G & J Koutsoukos Holdings Pty Ltd v Capral Aluminium Limited
[2003] APO 34
•26 August 2003
OFFICIAL NOTICE
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 742820 in the name of G & J KOUTSOUKOS HOLDINGS PTY LTD
Title: Security Closure
Action: Opposition under Section 59 by CAPRAL ALUMINIUM LIMITED, and objection to an application under Regulation 5.10(2) for an extension of time in which to serve evidence in answer
Decision: Issued 26 August 2003.
Abstract
This was an opposition to a request for an extension of time to file evidence in answer. The evidence in support had comprised just one statutory declaration, and the applicant had had issued to the declarant a Notice Requiring Production seeking all the background documents leading to the provision by the declarant of his statutory declaration, including instructions, communications, etc, from the opponent and the opponent's attorney. The need to wait for the outcome of this Notice Requiring Production action was the only reason advanced for being granted the extension in time to file the evidence in answer.
The extension was allowed. The public interest and the interest of the applicant, which were in favour of the extension, were considered to outweigh the interest of the opponent, which was against the extension. The factors bearing upon whether an adequate justification for the delay had been provided seemed evenly balanced.
Costs were awarded against the opponent.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No. 742820 by G & J Koutsoukos Holdings Pty Ltd, opposition under section 59 by Capral Aluminium Limited, and objection to an application under regulation 5.10(2) for an extension of time in which to serve evidence in answer
BACKGROUND
Patent application 742820 was filed on 31 May 2000 by WA Security Products Pty Ltd. It is associated with provisional application PQ 1129 filed on 22 June 1999. The application was advertised accepted on 10 January 2002. WA Security Products Pty Ltd has since changed its name to G & J Koutsoukos Holdings Pty Ltd (Koutsoukos).
Capral Aluminium Limited (Capral) filed a notice of opposition to the grant of a patent on 10 April 2002. On 10 July 2002 Capral served its statement of grounds and particulars and, after three extensions of time totalling six months, it served its evidence in support on 7 April 2003. The final extension of time was objected to by WA Security Products Pty Ltd (as it was then) and was set for hearing, but the hearing was cancelled on the undertaking of Capral to serve its evidence in support by the date set for the hearing. This it did, or at least close enough to the date to be to the satisfaction of WA Security Products Pty Ltd. That evidence comprises just one statutory declaration, by a Mr Andrew Craig Edlin.
Koutsoukos thus had until 7 July 2003 to file its evidence in answer. On 23 May 2003, in an act central to this objection to an extension of time to file that evidence, Koutsoukos filed a request to the Commissioner to issue, under subsection 210(c), a Notice Requiring Production of a Document. This notice was to be directed to Mr Edlin, and essentially it required all the background documents leading to the provision by him of his statutory declaration, including instructions, communications, etc, from Capral and its patent attorneys. The notice was issued on 1 July 2003.
On 31 July 2003 the patent attorney for Capral notified the Commissioner of Patents that his firm had received instructions from Mr Edlin, who, according to the notification, was currently in Thailand. The notification asserted that a lawful excuse existed for non-compliance with the notice, and stated that practically all of the documents for which production was being sought had not been retained by Mr Edlin.
In reaction to this, on 8 August 2003 (subsequent to the hearing of the present matter) Koutsoukos requested that the Commissioner direct Mr Edlin:
"to file and serve a statutory declaration made by him, in which he deals with the following matters, by way of explanation as to his not having allegedly not retained each of the categories of documents described in Cullen & Co's letter, and referable to the categories in the Notice to Produce, these being, relevantly: …….[the text of the Notice Requiring Production then followed]."
The Commissioner has responded to this latest request by requiring a statutory declaration from Mr Edlin that he has not retained any of the documents in the Notice Requiring Production, and in so far as the Notice Requiring Production is concerned that matter rests there for the present.
REASONS FOR THE EXTENSION OF TIME
In the meantime, on 4 July 2003 Koutsoukas requested an extension of time to file its evidence in answer. The Notice Requiring Production is the only circumstance relied upon in the request, which relevantly reads as follows:
"We are currently awaiting the outcome of our recent request that the Commissioner of Patents issue a Notice Requiring the Production of a Document.
The material intended to be sought by way of the Notice Requiring the Production of a Document contains information we require in order to complete the preparation of our evidence in answer."
THE HEARING
Capral objected to the extension and the matter came to hearing in Canberra on 6 August 2003. The patent applicant (Koutsoukus) was represented by Mr R.J.L. McCormack of counsel, instructed by Mr M.R. Finn of Wray & Associates, Perth. The opponent (Capral) was represented by their patent attorney, Mr Michael Angliss of Cullen & Co, Brisbane. Both parties appeared by telephone and provided helpful written submissions prior to the hearing.
THE LAW
Chapter 5 of the Patents Regulations sets out the procedure and time limits governing opposition proceedings. According to regulation 5.8, the time for serving evidence in support of an opposition is three months from the date of serving the statement of grounds and particulars. A party to an opposition may apply to the Commissioner to extend this time limit pursuant to regulation 5.10(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 a copy of the application on the other party."
10. Regulation 5.10(5) relevantly provides that before granting an extension of time I must be reasonably satisfied that the extension is appropriate in all the circumstances, and in this I am guided by the well established principles set out in Ferocem Pty Ltd v Commissioner of Patents 28 IPR 243 and A Goninan & Co Ltd v Commissioner of Patents 38 IPR 213.
11. These principles do not demand an imperative compliance with particular requirements, but rather, as stated by Burchett J in Ferocem, involve:
"a balancing exercise, in which competing considerations must be taken into account. There are the interests of the persons directly concerned in the application and opposition in question. There are also public interests, which are not necessarily all 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 the professional standards being maintained by those who deal with the office. But they also include, as Kitto J pointed out in Kaiser Aluminium & Chemical Company v 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 that it should be shut out in consequence of a failure in procedure, lamentable though the failure may be.'"
12. In Goninan Sackville J said that in order to give proper consideration to the public interest in opposition proceedings being determined on their merits, it is necessary to consider the nature of the evidence for which the extension of time is sought and the significance of that evidence for the opposition. The principles applicable to the broad discretion conferred by regulation 5.10 to grant extensions of time were more recently considered in National Starch & Chemical Company v Commissioner of Patents 50 IPR 398 where Goldberg J went further in saying that, in the absence of direct material on the point, the significance of the evidence sought to be adduced might be determined from:
· the technical nature of the invention apparent on the face of the specification;
· the technical nature of the documents referred to in the statement of grounds and particulars;
· the statement of grounds of opposition and the particulars relating to each ground;
· the role and importance of experts in an opposition proceeding; and
· statements in submissions by the party seeking the extension on the nature of the evidence to be relied upon.
13. Finally, regard must also be had to the comments of the Administrative Appeals Tribunal in Sanyo v Commissioner of Patents 36 IPR 470 at 479:
"The decisions of the courts concerning the approach to be taken to the exercise of a discretion to extend time are now well established and include:
· in the absence of nominated factors against which the discretion is to be exercised, regard should be had to the 'subject matter, scope and purpose of the Act': per Mason J (as he then was) in Minister for Aboriginal Affairs v Peko-Wallsend Ltd(1986) 162 CLR 24 at 39-40; 66 ALR 299. A further exposition of this is provided by the comments of Davies J in Chalk v Commissioner for Superannuation (1994) 50 FCR 150 at 154 where he said '……the discretion should be exercised by reference to the words of the statute and the context within which the discretion is conferred';
· while the applicant has the burden of placing before the tribunal the circumstances which it claims will justify the grant of an extension of time, that does not amount to a burden of proof and it is not appropriate that it should be so described: McDonald v Director-General of Social Security (1984) 1 FCR 354 per Woodward J at 357 and Jenkinson J at 368-9: Australian Broadcasting Tribunal V Bond Corp Holdings Ltd (1989) 86 ALR 424 at 432 per Burchett J;
· it is 'more important to consider the consequences of extending or refusing to extend time than debate the reasons why the act was not done in time': per Davies J in Chalk's case, at 156, with whom Black CJ and Cooper J agreed. Similar comments are to be found in Comcare v A'Hearn (1993) 119 ALR 85, particularly at 88;
· actions of the agent of a principal should not necessarily be regarded as being the actions of the principal: A'Hearn's case;
· a legislative provision providing for the exercise of a discretion to extend time is beneficial in nature and should be applied beneficially: Davies J in Chalk's case at 155."
14. I will take these principles into account when deciding whether the presently sought extension of time is appropriate in all the circumstances.
SUBMISSIONS
15. In his submissions for Koutsoukos, Mr McCormack drew attention to aspects of the Edlin declaration which he considered are more consistent with having been drafted by a patent attorney than someone not familiar with patent law and practice. He also drew attention to an assertion as to obviousness by Mr Edlin and, in essence, criticised the evidentiary weight of that assertion. He noted that from his declaration Mr Edlin appeared to have been provided with a copy of the specification in suit, and that on the basis of the decision Minnesota Mining and Manufacturing Co. v Tyco Electronics Pty Ltd (2002) 56 IPR 248 at 45 this "is tantamount to leading the witness".
16. He went on to state (quoting from his written submissions):
"It is not until the probative value of the evidence adduced in the Edlin declaration has been investigated, through analysis of the materials sought by of the Notice Requiring the Production of a Document, that the content of the Applicant's Evidence in Answer, as well as any appropriate amendments to the specification of the patent application, can be finalised.
The applicant has used its best endeavours to serve the Evidence in Answer on time though has been unable to do so in light of the complexity of the case which has, at the very least, been exacerbated by the dubious probative value of the evidence adduced in the Edlin declaration.
In deciding whether or not to allow the extension of time application, the delegate must ensure that the Applicant is not denied natural justice, a chief rule of which is as follows:
each party must have the opportunity of adequately stating their case (including sufficient time to prepare their case), and correcting or contradicting any relevant statement prejudicial to their case.
The Applicants having requested that the Commissioner issue the Notice Requiring the Production of a Document is indicative of the Applicant's diligence in progressing towards the opposition hearing."
17. In his submissions, Mr Angliss contended that the applicant had not justified the extension. He asserted:
· the stated reason for needing the extension referred to the outcome of the request to issue the Notice Requiring Production, whereas the notice had been issued 3 days prior to when the extension of time request was filed
· nothing the applicant could elicit by production is likely to provide the applicant with more than that which the opponent had already provided in the evidence in support, and the Notice is in the nature of a fishing expedition and more in the nature of discovery than of specified information
· there is nothing in the reasons for the extension application that the applicant has acted expeditiously to complete the evidence in answer, and the reasons were far from full and frank
· the applicant is silent as to the nature and significance of the evidence to be prepared and served in the period of extension requested, and thus the delegate cannot conclude that the extension is justified in all the circumstances, and likewise cannot conclude that a public interest lies in the unspecified interest.
18. Mr Angliss concluded that as it now clear that, as he put it, "no such materials will be forthcoming" from the Notice Requiring Production, a short Ferocem extension is all that is required to file the evidence in answer. He said that one inference that could be drawn was that the evidence in answer was now effectively complete because of the Koutsoukos' statement in its reasons for requiring the extension of time that the additional material was required to "complete" the evidence in answer. As an apparent fall-back position, Mr Angliss submitted that if any extension is granted for a period longer than a Ferocem extension I should direct that it be restricted to evidence that is based upon material produced in accordance with the Notice Requiring Production.
DECISION
19. As a preliminary observation, I will note that the outcome of the Notice Requiring Production action is completely outside the scope of this decision, and I will be alert to the need not to stray into expressing a view on the merits of that matter. As a corollary to this, I think am compelled to proceed on the basis that there is a significant potential for "relevant" evidence (as that term is understood in the related consideration of "further evidence" under regulation 5.10(4)) to be adduced as an outcome of the Notice Requiring Production action.
20. Another preliminary observation I will make (even though I do not think it comes into play greatly in this decision) is that the present invention is technically simple (a means for securing an insect screen to a frame, such as a window or door), and the evidence in support (the Edlin declaration) is relatively brief and straightforward.
The explanation of the delay
21. The cause of the delay is quite clear cut in this instance: the delay has been a deliberate act on the part of Koutsoukos so that the Notice Requiring Production action can be resolved and any fruits which that action bears can be utilized in its evidence in answer. I should note at this point that, contrary to the interpretation put forward by Mr Angliss, I do not place any significance upon the reference to issuing the Notice Requiring Production in the reasons given for the extension. When the reasons refer to the "outcome of our recent request", I read them as referring to the entirety of the Production procedure, that is, up to the providing of documents, if any, to Koutsoukos.
22. So far as I am aware, this cause of delay has never been put forward at a hearing as a basis for requiring an extension of time to file evidence in opposition proceedings under the Patents Act. The question is, does it constitute a justifiable cause of delay?
23. From one perspective it does not, at least not without some explanation of how, in the particular circumstances of the matter at hand, the filing of evidence in answer responding to the evidence in support is rendered impracticable. The alleged weaknesses Koutsoukos has pointed to in the Edlin declaration ought to be addressable by evidence in answer without the assistance of further information of the nature of that sought by the Notice Requiring Production.
24. From the perspective, however, of some of the factors pointed to in Ferocem as requiring consideration, namely, "the expeditious disposal of matters in the Patent Office, and questions of costs, of efficiency….." it seems that it may make sense to dispose of the Notice Requiring Production matter before carrying on with the normal evidentiary processes involved in opposition proceedings, which in the present case means the serving of evidence in answer.
25. At the hearing Mr McCormack held out the possibility that it may not be necessary to file any evidence in answer at all, depending on what the Notice Requiring Production turned up. That is clearly a possibility, but a possibility only. Moreover there are clearly risks to shutting down indefinitely the evidentiary processes involved in patent oppositions on the off chance that it will turn out to be more efficient to do so in the long run. The difficulty lies in not knowing how long the Notice Requiring Production action will take to run its course.
26. In all of this it must be remembered that the patent opposition procedure contains a corrective mechanism which could be availed of in the situation where evidence in answer is served but the Notice Requiring Production turns up information relevant to the opposition. In this case, it is open to Koutsoukos to seek leave to file further evidence under regulation 5.10(4).
27. Considering all of the above, in my view the competing considerations as to whether the present delay is justifiable are fairly evenly balanced.
The public interest
28. Public interest considerations were addressed by Burchett J in Ferocem (supra). The Kaiser Aluminium decision which Burchett J cited in Ferocem states that one should deal with a serious opposition on its merits rather than shut it out because of a failure in procedure. While that decision discusses the risk of shutting out the opponent, the same principles apply in respect to the risk of shutting out the applicant by denying a proper defence of the opposition. This approach is also supported by S.D.S. Digger Tools Pty Ltd v Pasdonnay Pty Ltd [1995] APO 57. That decision states that it is in the public interest for the applicant to be able to defend its case for what might be a worthwhile invention rather than have the defence shut out because of a failure in procedure.
29. It is also against the public interest to grant an invalid patent and to unnecessarily delay opposition proceedings. Opponents, and particularly their statements of grounds and particulars and evidence-in-support, are an important source for reducing the risk of granting invalid patents. In this light one could suggest that the applicant's evidence-in-answer has little effect on this public interest consideration. On the other hand it is equally against the public interest to deny the grant of a valid patent . This position means the applicant's evidence-in-answer is as important to the public interest as the opponent's evidence-in-support. I think this point carries more weight, at this stage of proceedings in the present case, than the prospect of delay of those proceedings.
30. Overall I consider the public interest in providing Koutsoukos with an opportunity to bring forward relevant evidence that would allow a more just determination of the opposition outweighs any delay in the opposition proceedings.
The interests of the parties
31. Koutsoukos' interests would be disadvantaged by not being able to serve its evidence in answer. While it cannot be strictly said that the applicant's need for the extension has largely arisen from circumstances beyond its control, a refusal of the extension would cause the applicant considerable detriment.
32. It is clearly in the opponent's interests to have the opposition determined as expeditiously as possible. I accept that Capral could be disadvantaged by a protraction of proceedings if I grant the extension now sought. Nevertheless, there is nothing before me to suggest that such protraction would have the same undue effect on Capral as the effect on Koutsokos if they were denied the opportunity to fully state their case.
33. In my view the balance of the parties' interests at this stage of proceedings weighs in favour of allowing the extension.
CONCLUSION
34. I have found that the considerations behind whether Koutsokos has justified its delay in providing evidence in the present circumstances and for the need for a further extension of time are evenly balanced. The private interests of Koutsoukos, together with the public interest, support the granting of an extension, while to a lesser extent the interests of Capral do not. I am also cognizant of the comments of Davies J in Chalk's case which are referred to in the extract from Sanyo v Commissioner of Patents which I have quoted above, which would appear to lean towards granting the extension, if only because the Notice Requiring Production circumstance has taken this matter very much into uncharted waters.
35. I am therefore satisfied that an extension of time is appropriate in all the circumstances.
36. Moreover, I am of the view that the circumstances are such as to warrant the full extension of time sought by the applicant and not, as Mr Angliss submitted should be the case if I was of a mind to grant an extension, a Ferocem extension of time to allow service of any evidence in answer which the applicant had at hand. My understanding of Mr McCormack's comments at the hearing is that Koutsoukos has very little, if any, evidence at hand, despite what Mr Angliss suggested could be inferred from the reasons given in the request for an extension of time. But in any case, I think it preferable in the present circumstances, because of public interest considerations and in fairness to the applicant, that the applicant not be restricted in that way. On the other hand, Koutsoukos requested that I issue a direction under regulation 5.10(1)(a) that the time for filing evidence in answer be linked to the final resolution of the Request Requiring Production. I am not prepared to do that either, as the situation with the Request Requiring Production is a fluid one which I think for the time being ought to be assessed at the time each extension is sought, remembering that, as I have said, we are in uncharted waters here.
37. Therefore I grant Koutsoukos an extension until 7 October 2003 in which to serve its evidence in answer.
COSTS
38. The power of the Commissioner to award costs is discretionary, so I must take into account all relevant considerations.
39. In matters before the Commissioner, costs usually follow the event. In the present case no additional information of note has been brought forward to justify the extension. I appreciate the difficulty of the situation Capral has found itself in of being faced with an extension of time being sought for a reason which has never been invoked before, and the understandable need felt by them to "test" that reason. However, I do not see in that any basis upon which to vary the usual award of costs. I therefore award costs against Capral Aluminium Limited.
Ed Knock
Delegate of the Commissioner of Patents
Patent attorneys for the patent applicant : Wray & Associates, Perth
Patent attorneys for the opponent : Cullen & Co, Brisbane
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