ExxonMobil Upstream Research Company v Shell Internationale Research Maatschappij B.V - [2013] APO 22

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
ExxonMobil Upstream Research Company v Shell Internationale Research Maatschappij B.V.
[2013] APO 22

Patent Application: 2006291954

Title:Process and apparatus for removal of sour species from a natural gas stream

Patent Applicant:                   Shell Internationale Research Maatschappij B.V.
Opponent:  ExxonMobil Upsteam Research Company
Delegate:  Dr S.D.Barker
Decision Date:  5 March 2013
Hearing Date:  Written submissions completed on 24 January 2013
Catchwords:  PATENTS – extension of time to serve evidence in reply – nature and significance of some of the evidence justifies extension – extension granted – no award of costs

Representation: Patent applicant: Griffith Hack
Opponent:Watermark

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2006291954

Title:Process and apparatus for removal of sour species from a natural gas stream

Patent Applicant: Shell Internationale Research Maatschappij B.V.
Date of Decision: 5 March 2013
DECISION
Extension of time to serve evidence in reply granted.
No award of costs.
REASONS FOR DECISION

Patent application number 2006291954 was filed by Shell Internationale Research Maatschappij B.V (Shell). ExxonMobil Upstream Research Company (ExxonMobil) has opposed the grant of a patent. The opposition is presently in the evidence in reply stage. ExxonMobil has requested an extension of time to serve its evidence in reply. Shell has objected to the extension, and asked for hearing. Both parties have filed written submissions.
The relevant law
Regulation 5.10(2) of the Patents Regulations 1991 gives the Commissioner the power to extend the time for taking a step prescribed in Chapter 5, which in this case is the service of evidence in reply. The Commissioner must not grant an extension unless satisfied that the parties have been notified of the application for extension (reg. 5.10(5)(b))and have been given a reasonable opportunity to be heard (reg. 5.10(5)(c)(i)), and is reasonably satisfied the extension is appropriate (reg. 5.10(5)(c)(ii)). In the present case the parties have been notified and have had an opportunity to be heard. The only remaining question is whether it is appropriate to extend the time.
The considerations relevant to this question have been considered several times by the Federal Court (Ferocem Pty Ltd v Commissioner of Patents [1994] FCA 981; 28 IPR 243, A Goninan & Co Ltd v Commissioner of Patents [1997] FCA 424; 38 IPR 213 and National Starch & Chemical Co v Commissioner of Patents [2001] FCA 33; 50 IPR 398). In summary, the power to extend time is discretionary, so it is necessary to give genuine and proper consideration to all relevant considerations. (Ferocem at 247-8, Goninan at 220). Relevant considerations include:
a)The reason why the evidence was not served earlier (Ferocem at 247)
b)The public interest in determining a serious opposition on its merits (Goninan at 222)
c)The interests of the parties (Ferocem at 247)
The extension
The application for extension of time states:
"Evidence in reply is to comprise the following further declarations:
(a)declaration from expert Costa Tsesmelis responding to Mr Dugan's declaration in reply;
(b)declaration from expert Costa Tsesmelis Mr Tsesmelis [sic] concerning US Patent No 2996891 which anticipates claim 13 at least; and
(c )declaration from the undersigned placing two documents regarding Cool Energy Ltd activities on cryogenic separation in Australia during 2005. The opposed application was assigned from Cool Energy Ltd to Shell Internationale Maatschappij BV.
Declaration (a)
Preparation of declaration (a) is in an advanced state with draft declaration (running to some 30 pages) currently under Mr Tsesmelis' review. This declaration responds to Mr Dugan's understanding of the common general knowledge in Australia and is submitted to prove that cryogenic separation processes involving solidification of acid gases from natural gas streams were common general knowledge in Australia before the priority date, at least in part because of activities of named inventor, Cool Energy Ltd and other research organisations prior to the priority date.
Further, the declaration is submitted to prove that it would have been obvious to make apparatus for removing acid gases from natural gas streams in a first solidification stage; and a second absorption (salvation) stage. Absorption is a commonly practised second stage acid gas removal process following membrane separation or bulk fractionation for bulk removal of acid gases. The draft declaration directly addresses this important issue in the opposition.
Declaration (a) also shows:
(1) the close comparison between the common general knowledge CFZ process and the presently claimed process;
(2) development of solidification processes for removal of acid gases from natural gas streams in Australia prior to 15 September 2005;
(3) the close relevance of Engdahl US 5819555 to the opposed claims.
In the previous extension application, Opponent expressed confidence that this declaration would be complete by the present date. Unfortunately, Mr Tsesmelis had extensive business commitments through October and then most of November involving several client workshops and other activities. This significantly reduced the time available for working on the opposition and providing the detail required to properly reply to Mr Dugan's evidence.
Declaration (b)
Declaration (b) is in draft form and shows that apparatus for removing acid gases involving solidification and absorption processes was not novel in view of US 2996891. Opponent's intention was to file this declaration by the present date. In the event, priority was given to declaration (a) with focus now moving to completion of draft declaration (b). The Opponent submits that such prioritisation was reasonable given the extreme importance of a complete response to Mr Dugan's evidence. Opponent notes that US 2996891 has been in evidence for just over a month enabling the Applicant to review the document.
From the above, it can be seen that the opponent is serious, that preparation of evidence has been diligent given the expert's business commitments and the evidence currently available and, in preparation, is of such nature and significance that it is in the public interest, as well as the Opponent's interest, for a further two month extension of time to be permitted. As to the Applicant's interest, there is clearly a serious opposition justifying the further time necessary to properly prepare the remainder of evidence in reply."
Explanation of delay
The reasons advanced seem to come down to giving priority to declaration (a) over declaration (b), and declaration (a) could not be completed because Mr Tsesmelis was unable to spend time on it due to work commitments. I am surprised that ExxonMobil are saying that their declarant was unavailable for two months, and that nothing else could be done. Shell submitted that it is not surprising that Mr Tsesmelis has other commitments, and that the real issue is whether ExxonMobil had made genuine efforts to finalise the evidence. The explanation seems to explain some aspects of the delay, but leaves much unsaid.
Public interest
When considering the public interest, it is necessary to form a view as to the nature and significance of the evidence that is being prepared (Goninan at 225-6). The evidence consists of declarations by Mr Tsesmelis and Mr Baddeley. Declaration (a) by Mr Tsesmelis is said to respond to matters raised by Mr Dugan in his declaration in answer. The description of this declaration indicates that it may well be significant. I consider that the public interest favours the introduction of declaration (a).
Shell pointed out that US 2996891 was not particularised (declaration (b)), nor were concerns about Cool Energy's activities (declaration (c)). Shell characterised these aspects as further evidence rather than evidence in reply. I will deal with each separately. ExxonMobil said that US 2996891 was evidence in reply because:
"US Patent No 2996891 is an invalidating reference which directly contradicts statements made at paragraphs 4.21, 4.25 and 4.26 of Mr Dugan's declaration."
It seems clear that declaration (b) addresses comments made by Mr Dugan, and does so by reference to a new document. I agree with the delegate in Government of the USA v University of Queensland and CSL [2001] APO 51, "the fact that a document is new does not, per se, mean that it is not in reply". However, in this case it is apparent that the new document is intended to constitute a citation against claim 13, unlike the situation in the CSL decision (where the new document was an aid to the interpretation of the cited prior art and the invention defined in the opposed application). The US Patent is introduced as a new citation, and that cannot be done by evidence in reply. The public interest does not support the introduction of new evidence in chief in the guise of evidence in reply.
Declaration (c) introduces two exhibits, which are said to provide more description of the pilot plant mentioned by Mr Dugan in his declaration. ExxonMobil suggests that this is a matter going "to the core" of contentions on inventive step. Exhibit RHB-3 is a one page article on the plant, with very little detail. Exhibit RHB-4 is a letter from Australian Development Capital Ltd to the Australian Stock Exchange, again with very little detail. It is not obvious that this goes to the core of inventive step. Based on the explanation provided, the significance of declaration (c) appears low.
Interests of the parties
As is normal in such matters, the interests of the parties are opposed. I do not believe that a detailed weighing of the relative interests of the parties is justified in this case.
Conclusion
There is a case to extend the time to serve declaration (a). Declarations (b) and (c) are different. The low significance of this evidence means that the balance does not favour extending time. It is appropriate to give an extension sufficient to allow for the finalisation of declaration (a), but not declaration (b) or (c)).
All declarations have been served, and an extension sufficient to allow the service of declaration (a) will have the effect that the other declarations were served within time (as they were served by the time that declaration (a) was served). This completes the evidence in reply, and the matter can now be set for hearing of the opposition to grant.
Costs
While ExxonMobil has been successful in the extension, they have been unable to justify the extension in relation to declarations (b) and (c). Both parties can be seen to have been successful, so it is appropriate to make no award of costs.
Dr S.D.Barker
Delegate of the Commissioner of Patents