Fonterra Co-Operative Group Limited v Leprino Foods Company
[2014] APO 89
•24 December 2014
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Fonterra Co-Operative Group Limited v Leprino Foods Company [2014] APO 89
Patent Application: 2008325000
Title:Non-fat dry milk production processes for cheesemaking
Patent Applicant: Leprino Foods Company
Opponent: Fonterra Co-Operative Group Limited
Delegate: Dr S.D. Barker
Decision Date: 24 December 2014
Hearing Date: Written submissions completed on 21 November 2014
Catchwords: PATENTS – extension of time to file evidence in reply – regulation 5.9 – actions were prompt and diligent at all times – extension of one week is appropriate – extension granted
Representation: Patent applicant: Davies Collison Cave
Opponent:AJ Park
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2008325000
Title:Non-fat dry milk production processes for cheesemaking
Patent Applicant: Leprino Foods Company
Date of Decision: 24 December 2014
DECISION
I grant an extension of time to file evidence in reply until 3 October 2014.
I award costs according to Schedule 8 against Fonterra Co-Operative Group Limited.
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
This matter relates to patent application 2008325000 in the name of Leprino Foods Company (Leprino). The application was advertised as accepted on 25 July 2013 and a notice of opposition to the grant of a patent was filed by Fonterra Co-Operative Group Limited (Fonterra) on 25 October 2013.
Fonterra filed a statement of grounds and particulars on 27 January 2014. Evidence in support was completed on 28 April 2014. Evidence in answer was completed by Leprino on 28 July 2014. Evidence in reply was due on 30 September 2014. On this day, Fonterra has requested an extension of time for filing evidence in reply until 10 October 2014.
The delegate advised on 3 October 2014 that he required further information in order to be satisfied that an extension was appropriate. Fonterra filed further information in support of the request for extension on 10 October 2014.
The delegate advised on 14 October 2014 that he was not satisfied that an appropriate case had been made out in regard to the request for an extension of time and that the extension would therefore be refused unless a hearing was requested within seven days.
On 21 October 2014 the opponent requested a hearing to dispute the refusal of the extension of time. The hearing was conducted by means of written submissions.
The opponent filed submissions in support of the extension of time request on the 5 November 2014 and the applicant completed their submissions on 12 November 2014. Final submissions were filed on 21 November 2014.
The law
On 15 April 2013, the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No 1) (the Amendment Regulation) commenced. The Amendment Regulation significantly amended the Patents Regulations (the Regulations) as they apply to patent oppositions. The law governing extensions of time to file evidence in a patent opposition depends upon the date on which the opposition commenced. Where the opposition commenced on or after 15 April 2013 (as in the present case), the extension is governed by regulation 5.9 of the Regulations as in force on 15 April 2013.
Subregulation 5.9(2) 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.
10. 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.
11. These provisions have been considered by the Commissioner in TRED Design Pty Ltd v Julie-Anne McCarthy and Bradley McCarthy [2013] APO 57 (the TRED decision) and Merial Limited v Novartis AG [2013] APO 65 (the Merial decision). The principles applied in those decisions, which I accept as correct, are that I must ask myself the following questions:
1.Has the party (and their attorney or agent) made all reasonable efforts to comply with all relevant filing requirements?
2.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?
3.Were there exceptional circumstances that warrant the extension?
12. As noted in the Explanatory Statement accompanying the Amendment Regulation:
"The Commissioner will not be able to extend time periods unless 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. In applying the test, the Commissioner will not be required to give a direction to extend a period solely because of delays caused by a legal representative failing to act promptly or diligently, by difficulties in obtaining expert evidence that could have been anticipated and acted on or by attempts to settle the proceedings.
Where a party cannot satisfy the Commissioner that an extension is justified under the test, the Commissioner will not have the power to give a short extension to allow the filing of evidence immediately available or to validate evidence filed out of time."
13. If the Commissioner is satisfied that an extension is appropriate, the Commissioner must then determine the length of the extension (subregulation (3)):
The Commissioner must determine the length of the extended period having regard to what is reasonable in the circumstances.
The application for extension of time
14. The opponent's application for extension of time in which to file evidence in reply, filed 30 September 2014, stated the following:
“We have lodged … unsworn copies of the finalised affidavit in reply of Hilton Clement Deeth and statutory declaration in reply of Wayne Donald Austin.
The opponent requests an extension of time for one week (ie, to 10 October 2014) in which to file the sworn versions of Mr Deeth's affidavit and Mr Austin's declaration. Our reasons for this request are as follows:
·The opponent has completed its evidence in reply, and only seeks a short extension to allow for completion of the formalities of swearing/declaring the evidence.
·Professor Deeth is having his affidavit sworn today, but we have not yet received it. We hope that the sworn version will be received before the end of the day, in which case we will file it immediately.
·Mr Austin has been able to complete the form of his declaration by today, but he will be away from his office until this Thursday and will not be able to sign his declaration before then. As soon as we receive Mr Austin's signed declaration we will file it.”
15. A delegate of the Commissioner informed Fonterra on 3 October 2014, that their request had not included sufficient information to satisfy that the extension was appropriate. Accordingly, the delegate requested further submissions from Fonterra in support of the extension of time, and these were filed on 10 October 2014. Having considered these further submissions, the delegate notified Fonterra of his intention to refuse the application for extension of time on 14 October 2014.
16. Fonterra filed comments and a detailed chronology of events in support of this hearing to dispute the refusal of the extension of time on the 5 November 2014, that I can summarise as follows:
29 July 2014 Fonterra served with the applicant’s evidence in answer 29 July – 12 August 2014 Fonterra reviews applicant’s evidence and devises strategy for preparing evidence in reply 12 August 2014 Fonterra requests expert evidence from Professor Deeth 14 August 2014 Professor Deeth agrees in principle to provide expert evidence 14 – 22 August 2014 Professor Deeth works on corresponding NZ opposition 26 August 2014 Professor Deeth confirms he will provide expert evidence 27 August 2014 Professor Deeth provided with evidence filed by the applicant 3 September 2014 Professor Deeth completes review of applicant's evidence and provides written comments to Fonterra 8 September 2014 Fonterra schedules phone call with Professor Deeth 9 – 10 September 2014 Fonterra has lengthy phone discussion with Professor Deeth & Deeth provides further written comments and documents supporting his opinion 9 September 2014 Fonterra provides applicant’s evidence to Wayne Austin and requests his assistance as an expert witness 10 – 27 September 2014 Fonterra prepares draft of Professor Deeth affidavit 12 – 26 September Mr Austin provides comments to Fonterra and Fonterra work on draft of Austin affidavit 26 September 2014 Fonterra sends draft affidavit to Mr Austin 27 September 2014 Fonterra sends draft affidavit to Professor Deeth 29 September 2014 Professor Deeth & Fonterra work on redrafting the Deeth affidavit
Fonterra files unsworn copy with IP Australia30 September 2014 Mr Austin & Fonterra finalise the Austin affidavit
Fonterra files unsworn copy with IP Australia2 October 2014 Fonterra files sworn copy of the Deeth affidavit with IP Australia 3 October 2014 Fonterra files sworn copy of the Austin affidavit with IP Australia Has the party made all reasonable efforts to comply with all relevant filing requirements?
17. In this case I consider that the question of whether Fonterra has made all reasonable efforts to comply with the relevant filing requirements is best answered by an analysis of whether they acted promptly and diligently (in the following paragraphs).
Was the failure to file the evidence despite acting promptly and diligently?
18. In considering this question recently in Fugro Airborne Surveys Corp v Geotech Airborne Limited [2014] APO 23, I said at [20]:
"A party seeking an extension of time will assist the Commissioner (and advance their own cause) if they provide information about what they did, when they did it, and how long those actions took. When considering such information, it is relevant to consider whether there have been any significant unexplained delays. The presence of significant delays without a reasonable explanation is the antithesis of acting promptly and diligently."
19. Fonterra only provided a brief explanation of the reasons for any delays, even after the delegate had given them the opportunity to provide further information. Only once the delegate had decided to refuse the extension of time, resulting in the present hearing, did Fonterra provide a full chronology of events backed up by detailed reasons for any significant periods of delay. It would have been simpler, and more straightforward, for Fonterra to have provided this information at the time of applying for an extension of time.
20. Leprino raised several points in relation to the chronology which I will deal with in turn.
21. Firstly, Leprino submittted that Fonterra’s chronology was in error when stating that from 14‑22 August they were working with Professor Deeth on the parallel New Zealand opposition, because the sworn affidavit by Deeth was filed in New Zealand on 18 August 2014. I am satisfied that the chronology was not erroneous (as clarified in correspondence dated 21 November 2014) as:
"although Professor Deeth's affidavit was sworn on 18 August, the affidavit was wrongly executed. We worked with Professor Deeth from 18 to 22 August to obtain a properly executed affidavit"
22. Secondly, Leprino make numerous submissions to the effect that Fonterra should not have taken as long as they did in preparing evidence because the evidence prepared is essentially the same as that filed for the parallel opposition occurring in New Zealand. Namely, that Professor Deeth’s evidence included “no new substantive arguments”, and that the New Zealand evidence was a “photocopy of the Australian affidavit”, etc.
23. Whilst it might be expected that Fonterra may have gained some advantage due to the similarity of the parallel oppositions in Australia and New Zealand, it is impossible for me to quantify what that advantage is. Notwithstanding the differences between the National laws in these two jurisdictions I am not aware of many of the details of the New Zealand opposition, including which claims are being contested, and on what grounds. In the absence of such details, the drawing of any inferences about the level of advantage gained by Fonterra would be purely speculative. Accordingly I cannot give these submissions much weight.
24. Thirdly, Leprino submitted that many of the explanations for Fonterra’s chronology were “not consistent with diligent action”.
25. Leprino question why Fonterra’s evidence in reply “was not initiated” until 12 August, given they had received evidence in answer on the 29th July. However Fonterra have explained that during this time they were reviewing the applicant’s evidence and devising a strategy for preparing evidence in reply. I am therefore satisfied that the period of time which elapsed, being approximately two weeks, was not a significant unexplained delay in these circumstances.
26. Leprino submit that “it should not take from 30 September until 2 October to obtain an appropriate signatory” in relation to the Deeth affidavit, and that “it should not take from 30 September until 3 October to obtain an appropriate signatory” in relation to the Austin affidavit. However I do not consider that these periods of time are a significant unexplained delay in the circumstances.
27. Finally, Leprino also stated that they have been unfairly delayed and disadvantaged in preparing their case because of Fonterra’s actions and asserted that Fonterra has shown a pattern of delaying in the corresponding New Zealand opposition. However, given that the sworn affidavits were in fact filed 3 days after their due date, I am not satisfied that there is a significant issue of unfair delay in the present case and I am not convinced of the alleged pattern of behaviour.
28. Looking at the actions of Fonterra as a whole, there was a period at the start when there was activity in reviewing the applicant’s evidence and planning a strategy for reply. There was a point at which it was determined that an additional expert witness was required to support their submissions. There was also an impact on Fonterra’s legal team in the form of an unexpected illness, which I am satisfied was of sufficient severity and duration to have had a significant impact on the team's capabilities. Despite this, both experts’ declarations were largely completed by their due date, however it remained for them to be properly executed.
29. In light of the submissions made by Fonterra to this hearing, I cannot see any significant periods of unexplained delay.
30. I am satisfied that Fonterra have been prompt and diligent, and that they have made all reasonable efforts to comply with the relevant filing requirements.
Were there exceptional circumstances?
31. It is unnecessary to determine whether there are exceptional circumstances under paragraph 5.9(2)(b), as I have already determined the criteria of 5.9(2)(a) have been satisfied.
Discretionary matters
32. Once the mandatory requirements of paragraphs 5.9(2)(a) or 5.9(2)(b) have been met, an extension is not automatic. The Commissioner "may" extend the period for filing evidence. I can see no reason not to exercise the discretion.
Conclusion
33. I am satisfied that an extension of time is appropriate.
34. Finally, I need to consider what length of extension is reasonable in the circumstances. The executed version of the Austin declaration, representing the completion of Fonterra’s evidence in reply, was filed on 3 October 2014. I consider it is reasonable to extend the time until that date.
Costs
35. Some of the information which established that Fonterra was prompt and diligent at all times was only made in Fonterra’s submissions to the hearing rather than in their application for an extension of time where this information should have been provided. In view of this, I think it is appropriate that Fonterra bear the costs in this instance.
Dr S.D. Barker
Delegate of the Commissioner of Patents
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