Gainsborough Hardware Industries Limited v Walter Joseph Nugent
[1997] APO 26
•6 June 1997
official notice
decision of a delegate of the commissioner of patents
Application : No. 662657 in the name of GAINSBOROUGH HARDWARE INDUSTRIES LIMITED
Title: Dual function lock mechanism
Action: Request for an extension under regulation 5.10 of the time to serve a notice of intention to serve evidence in reply to an opposition to the grant of patent under section 59 of the Patents Act 1990 by WALTER JOSEPH NUGENT
Decision: Issued
Abstract
The extension of time was allowed on the terms that only the evidence of one declarant could be served in reply.
a) The evidence that was allowed to be served was admitted on the basis that the public interest and significance of the evidence is high. The sole issue in the opposition is the entitlement of the patent applicant to the grant of a patent. This is a matter that relies heavily on the evidence of a small number of people, and the correct determination of this issue places weight on the side of admitting the evidence.
b) The evidence that was not allowed to be admitted was evidence by the opponent himself. This evidence should not be admitted because: (i) there was no evidence that this evidence was not available earlier; (ii) the inaction of the opponent; and (iii) the low significance of the evidence.
The award of costs against the opponent included the cost of preparing for the substantive opposition.
patents act 1990
decision of a delegate of the commissioner of patents
Re:Patent Application No. 662657 by GAINSBOROUGH HARDWARE INDUSTRIES LIMITED, and a request for an extension under regulation 5.10 of the time to serve a notice of intention to serve evidence in reply to an opposition under section 59 of the Patents Act 1990 by WALTER JOSEPH NUGENT
background
Patent application number 662657 in the name of Gainsborough Hardware Industries Limited (hereafter referred to as Gainsborough) was advertised accepted on 7 September 1995. A notice of opposition was filed by Walter Joseph Nugent (hereafter referred to as Mr Nugent) on 7 December 1995. The statement of grounds and particulars was served on 12 March 1996 (and an extension of time allowed following a hearing before a delegate of the Commissioner, decision dated 6 September 1996). Evidence in support was completed on 12 June 1996. Evidence in answer was completed on 23 December 1996. Notice of intention to serve evidence in reply and a request to extend the time for serving the notice were filed at the Patent Office on 20 March 1997. Evidence in reply in the form of declarations by Mr Baird and Mr Nugent was served on 24 March 1997. Gainsborough opposed the extension of time, and the matter was heard by telephone in Canberra on 9 May 1997. Gainsborough was represented by Mr F.Old, patent attorney of Spruson & Ferguson, Sydney. Mr Nugent was represented by Mr M.Roberts of Arthur Robinson & Hedderwicks.
application for extension of time
The application for extension of time was accompanied by a statutory declaration by Richard Julian Spanier Aarons, a solicitor for Mr Nugent, which stated in part:
"4.The Opponent had formed the view that it was unnecessary to file evidence in reply but intended to seek a direction to be permitted to cross-examine the Applicant's witnesses to challenge the credibility of their evidence.
5.On 27 February 1997, I received information from a direct witness to the relevant events that factual statements contained in the evidence of the Applicant were false and further that other material evidence known to him was available.
6.The new information supplied by the witness is of critical importance to the outcome of the Opposition. Without this information, the Opposition could not be justly determined.
7.This information only came to my knowledge after the time for serving evidence in reply, or a notice of intention to serve evidence in reply, had expired. Consequently, an extension of time in which to serve a notice of intention to serve evidence in reply is being sought in order to enter the crucial information supplied by the witness."
grounds of opposition
The statement of grounds and particulars identifies only one ground of opposition:
"The nominated person GAINSBOROUGH HARDWARE INDUSTRIES LIMITED is not entitled to the grant of a patent for the invention, so far as claimed in any of claims 1 to 26."
decision
The relevant law
The present request for an extension of time is made pursuant to regulation 5.10(2), which states:
(2) The Commissioner may:
(a) on the application of a party in the approved form; and
(b) on such reasonable terms (if any) as the Commissioner specifies;
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 paragraph 5.4(1)(a).
The time for serving a notice of intention to serve evidence in reply is prescribed in regulation 5.8(4)(a) as "within 1 month of being served with a copy of the evidence under paragraph (2)(a) or (3)(a)", i.e. within 1 month of the service of evidence in answer. Consequently, it is within the power of the Commissioner to extend the time for serving the notice of intention.
In considering a request under regulation 5.10, I must bear in mind the requirements imposed by subregulation (5):
(5) The Commissioner must not give a direction under subregulation (1) or grant an application under subregulation (2) or (4) unless the Commissioner:
(a)if he or she proposes to grant an application by a party - is reasonably satisfied that the other party has been notified of the application; and ...
(c)in either case:
(i)gives the parties a reasonable opportunity to make representations concerning the application or proposed action; and
(ii)is reasonably satisfied that a direction, an extension of time or the serving of further evidence is appropriate in all the circumstances.
In the present case, the parties have all been informed of the application, and have had a reasonable opportunity to make representations. The issue to be resolved is whether an extension of time is appropriate in the circumstances. In answering this question, I need to take into account all relevant factors.
In determining the factors to consider I am guided by the comments of Burchett J in Ferocem Pty Ltd v Commissioner of Patents (1994) 28 IPR 243 at 247-8:
"The idea that such a broad discretion can validly be reduced by a decision maker to an insistence upon 'imperative' compliance with particular requirements has repeatedly been rejected by the courts. ... [A]n explanation of delay, although normally to be expected, ... cannot be said to be so imperative, in relation to reg 5.10, that it constitutes 'the present issue' upon an application under that regulation. ... The determination of an application for an extension of time under reg. 5. 10(2) involves 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 Patent Office, and questions of cost, of efficiency, and of insistence upon proper professional standards being maintained by those who deal with the office. But they also include, as Kitto J. pointed out in Kaiser Aluminium & Chemical Corporation v The Reynolds Metal Company (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'. This proposition was cited by Bowen CJ in Vangedal-Nielsen v Smith (Commissioner of Patents) (1980) 33 ALR 144 at 150, where he also set out some of the considerations involved upon the application for an extension of time."
Mr Old also referred me to the following cases on extension of time:
Owen-Corning Fibreglas Corporation's Patent [1972] RPC 684, where Graham J stated at 690 that "there comes a time where one must draw a line or exercise one's powers with the hatchet and say: 'This has gone on long enough'."
The Permutit Co. Ltd's Application [1964] RPC 22, where Lloyd-Jacob J disapproved of unnecessary delay
Gerber Scientific Products Inc v L Vogel and Sons Pty Ltd (1990) 19 IPR 92, which involved a delay in preparing evidence in reply
Kozo Miyake v Caterpillar Inc., Patent Office decision, patent application number 651768, 14 December 1995, unreported, which involved a request to extend the time for serving a notice of intention to serve evidence in reply
I have not referred to any of these decisions in what follows because I believe that the present matter is determined on the particular facts of the case.
Relevant factors
The factors that I consider relevant in the present case are as follows.
Reasons for the extension
It is clear from the Aarons declaration that a conscious decision was made not to serve any evidence in reply, and instead to test the evidence in answer by means of direct cross-examination of the declarants. There was no error or omission involved in the failure to serve a notice of intention, other than an error of judgement as to the existence of better evidence.
The Aarons declaration goes on to state that he became aware of a new declarant on 27 February 1997. This does not explain why the evidence filed in reply includes a further declaration by the opponent (Mr Nugent). It could not be argued that Mr Aarons only became aware of the existence of Mr Nugent at this time. I asked Mr Roberts why a declaration from Mr Nugent also formed part of the evidence in reply. I was informed that it was his opinion that if an extension was granted, then any evidence in reply could be served.
I accept that Mr Aarons was not previously aware of the existence of Mr Baird. However, it is clear that Mr Nugent was aware of Mr Baird, as his declaration in reply refers to day to day dealings with him [para 27]. It is unexplained why Mr Nugent did not inform his solicitor of the existence of Mr Baird at an earlier time.
Delay in seeking extension
Mr Aarons became aware of the new declarant on 27 February 1997, but did not request an extension of time until 20 March 1997. I asked why it seemed to have taken a long time to make the request for an extension. Mr Roberts said that although it may have been possible to act quicker, the time taken was not excessive, and the preparation of evidence requires time.
The issue of delay needs to be considered further in conjunction with the next issue.
Actions of Mr Nugent
It was suggested that Mr Nugent (or his representative) had acted in a way that indicated that there would be no evidence in reply, and consequently it is not possible to now give the extension. I was referred to the decision of Leonardis v StAlban (1992) 24 IPR 351. In this decision the Assistant Commissioner decided that an applicant who requested, after the completion of evidence in support, that the opposition be heard had relinquished their opportunity to file evidence in answer. It appears to me that the Leonardis decision relied on the fact that the party had done a positive act which the other party, and the Patent Office, was entitled to regard as an intentional act. The present case is different, in that Mr Nugent did nothing. The failure of Mr Nugent to do anything is not as significant as if he had actually said that he was not serving evidence in reply, but the longer that there is inaction the more reasonable it is to rely on the inference that Mr Nugent was not serving evidence in reply.
In this context, it must be noted that on 20 February 1997 the Opposition Clerk at the Patent Office wrote to the solicitors for Mr Nugent, stating in part:
"The Delegate of the Commissioner of Patents notes that the applicant's evidence-in-answer was served on 23 December 1996.
Therefore, the opponent should have served a notice of intention to serve evidence-in-reply, or the evidence itself, by 23 January 1997.
It appears the opponent has not done this.
The applicant has requested the Commissioner to set the opposition down for hearing. The matter will be set down as soon as practicable."
In spite of this letter, Mr Aarons did not act promptly when he became aware of the existence of Mr Baird. I consider that the inaction of Mr Nugent and Mr Aarons in this situation leads to the reasonable inference that Mr Nugent intended to relinquish the right to serve evidence in reply.
Relevance of the new evidence
The new evidence appears to relate to the particulars for the sole ground of opposition, which is that the invention was obtained from Mr Nugent. From a cursory reading of the new evidence it is apparent that it relates, at least in part, to the question of the relationship between Mr Nugent and Gainsborough during the development of the present invention. It follows that this evidence cannot be dismissed as irrelevant to the present opposition. Additionally, the evidence refers to statements in the evidence in answer, which raises a presumption that it is in reply to that evidence. Consequently, the new evidence is prima facie evidence in reply.
I asked Mr Roberts whether the new evidence was properly in reply to the evidence in answer, or whether it constituted new evidence in chief. I was told that in his opinion it is reply evidence. It may be that on deeper analysis some or all of the evidence is found to be not properly evidence in reply. I do not believe that it is necessary for me to finally decide this question, and that it is sufficient for present purposes that prima facie the evidence is reply evidence.
Significance of the new evidence
Mr Aarons declared that the evidence of Mr Baird is of critical importance to the outcome of the opposition. I conclude from this that the evidence of Mr Baird is of high significance.
The evidence of Mr Nugent was originally viewed as unnecessary. There is no suggestion that this view was in error. I conclude that the evidence of Mr Nugent is of low significance.
Interests of Gainsborough
Mr Old stated that Gainsborough has attempted to have the matter set down for hearing quickly, and to this end had provided the Patent Office with a list of dates when he would not be available for a hearing. This list started with dates well before the time that Mr Nugent had made his request to extend time. Mr Old also stated that effort had already been expended in preparing for that hearing, effort that would now be wasted (as it would be necessary to repeat the process of familiarisation with the file). I think that this is an issue that goes to costs, rather than the allowability of the extension.
Clearly Gainsborough has been taking positive steps to have the opposition determined, and any delay in the evidentiary process works counter to their interest.
Interests of Mr Nugent
Mr Roberts stated that the opposition could not be justly determined without this information being available. This seems at odds with the original decision of Mr Aarons to rely solely on cross-examination of the witnesses for Gainsborough. However, I accept that this evidence could be important to Mr Nugent's case.
Clearly the interests of Mr Nugent lie in allowing an extension.
Public interest
I note that the evidence in reply was served soon after the request for an extension of time, and that no further time would be required for service. Consequently there would be no further delay in processing the present opposition.
If I do not grant the present extension Mr Nugent will not be entirely shut out from rebutting the evidence in answer, as he still has available the right to ask for examination of the declarants at the hearing, as originally intended. The public interest in dealing with the opposition on its merits would not be completely thwarted by a refusal to grant an extension.
Mr Old also indicated that the public interest is also protected by the availability of further action by way of revocation or re-examination. Re-examination does not include the issue of obtaining (see section 98), so this is not relevant. The availability of revocation affords an avenue for challenging any grant of a patent, but at the cost of reinstituting proceedings in a more formal environment. It is also in the public interest if the opposition process already in train is allowed to make a decision based on all available evidence, and possibly avoid the need for curial proceedings.
I am conscious of the fact that the present opposition relates solely to the issue of obtaining. Where obtaining is proved, the grant of the patent is refused and an equivalent patent can be granted to the opponent (under section 33). The result of an obtaining action is not simply to prevent the grant of a patent, but to cause a patent to be granted in the correct name. Clearly the public interest is different to the situation where the patent should otherwise not be granted (e.g. on the basis of lack of novelty). However, there remains a public interest in ensuring that patents are only granted to those who are entitled.
I am satisfied that there is a public interest in the Commissioner correctly deciding an opposition based solely on obtaining. Since obtaining relies heavily on the evidence of a small number of people, the public interest in determining the present opposition on its merits places greater weight on the side of admitting this evidence than if the issue were other than obtaining.
I believe that the public interest in this case is strongly in favour of allowing the evidence of Mr Baird to be included in the opposition so that the ultimate decision of the Commissioner can take into account all relevant evidence that is readily at hand. The public interest in the evidence of Mr Nugent is not as strong, as Mr Nugent and Mr Aarons considered this evidence was of low significance for the purposes of the opposition.
Conclusion
The inaction of Mr Nugent and Mr Aarons militate strongly against an exercise of discretion in Mr Nugent's favour. However, I must take into account all other relevant factors.
On the one hand, the lack of reasons, inaction by Mr Nugent and Mr Aarons and interests of Gainsborough argue against the extension. On the other hand, the relevance and significance of the evidence, interests of Mr Nugent and the public interest argue for the extension.
The public interest strongly favours receiving the evidence of Mr Baird. The magnitude of the inaction is not so great in the case of the evidence of Mr Baird, so I am satisfied that the evidence of Mr Baird should be available in the opposition, and the time for serving the notice of intention should be extended for this purpose.
The evidence of Mr Nugent is more difficult. There has been no explanation of the delay in preparation of this evidence, and the delay is much greater than in the case of Mr Baird. It appears from what Mr Roberts stated at the hearing that it is simply convenient for Mr Nugent to put in further evidence if the time is extended. There was no suggestion that Mr Nugent's memory of these facts was only prompted by the rediscovery of Mr Baird. The evidence before me suggests that Mr Nugent's new evidence was known to Mr Nugent and Mr Aarons during the period for serving a notice of intention, and a conscious decision was taken at that time not to present that evidence. In this situation, the actions of Mr Nugent and Mr Aarons and the low significance of the evidence outweigh the public interest, and I am not satisfied that it would be appropriate for this evidence to be included in the opposition. Consequently, I am not satisfied that the time for serving the notice of intention should be extended so as to permit the service of this evidence.
The power to extend time under regulation 5.10(2) includes the power to extend time on such reasonable terms as the Commissioner specifies. In the present case I believe that the time for serving the notice of intention should be extended ONLY to permit the serving of the evidence in reply of Mr Baird.
Conclusion
I grant the application to extend the time for serving a notice of intention to serve evidence in reply to 20 March 1997. The extension is granted on the following terms: the evidence that can be served in reply is restricted to the evidence of Mr Baird.
Costs
The power of the Commissioner to award costs is based on section 210 and regulation 22.8. The power to award costs is discretionary, so I must take into account all relevant considerations (see American National Can Co. v W.R. Grace & Co.-Conn (1994) AIPC 91-063; 29 IPR 292).
In the present case I found that the request for extension of time to serve a notice of intention to serve evidence in reply was successful, in part. However, I also found that Mr Nugent had not justified the extension, and that his inaction had constituted in itself a basis for disallowing the request. In this situation, I consider that it is appropriate to award costs against Mr Nugent.
Mr Old stated that any award of costs should include the cost of preparation for the substantive opposition because he had already begun preparing for the hearing, and that effort had now been wasted as a result of the present extension (as it would be necessary to repeat the process of familiarisation with the file). In deciding whether to include this item in the award of costs I must decide whether the activity covered by that item was actually carried out, and that the activity was reasonably required.
I note that Mr Old contacted the Patent Office by letter dated 10 February 1997 requesting that the matter be set down for hearing, and specifying four periods between 17 February and 8 April when he was available for the hearing. This is consistent with Mr Old's assertion that he has already put time into preparation for the substantive opposition hearing. While the details of the Mr Old's preparation were not provided, I am satisfied that it is probable that effort had gone into preparation. Turning now to whether such activity was reasonably required, I have to decide whether Mr Old was being unreasonable in preparing for the hearing before a date for the hearing had been agreed. How much time is normally required to prepare for a hearing of this type? I have no direct evidence on this point. However, given that Mr Old was seeking to have the matter heard as early as seven days after writing to the Patent Office on 10 February, and the time that elapsed before the extension was requested, it strikes me as reasonable for him to begin familiarising himself with the file in preparation for the hearing. I think it is only proper that the costs should include an item for preparing for the substantive opposition.
I award costs in accordance with Schedule 8 against Mr Nugent. These costs shall include the cost of preparation of case for hearing of the substantive opposition. This does not prevent this item being available as part of the costs in the substantive opposition.
Dr S.D.Barker
Delegate of the Commissioner of Patents
Patent attorneys for the applicant : Spruson & Ferguson, Sydney
Solicitors for the opponent : Arthur Robinson & Hedderwicks
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