ExxonMobil Upstream Research Company v Shell Internationale Research Maatschappij B.V - [2014] APO 22

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
ExxonMobil Upstream Research Company v Shell Internationale Research Maatschappij B.V.
[2014] APO 22

Patent Application: 2008213739

Title:Process and apparatus for depleting carbon dioxide content in a natural gas feedstream containing ethane and C3+ hydrocarbons

Patent Applicant:  Shell Internationale Research Maatschappij B.V.
Opponent:  ExxonMobil Upstream Research Company
Hearing Officer:  P M Spann, Deputy Commissioner of Patents
Decision Date:  15 April 2014
Hearing Date:  Written submissions completed 14 March 2014
Catchwords:  PATENTS – extension of time to file evidence in answer – reg 5.9 – whether applicant has acted promptly and diligently at all times – whether exceptional circumstances – opposition stayed on the basis of proposed amendments that substantially alter the scope of the opposition – extension allowed – no award of costs.

Representation: Patent applicant: Griffith Hack
Opponent:Watermark

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2008213739

Title:Process and apparatus for depleting carbon dioxide content in a natural gas feedstream containing ethane and C3+ hydrocarbons

Patent Applicant:  Shell Internationale Research Maatschappij B.V.
Opponent:  ExxonMobil Upstream Research Company
Date of Decision:  15 April 2014
DECISION
The opposition is stayed until the Commissioner advises the parties that the amendments proposed by the applicant have been allowed, refused or withdrawn. The period for filing evidence in answer is extended to one (1) month after the Commissioner advises the parties that the amendments have been allowed, refused or withdrawn.
REASONS FOR DECISION

This matter concerns a request for an extension of time to file evidence in reply and is determined under regulation 5.9 of the Patents Regulations as amended on 15 April 2013 by the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No 1).
Background
Patent application 2008213739 was filed by Shell Internationale Research Maatschappij B.V. (Shell) on 8 February 2008. It was examined and advertised as accepted on 8 December 2011 and a notice of opposition to the grant of a patent was filed in the name of ExxonMobil Upstream Research Company (Exxon) on 7 March 2012. A statement of grounds and particulars was served and filed on 7 June 2012 and the evidence in support completed on 10 October 2013, after several extensions of time were obtained. The normal time for filing evidence in answer consequently was due to expire on 10 January 2014.
Shell on 9 January 2013 filed a request to amend the complete specification together with a request for the Commissioner to stay the opposition proceedings. After a number of exchanges with the parties, the delegate on 29 January advised that, subject to Shell obtaining an extension of time bridging the intervening period, he proposed to direct that:
-The opposition is stayed from 29 January 2014 until the Commissioner has advised the parties that the amendments have been allowed, refused or withdrawn.
-That the period of time for filing evidence in answer will extent to one (1) month after the Commissioner has advised the parties that the amendments have been allowed, refused or withdrawn.”
The delegate considered that the posed amendment would significantly alter the scope of the opposition and therefore that a stay was appropriate but that “it is necessary that an evidence period remain active until a stay is effected”.
Shell filed the present request for an extension of time on 3 February 2014 covering the period from 10 January to the commencement of the proposed stay on 29 January 2014. On 7 February 2014 the delegate advised the parties of his intention grant the extension subject to the parties requesting to be heard. Exxon notified the Commissioner of its request to be heard and written submissions were subsequently received from both parties.
Leave to amend the specification was granted on 26 February 2014 and advertised on 13 March 2014. As a result a third party has two months from that date to file a notice of opposition to the amendment otherwise the amendment will be allowed. If no opposition is filed it could then be expected that the period for filing evidence in answer proposed by the delegate would expire in June 2014.
The law
As the period for filing evidence in reply commenced after 15 April 2013, this request is to be determined under regulation 5.9 as amended on 15 April 2013 by the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No 1) – See subregulation 23.26(2)(Item 2). That item also provides that the reference in subregulation 5.9(1) to regulation 5.8 is taken to be reference to regulation 5.8 as in force before 15 April 2013 and paragraph 5.10(1)(b) and subregulation 5.10(2) as in force before 15 April 2013 are taken not to apply.
Consequently while the present opposition was filed before 15 April 2013, and generally is governed by the provisions of Chapter 5 of the regulations that applied before that date, extensions of the time for filing the evidence in reply are governed by the new scheme reflected in regulation 5.9 as in force from 15 April 2013.
Subregulation 5.9(1) gives the Commissioner the power to extend the evidentiary time periods:
The Commissioner may extend an evidentiary period mentioned in regulation 5.8:
(a) if requested in writing by a party; or
(b) on the Commissioner's own initiative.
The power to extend time is discretionary, as evidenced by the use of the word "may". This power is qualified by subregulation 5.9(2), which states:
The Commissioner may extend the period only if the Commissioner is satisfied that:
(a) the party who intended to file evidence in the period:
(i)has made all reasonable efforts to comply with all relevant filing requirements under this Chapter; and
(ii)despite acting promptly and diligently at all times to ensure the appropriate evidence is filed within the period, is unable to do so, or
(b) there are exceptional circumstances that warrant the extension.
Exceptional circumstances are defined in subregulation (5):
In this regulation:
exceptional circumstances includes the following:
(a)    a circumstance beyond the control of a party that prevents the party from complying with a filing requirement under this Chapter;
(b)   an error or omission by the Commissioner that prevents a party from complying with a filing requirement under this Chapter;
(c)    an order of a court, or a direction by the Commissioner, that the opposition be stayed pending the completion of a related proceeding or action under the Act.
Consequently the relevant questions are :
1. Has the party (and their attorney or agent) made all reasonable efforts to comply with all relevant filing requirements?
1. Was the failure to file the evidence in time despite the party (and their attorney or agent) acting promptly and diligently at all times to ensure the evidence is filed in time?
1. Were there exceptional circumstances that warrant the extension?
I can extend the time for filing evidence only if I am satisfied that the answer to questions i and ii is YES, or if I am satisfied that the answer to question iii is YES. If I am so satisfied, then I must consider whether there are any discretionary reasons why the extension should not be granted.
The request
The circumstances relevant to Shell’s efforts to file evidence in answer within the statutory period, such that they are apparent, can be summarised as follows:
a)The evidence in support was completed on 10 October 2013.
b)Shell’s patent attorney was not immediately available but commenced review of the evidence in “late October”.
c)An expert was engaged and two telephone interviews were conducted over several weeks “depending on the expert’s availability”.
d) In light of the expert’s comments discussions with counsel commenced in mid-November and extended into early December. One of the inventors was interviewed in mid-December and it was decided to pursue amendments of the claims with the nature of those amendments settled with counsel in mid-December.
e)Proposed amendments were sent to Shell for instructions on 18 December 2014. Their offices were closed for the Christmas break between 23 December and 6 January 2014. Instructions were then received on 8 January and the amendments filed the following day.
Other than its assertion that it has acted promptly and diligently Shell also relied on a consideration of the respective interests including the public interest which it says support the granting of an extension so that the proposed stay can come into effect.
Has Shell made all reasonable efforts to comply with all relevant filing requirements?
It is clear that the requirement in paragraph 5.9(2)(a)(i) is intended to import a consideration of the reasonableness of the relevant party’s conduct over the totality of the opposition proceedings rather than its compliance with the particular evidentiary period in question – here the period for filing evidence in answer – which is addressed by the more specific requirement of paragraph 5.9(2)(a)(ii).
With some exceptions, for example the period for requesting dismissal of an opposition, the requirement to file evidence in answer within the prescribed period will normally be the first requirement under Chapter 5 with which the patent applicant needs to comply. That is the situation in this case and consequently it is not necessary to consider separately whether Novartis made reasonable effort to comply with the time limit. If it has acted promptly and diligently in relation to the preparation and filing of the evidence in answer it will necessarily have also made all reasonable efforts to comply.
Was the failure to file the evidence despite acting promptly and diligently at all times?
It is readily apparent that the information provided by Shell’s attorney is inadequate to demonstrate that Shell has acted promptly and diligently toward the preparation of evidence. It seems that Shell’s efforts have been directed primarily toward preparing amendments to the claims and the extent to which attention has been given to the collection of evidence is not at all clear.
This is not to say that it is inappropriate for an applicant to pursue such amendments in the light of evidence in support however it is not in my view consistent with an applicant acting promptly and diligently at all times for it to focus on amendments to the exclusion of evidence gathering or for it to assume that the amendments will produce a stay which will result in the deferment of the evidentiary stage or indeed that the amendments will induce the opponent will withdraw.
Rather I would expect an applicant to demonstrate that it had promptly pursued amendments and that it otherwise took reasonable steps to prepare evidence to address the opposition at least to the extent that it was relevant to the claims as proposed to be amended. If such steps were taken in the present case these are not at all apparent.
Consequently I cannot be satisfied that Shell has failed to file its evidence in support despite acting promptly and diligently at all times.
Were there exceptional circumstances that warrant the extension?
Other than seeking to explain the delay in filing the evidence as indicated previously, Shell’s submissions focus on the respective interests that would be relevant to a discretionary consideration of the extension. However as indicated above, it is a feature of the amended legislation that discretionary considerations do not apply unless the Commissioner is satisfied that the requirements of subregulation 5.9(2)(a) or (b) are met. This is abundantly clear from regulation 5.9 itself but, if there is any doubt, the Explanatory Statement at page 19 states:
“New subregulation 5.9(2) addresses this issue by introducing a new test for determining whether an extension of time for filing evidence is justified. The Commissioner will not be able to extend time periods unless at least one of these conditions was made out. The party seeking the extension will bear the onus of convincing the Commissioner of this. Once the conditions in subregulation 5.9(2) are met, the Commissioner still has the discretion to consider whether or not it is appropriate that an extension of time be granted.”
Nevertheless the present circumstances are unusual in that a delegate of the Commissioner has already decided that a stay of the opposition is appropriate and that a commensurate extension of the evidentiary period is justified on that basis, save that an extension of time must be obtained to the point where the delegate made the proposal.
An exceptional circumstance anticipated by the legislation is “an order of a court, or a direction by the Commissioner, that the opposition be stayed pending the completion of a related proceeding or action under the Act”. Such a direction will be made where the Commissioner considers that amendments proposed by the applicant during the opposition process significantly alter the scope of the opposition. In those circumstances the legislation accepts that the requirement to pursue the evidentiary process promptly and diligently can be suspended. This is to allow the amendments to be considered and potentially opposed and subsequent evidence addressed to the specification as amended.
If amendments are proposed during the evidentiary term (including an extended period) which justify a stay then, being an exceptional circumstance, compliance with regulation 5.9(2)(a) is not required . Rather the considerations as to whether the stay ought to be granted prevail. In this light I consider the delegate to have been incorrect to have suggested that an extension of time is required to the point where he finally determined that a stay was appropriate. Rather in my view if a stay is considered appropriate this should have effect from the date the amendments are filed. This is when the potential for substantial change to the opposition arises and will impact on subsequent actions by the parties.
However, as I indicated above, parties should not assume that a stay will be granted and indeed will not be granted lightly given the public interest in the expeditious disposal of opposition proceedings. Therefore parties will need to ensure they continue to act promptly and diligently at all times particularly if a stay is not granted and they need to obtain an extension of time to complete their evidence. It is also the case that any extension of time required after a stay is lifted will also require the party to have acted promptly and diligently at all times. This being the case I do not believe, as suggested by Exxon, that the intent of regulation 5.9 is undermined.
The delegate has decided that a stay of the opposition is appropriate in all the circumstances. I have no basis to vary that decision so accordingly I formally direct that the opposition is stayed until the Commissioner has advised the parties that the amendments have been allowed, refused or withdrawn. Pursuant to regulation 5.9 I consequently find that the stay is an exceptional circumstance that warrants an extension of time.
What length of extension is reasonable in the circumstances?
Subregulation 5.9(3) requires the Commissioner to determine the length of the extension having regard to what is reasonable in the circumstances. I consider the extension proposed by the delegate to be reasonable, that is, to one (1) month after the Commissioner advises the parties that the amendments have been allowed, refused or withdrawn.
Conclusion
I consider that a stay of the proceedings is appropriate and that the stay constitutes an exceptional circumstance that warrants an extension of time.
Consequently I extend the time for filing evidence in answer to one (1) month after the Commissioner advises the parties that the amendments have been allowed, refused or withdrawn. As the amendments were filed on 9 January 2014 within the ordinary evidentiary period no intervening extension of time is required.
Costs
The present matter arose to some extent due to the delegate’s belief that an extension of time was required between the date when a stay was requested until the date he formally proposed a stay to the proceedings. As I indicated above I do not consider such an intervening extension of time is required.
Shell has been successful in obtaining a stay and extension of time but given these circumstances I do not believe that it is appropriate to make any award of costs.
P M Spann
Deputy Commissioner of Patents