Fletcher Insulation Pty Ltd v Anton Brandt Buenemann - [2015] APO 12

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Fletcher Insulation Pty Ltd v Anton Brandt Buenemann [2015] APO 12

Patent Application: 2009236041

Title:A roofing bracket

Patent Applicant:  Anton Brandt Buenemann
Opponent:  Fletcher Insulation Pty Ltd
Delegate:  Dr M-A. Fam
Decision Date:  31 March 2015
Hearing Date:  Written submissions completed on 20 March 2015
Catchwords:  PATENTS – award of costs in an opposition to an extension of time – opposition unsuccessful – no award of costs made

Representation: Patent applicant: Think IP Strategy
Opponent:Phillips Ormonde Fitzpatrick

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2009236041

Title:A roofing bracket

Patent Applicant: Anton Brandt Buenemann
Date of Decision: 31 March 2015
DECISION
I make no award of costs.
REASONS FOR DECISION
Background

The present application was filed by Anton Brandt Buenemann on 12 November 2009. The application subsequently lapsed as a result of failure to pay the 4^th year continuation fee due on 12 November 2013. An application for an extension of time to pay the fee was lodged on 23 May 2014.
A notice of opposition to the request for the extension of time was filed by Fletcher Insulation Pty Ltd (Fletcher) on 26 August 2014.
The parties were heard by means of written submissions and a decision issued on 13 March 2015 granting the extension of time (Fletcher Insulation Pty Ltd v Anton Brandt Buenemann [2015] APO 10).
In that decision I made the following statement in regard to costs:
“The position of the parties on the matter of costs is ambiguous. Both parties initially submitted that costs be awarded in their favour. However, Fletcher subsequently submitted that even if the application for the extension of time is allowed, costs should be awarded in its favour. Mr Buenemann later submitted that Fletcher’s conduct warrants an award of costs against it and suggested that he wished to be heard separately on the matter of costs.
It is therefore not clear what each party seeks in the award of costs. In order to ensure procedural fairness, I allow both parties 7 days from the date of this decision to provide written submissions on the matter of costs.”
Both parties filed submissions with regard to costs.
Relevant law
Section 210(1) states:
“The Commissioner may, for the purposes of this Act:
….
(d)award costs against a party to proceedings before the Commissioner.”
Under regulation 22.8(1), the Commissioner must not award costs in proceedings, other than costs specified in Schedule 8 of the Regulations, unless each party to the proceedings has had a reasonable opportunity to make submissions on the matter of the award of those costs.
The power of the Commissioner to award costs is discretionary and requires consideration of the relevant facts.
Consideration of submissions
The parties agreed that in general costs follow the event. However, both Fletcher and Mr Buenemann provided further submissions regarding the award of costs. Fletcher submitted that despite the application for the extension of time being allowed, costs should be awarded in its favour, or alternatively, no award of costs should be made. Mr Buenemann submitted that Fletcher’s conduct warrants an award of costs against it, and on an indemnity basis.
In their submissions the parties raised several issues and I will consider each of these in turn.
Success of the opposition
Mr Buenemann submitted that the opposition failed on all grounds, with Ground 2 dismissed, and a finding against Fletcher on the remaining Ground 1 and Ground 3 in the decision of 13 March 2015. Consequently, there is no justification for a reduction in costs, nor an award of any costs against him.
Fletcher submitted that although the opposition was not successful, the declaration originally filed by Mr Buenemann in support of the application for the extension of time was inadequate. In particular, all of the information relied on by the Delegate in reaching the decision that the extension of time should be granted was provided in Mr Buenemann’s subsequent declarations. Fletcher further stated that if this information had been provided when the application for the extension was originally filed, the opposition to that application may have been unnecessary.
In my previous decision at paragraphs [36] and [43], I agreed that Mr Buenemann’s first declaration did not provide much detail on the circumstances that resulted in the failure to pay the continuation fee. At paragraphs [26], [36], [37] and [43], I indicated that his subsequent declarations set out information relevant to the consideration of Ground 1 and Ground 3 of the opposition.
As the opposition was unsuccessful, this weighs in favour of awarding costs against Fletcher. However, this is offset by the fact that Mr Buenemann provided important information during the opposition process rather than with his initial application for the extension of time.
Penalty already incurred for brevity of declaration filed with the application for the extension of time
Mr Buenemann submitted that he had already been penalised for the brevity of the declaration filed with the application for the extension of time. Mr Buenemann made reference to the decision of the Delegate of the Commissioner in respect of the request to dismiss the opposition (Fletcher Insulation Pty Ltd v Anton Brandt Buenemann [2014] APO 73), where costs were awarded against him.
The request for dismissal of the opposition has been treated as a separate proceeding before the Commissioner for the purpose of costs.
Costs on an indemnity basis
Mr Buenemann submitted that in the present proceedings, Fletcher’s conduct created special circumstances that justified an award of indemnity costs against it.
The costs of proceedings before the Commissioner are generally awarded in accordance with Schedule 8 of the Regulations.
The award of costs on an indemnity basis has been considered by the courts. In Colgate‑Palmolive Company and Another v Cussons Pty Limited [1993] FCA 536; 28 IPR 561 at 569 Sheppard J stated:
“In consequence of the settled practice which exists, the court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the court in departing from the usual course.”
At 570 Sheppard J noted circumstances that would warrant the award of costs on an indemnity basis. These include the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud, evidence of particular misconduct that causes loss of time to the court and to other parties, the fact that the proceedings were commenced or continued for some ulterior motive or in wilful disregard of known facts or clearly established law, and the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions.
Mr Buenemann submitted that Fletcher’s entire case rested on an unsupported allegation that he had lied under oath and that this is clearly akin to an allegation of fraud. It was further submitted that the most flagrant of these allegations were contained in Ground 2 of the opposition and that Fletcher continued to rely on the subject matter of Ground 2 even after it was dismissed. Mr Buenemann indicated that these circumstances meet the threshold required for an award of costs on an indemnity basis.
I note that in regard to the subject matter of Ground 2, my previous decision at paragraph [16] indicated that the evidence and parties’ submissions were only considered in view of their relevance to Ground 1 and Ground 3.
Allegations of fraud are serious and require substantiation. Mr Buenemann states that Fletcher has made an unsupported allegation that he lied under oath, however he does not specifically identify whereabouts in the evidence or submissions that an allegation of lying is made. It is possible that Mr Buenemann is referring to the matter of reminder notices sent during the grace period. As discussed in my previous decision at paragraphs [25] and [29], Fletcher submitted that it is unlikely that Mr Buenemann was not provided with a reminder notice during the grace period and in response Mr Buenemann indicated that he did not recall receiving any such notices. I do not consider that this amounts to an allegation that Mr Buenemann lied under oath.
Mr Buenemann also submitted that given the context of the broader dispute between the parties, Fletcher filed the opposition in an effort to disrupt and delay the certification of his innovation patent application. Mr Buenemann stated that Fletcher’s case was unfounded as it was borne out of a desire to delay his patent application, rather than from any factually based concern as to his eligibility for an extension of time. It was submitted that this was a further reason why an order of indemnity costs in his favour is warranted.
The grounds of opposition were considered by a Delegate of the Commissioner in relation to the request for dismissal of the opposition (Fletcher Insulation Pty Ltd v Anton Brandt Buenemann [2014] APO 73). The Delegate found that the particulars set out a case for Ground 1 and Ground 3 that was “real and not fanciful”. Therefore the filing of the opposition was not without merit.
I also note that my previous decision analysed in detail the evidence and submissions and this would not be required in an opposition with clearly no merits.
Mr Buenemann further stated that the case was prolonged and additional work was created by Fletcher’s behaviour in persisting with its false allegations, as he was forced to repeatedly answer them in evidence and submissions. As indicated above, I do not consider that a case of false allegations has been made out.
I do not consider that the present circumstances warrant an award of costs on an indemnity basis.
Conclusion
The opposition to the application for an extension of time was unsuccessful and ordinarily I would award costs against Fletcher. However, Mr Buenemann provided important information during the opposition process rather than with his initial application for an extension of time. Consequently I make no award of costs.
Dr M-A. Fam
Delegate of the Commissioner of Patents