Limited Company v Telstra Corporation Limited 2000 APO 50, for example, the delegate noted that the applicant was having difficulties in finding an expert but concluded:
I can understand their difficulty in obtaining an Australian expert considering the dominance of the opponent, Telstra, in the telecommunications industry in Australia but, given this known dominance, I believe that BT should have anticipated this problem and commenced an extensive search in Australia earlier.
However, there is no suggestion in the current case that difficulties in securing an expert could have been anticipated. The claimed invention is not in a highly specialised or technically complex art. As a consequence, it was only after the applicant had commenced their search for an expert that they discovered, contrary to their original expectations, that they had problems securing an expert declarant.
The opponent argued that the applicant had no need to undertake an extensive search for experts as the inventors could have provided evidence. However, I accept the applicant's point in response that it would be preferable to rely on independent expert witnesses if at all possible. All else being equal, I agree that an independent witness is likely to carry more weight at the substantive hearing than a witness with an interest in the patent application.
The opponent then argued that they (the opponent) had no problems in securing an expert and that therefore, the applicant's failure to find an expert was due to the applicant's lack of diligence rather than an expert not being available. However, I note that although the opponent did a thorough search for experts, they only seemed to identify a small pool of Australian fuel lubricity experts, including Dr Trim (who was also identified by the applicant). The opponent's use of three experts (Drs Trim, MacIver and Hodges) in evidence in support automatically depleted the pool of experts available to the applicant because of a conflict of interest. There is no evidence before me that there were other experts identified by the opponent that the applicant had failed to use. As a result, I am not convinced that the problems experienced by the applicant in finding an expert were because of their lack of diligence
Having said that, I share some of the opponent's concerns with regard to the time taken by the applicant to secure an expert. It has been over 6 months since evidence in support was completed and it appears that the applicant has only recently retained a suitable expert. While part of this period included the summer holiday period in Australia where experts (particularly academic experts) can be difficult to contact, this does not fully explain the time taken. The applicant used an in house pool of experts as their primary means to identify suitable declarants. It seems to me that this process could have been done fairly quickly and that once the applicant had determined that they were unable to obtain an Australian expert by this means, they should have either immediately widened their search for Australian experts or contacted their overseas associates to locate an overseas expert.
There is no evidence that an alternate search was conducted nor did the applicant advise that the overseas associates were promptly notified that there were problems in securing an Australian experts. There is also no evidence that the overseas associates experienced similar problems in locating an overseas expert. Without this information, six months seems an excessive length of time to undertake an apparently straight forward process to secure an expert. As a result, I am not satisfied that the search for an expert explains the delay in preparing the evidence in answer.
Time taken to obtain additional experimental data
The applicant argued that a second reason for needing an extension of time was that they were conducting experiments to include in their evidence in answer. They did not indicate the nature of this evidence in either their extension of time request or their written submissions. However, it was obvious from the statement of grounds and particulars and the evidence in support that a key factor in the substantive opposition is likely to be the question of synergy between additives in the claimed fuel oil composition. The opponent had provided experimental results in evidence in support suggesting that there was no synergy in a number of the claimed compositions. The applicant confirmed at the hearing that they intended to tender data to refute this part of the opponent's evidence in support.
The importance of the issue suggests that the applicant should have quickly ascertained the need to include their own data in answer to the opponent's evidence and promptly commenced their own experimental program once evidence in support was finalised. However, there was no evidence that the applicant had started the program until the current extension of time request (3-6 months after evidence in support was finalised). Further, there appears to be no reason why the experiments could not have been completed expeditiously prior to the current request. The experiments would appear to be along the lines of those already exemplified in the opposed patent specification where the applicant can presumably rely on pre-existing experimental design and equipment and in-house expertise.
Thus, while it is clear that the experimental evidence is highly relevant to the applicant's case, it is not clear why they did not immediately start their experiments once evidence in support was finalised. I am therefore not convinced that the preparation of experimental evidence satisfactorily explains the delay in preparing evidence in answer.
Co-ordination of European and Australian oppositions
The final point raised as a ground for an extension of time was that the applicant wished to co-ordinate the Australian opposition with their European opposition, which is scheduled to be heard in October 2002. Such a delay would only be acceptable if both parties were in agreement in this regard and Dr Houlihan made it clear that the opponent was opposed to such a delay. Furthermore, given that there are considerable differences between European Patent Office and Australian opposition proceedings it is unlikely that there would be much to gain from co-ordinating the two proceedings. I therefore am not satisfied that the European opposition explains the delay in preparing the evidence in answer.
Conclusion

None of the reasons provided by the applicant provide a satisfactory explanation of the delay in the preparation of evidence in answer.
interests of the parties
The opponent argued that they were seriously disadvantaged by the delays in evidence in answer. They asserted that the applicant had been deliberately delaying proceedings in the European opposition and that they were similarly "dragging the chain" here. However, the opponent provided no evidence to support their assertions with regard to the European opposition. In any case, the Australian and European oppositions are clearly different matters and rely on different evidence. This means that the extension of time in the Australian opposition has to be considered on its own merits. Of course, I would be concerned about the applicant's diligence if there were any suggestion that the applicant's present tardiness was a product of their committing all of their resources to the European proceedings and ignoring the Australian opposition. However, Mr Baddeley assured me that this was not the case and there is at present nothing to suggest that the applicant's focus on the European opposition has worked to the detriment of the Australian opposition.
Having said that, I agree with the opponent that the applicant's prosecution of the current opposition has not been ideal. The reasons provided in the previous extension appeared to indicate that the applicant had used the original 3 months time period for serving evidence in answer provided in regulation 5.8(2) to:

·identify the key issues in the opposition;
·decide an expert witness is necessary; and
·devise their strategy for preparing evidence.

Prima facie, 3 months is an inordinate length of time to do this. The opponent's case is not overly lengthy or complicated. It should have been immediately apparent from even a cursory look at the evidence in support what the key issues were in the opposition and, in any case, the applicant had had fair warning of the type of case in the statement of grounds and particulars filed some 15 months previously. It is not clear to me why an applicant would take a full 3 months after evidence in support was finalised before either starting key experiments or attempting to procure expert witnesses if they were was serious about trying to meet the deadline prescribed in regulation 5.8(2).

However, as this is only the second extension of time request, I am prepared to give the applicant the benefit of doubt and conclude that their tardiness up to the first extension of time was due to poor case management, rather than a deliberate attempt to thwart the process. This being the case, I also expect the applicant to have sorted out their early problems by now so that there should no longer be any impediments to their promptly finalising evidence in answer.
I note that the applicant confirmed that the experiments were well underway and that the results should be available within the time for which the extension was sought. The applicant was less forthcoming with regard to when they expect the expert's declaration to be finalised. However, in the opponent's evidence in support, their experts have discussed the effect of the experimental results on inventive step and have provided comments on the novelty citations. It is likely that the evidence in answer will be similarly focused. Neither task would be difficult or time-consuming. The experimental evidence, once obtained, appears reasonably easy to analyse because there is either a demonstrable synergy or not. Further, as the opponent pointed out, there are were only 7 prior art documents and ExxonMobil would have already been aware of many of these documents, either because they are patent documents in which ExxonMobil was the applicant or because they had been cited in the original ISR. As a result, the declaration being sought from the expert witness should be straight forward and I would assume that the applicant would be able to complete their evidence in answer fairly soon after the experimental results are provided to the expert witness. This is likely to be by the end of the period for which the extension is sought (2 July 2002) or fairly soon after. The opponent would not be seriously disadvantaged by this time frame.
The applicant, on the other hand, would clearly be considerably disadvantaged if they were unable to serve evidence in answer. The evidence being prepared is clearly relevant to a proper determination of the opposition. The experimental evidence, in particular, will deal closely with the issue of synergy which is a key part of the opponent's case.
On balance, I believe that in this instance the interests of the applicant in having the opportunity to submit the declarations of their expert witness and the results of their further experimental work outweigh the interests of the opponent. However, this is on the assumption that the evidence in answer will be close to completion in the period requested in the current extension. This balance would significantly change if the opposition was significantly protracted much beyond this time frame.
the public interest
The public interest calls for a balance between the requirements that the Commissioner deals with opposition matters expeditiously and economically and that a serious opposition is dealt with on its merits [see Ferocem Pty Ltd v Commissioner of Patents (supra) and in A Goninan & Co Ltd v Commissioner of Patents (supra)].
In the present case, the evidence would appear to be highly relevant and is likely to lead to a more just and correct determination of the opposition. Given my assumption above that evidence in answer will be close to completion in the period requested in the current extension, I believe that, on balance, the public interest is best served by accepting a short delay in the progression of the hearing in favour of completion of evidence that appears to be highly relevant to the opposition.
CONCLUSION
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.
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.
COSTS
The power to award costs is based on section 210 and regulation 22.8. The normal practice is that costs should follow the event.
However, while I have found that the opponent's objection to the extension does not succeed and have allowed the extension, the applicant has not provided a satisfactory explanation for the continuing delay and has been less diligent than they might have been completing their evidence in answer. Consequently, I award costs against the applicant.
Karen Ayers
Delegate of the Commissioner of Patents
Patent attorneys for the applicant : Watermark, Perth
Patent attorneys for the opponent : Callinan Lawrie, Melbourne

[2002] APO 19

24 May 2002