General Electric Company v NEG Micon A/S

OFFICIAL NOTICE
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 737762 in the name of GENERAL ELECTRIC COMPANY

Title: Variable Speed Wind Turbine Generator

Action: Opposition under Section 59 by NEG MICON A/S, and objection to an application under Regulation 5.10(2) for an extension of time in which to serve evidence in support

Decision: Issued .
Abstract

The opponent cited the withdrawal of expert witnesses and the need to locate and retain further declarants as a major reason for needing the extension of time.
The extension of time to serve evidence in support was granted. The opponent had provided a satisfactory explanation of the need for the extension sought. The public interest in having the opposition determined on its merits, together with the interests of the opponent, also favoured the granting of the extension of time.
No award of costs as the extension application did not itself adequately justify the extension.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No.737762 in the name of General Electric Company, opposition under section 59 by NEG Micon A/S, and objection to an application under regulation 5.10(2) for an extension of time in which to serve evidence in support

BACKGROUND

Patent application 737762 was filed on 7 August 1998 by Zond Energy Systems, Inc under the provisions of the Patent Cooperation Treaty. The application was advertised accepted on 30 August 2001 and is now proceeding in the name of General Electric Company (GEC).
Powercorp Pty Ltd (Powercorp) filed a notice of opposition to the grant of a patent on 29 November 2001. Further notices of opposition were filed on 30 November by NEG Micon A/S (NEG), Vestas Wind Systems A/S (Vestas) and Western Power Corporation (WPC). The Powercorp and WPC oppositions were subsequently withdrawn.
The following deals exclusively with the opposition by NEG.
On 2 May 2002 GEC requested the Commissioner to direct NEG to provide further and better particulars in relation to the prior art documents listed by the statement of grounds and particulars under the grounds of novelty and inventive step. On 19 June 2002 the Commissioner directed that the further and better particulars be incorporated into the statement of grounds and particulars by amendment under regulation 5.9. NEG's request to amend the statement of grounds and particulars as directed was allowed on 2 September 2002.
NEG applied for and was granted unopposed an extension of time until 28 August 2002 in which to serve their evidence in support. On 27 August NEG requested an extension of a further three months to 28 November 2002. GEC objected to the further extension and the matter came to hearing in Canberra on 15 October 2002. GEC were represented by Mr Leon Allen, patent attorney of Davies Collison Cave, and NEG were represented by Mr Doug Carter, patent attorney of FB Rice & Co. Both parties appeared by telephone.
REASONS FOR EXTENSIONS OF TIME
The reasons given by NEG in their first application for an extension of time from 28 May to 28 August 2002 are as follows:
The Opponent is a Danish company, and instructions are provided through Danish patent attorneys to the Australian attorneys.
Since November 2001, we have been attempting to locate an Australian expert who would be able to provide expert evidence in relation to this opposition. The name of the Chief Representative in Australia has been given to our Australian attorneys and a number of communications have taken place between the representative and the attorneys. These communications have resulted in a number of recommendations of people in Australia who may be able to act as an expert witness. Closer investigation, however, has indicated that some of the potential witnesses have declared themselves unavailable under direction from their respective employees. Another possible expert witness has declined to become involved because of commercial reasons and a potential conflict. Another potential expert has been identified but, to date, it has not been possible to obtain a positive indication as to whether or not that person will be able to assist the Opponent in providing evidence in this matter. Further time is therefore required to continue investigations to locate one or more expert witnesses to assist in the establishment of evidence for the opposition.
In the meantime, translations of various foreign language documents referred to in the Statement of Grounds and Particulars have been obtained and forwarded to our Australian attorneys to facilitate preparation of the required Evidence-In-Support. It will be understood from the Applicant's patent specification and from the number of prior art documents to which reference is made in the Statement of Grounds and Particulars that analysis of those references and the subject matter of the claimed invention and of each claim requires close and detailed review. Such review has been undertaken and draft evidence has been commenced, but additional time is required to complete the preparation of declaratory statements based on the analysis and review.
The reasons for the present extension application are stated as being:
The Opponent is a Danish company, and instructions are provided through Danish patent attorneys to the Australian attorneys.
Since 24 May 2002, we have continued in our endeavours to locate suitable expert witnesses to assist the opponent in the conduct of this opposition. The opponent's representative in Australia has not been successful in locating a suitable witness. Although, we are advised, he has spoken to a number of additional potential witnesses since the end of May 2002, the people concerned have either been unsuitable or unable to act.
Approaches have been made to various academic institutions and our Australian attorneys have spoken to several potential witnesses, and have conducted interviews with several people to date.
Earlier this month, we located an engineer who may be a suitable witness, and we have forwarded information to assess his suitability. We have also received information concerning another potential expert, and we are trying to establish contact with this person.
Given the nature of the art and the difficulty in locating a suitable person with expertise, additional time is required to continue our investigations in this regard.
In the meantime, other facets of the Evidence-in-Support have been completed and it is expected they will be served concurrently herewith.
Partial evidence in support was in fact filed on 28 August 2002. Additional parts of the evidence in support were filed on 13 September and 30 September 2002. Both dates fall within the period of extension presently sought by NEG.
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."
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 now well known 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.
These principles do not demand an imperative compliance with particular requirements, but rather as said 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.'"
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.
I will take these principles into account when deciding whether the presently sought extension of time is appropriate in all the circumstances.
DECISION
The explanation of the delay
The present application for extension is the second filed by NEG and represents a total extension sought of six months. In considering the explanation for the delay, it is legitimate to have regard to the reasons given to justify the total extension (Goninan at page 223):
"Nor do I think that there is any substance in the contention that the finding that the first application was not properly based was "wholly irrelevant" to the determination of the second application. One of the factors to be taken into account in determining whether a further extension should be granted was the extent of any delay in filing evidence and whether Goninan had offered a satisfactory explanation for the delay, or any part of it. As Ferocem shows, this consideration cannot be regarded as paramount in the sense that it forecloses proper consideration of other relevant factors. But it was clearly a relevant factor in the delegate's deliberations and he was entitled to take into account that at no stage had a satisfactory explanation for the delay been forthcoming."
Essentially NEG rely on the difficulties they have encountered in locating and retaining suitably qualified declarants in Australia to provide expert evidence. As noted earlier, although a number of potential declarants have been identified they have either been unsuitable or unwilling to act on NEG's behalf.
The circumstances leading to the need for the extensions requested by NEG are further explained by Mr Carter in a statutory declaration dated 2 October 2002 as follows:
"2. By letter dated 26 October 2001 (received 6 November 2001) we were instructed to "commence investigations in the wind turbine field for a suitable expert for this opposition …".
3. We subsequently received, on 13 November 2001, a further letter from our instructing principles giving us the names of two Australian consultant companies with qualified specialists. We were also advised of a further possible expert with a state utility company in Perth. We were asked to contact the Australian representative of the opponent company, Mr D. Williams, for additional information in relation to an expert.
4. On 27 November 2001, a member of our engineering team contacted Mr Williams by telephone and explained the role of an expert witness and asked Mr Williams if he was able to assist in locating a suitable person. Mr Williams agreed to do this, and we provided him with the names that had been conveyed to us. Mr Williams indicated that while he would attempt to contact the individuals, he was concerned that they would have a potential conflict due to previous contact with the applicant. Subsequently, on 28 November 2001, we received an email from Mr Williams reading, inter alia:
"Unfortunately, my first x2 choices of expert witness have declared themselves unavailable under direction from their respective employees …
I will now try my next two choices … and advise of the outcome."
We again spoke with Mr Williams by telephone and were advised that he was hopeful of being able to locate a suitable expert. Consequently, we left this search in his hands.
6. On 13 March 2002 we again spoke by telephone to Mr Williams but he was unable to advise any progress towards locating an expert. He indicated that a colleague in Darwin may be a suitable witness and he would make further enquiries.
7. We attempted to contact Mr Williams on a number of occasions by telephone … We subsequently spoke with Mr Williams on 28 May 2002 and he advised that he was unable to locate a person having suitable qualifications and willing to act as an expert. He advised that he had spoken to a considerable number of people but they had all declined to be a witness in this matter. However, Mr Williams advised that he would continue to try to locate a suitable expert and mentioned that there were several engineers working in the power generation field that he could contact. Notwithstanding that he had so far been unsuccessful, Mr Williams was confident he would be able to locate a person suitably equipped with the common general knowledge in this field as of the priority date. Mr Williams promised to advise me of the outcome of his further efforts within a couple of weeks.
9. In view of the lack of success of Mr Williams in locating a suitable expert, we commenced investigations of other sources for obtaining a suitable expert. In June, 2002, web sites of several universities were checked for possible leads … At that time, we were unsuccessful in locating a person of interest, and I then wrote to contacts at … As a result of these enquiries, I received Curriculum Vitae of a number of possible experts, several of whom I contacted by telephone. One of the potential experts to whom I spoke appeared to be suitably qualified in this field and I forwarded information to this person on 14 August 2002. Unfortunately, that person has been engaged in several other matters and has been unable to provide the information I requested until recently. In the meantime, I contacted Professor Peter Wallace at Monash University, but due to his absence overseas, and his subsequent unavailability in Australia, I have been unable to talk with him about the details of this matter.
10. On 7 August 2002 I again spoke with Mr Williams concerning his search for an expert to assist us. Mr Williams advised that he had still not been successful in locating an appropriate person with the necessary expertise. He again confirmed that the high level experts to whom he had spoken were unwilling to assist due to commercial obligations and the lower level experts, such as engineers with lower level degrees, did not appear to have the necessary experience. Mr Williams proposed several other avenues he would investigate but he was not confident of any success."
Mr Allen questioned why this level of disclosure was not offered earlier in the proceedings which I agree is a factor to be taken into account in any award of costs. Most notably, however, he did not challenge Mr Carter's explanation of events.
In clause 9 Mr Carter refers to difficulties in pursuing evidence from Prof Wallance and another potential expert due to their competing commitments. Activities of this kind have been consistently rejected by the Commissioner as constituting extenuating circumstances in the context of opposition proceedings such as may justify an extension of time (see eg. Imarx Pharmaceutical Corp v Mallinkrodt Medical Incorporated [2001] APO 10, ABB Engineering Construction Pty Limited v A Goninan &Co Ltd [1997] APO 65, and Minproc Technology Pty Ltd v Commonwealth Scientific and Industrial Research Organisation 35 IPR 48). However, NEG do not rely on these routine activities as justification for the extension of time they seek. Instead, what NEG point to are the series of delays they have faced from the outset as a result of their inability to secure a witness who was both competent and willing to provide expert evidence.
In Dominion Mining Limited v M.I.M. Holdings Limited and Highlands Gold Properties Pty Ltd [1997] APO 27 the delegate of the Commissioner concluded that difficulties arising from the inaccessibility of declarants was a relevant factor which favoured the grant of an extension of time. As stated at page 3:
"I accept the withdrawal of declarants … would cause significant disruption to the applicant's preparation of evidence-in-answer. This factor could entitle the applicant to an extension of time."
This is directly analogous to the present situation. On the material before me NEG have endeavoured to move expeditiously to complete their evidence in support, but that such attempts have been significantly inhibited by the effective withdrawal of a succession of potential declarants identified to date thus necessitating duplicated effort in locating and briefing new appropriately qualified declarants. Clearly, these unfortunate circumstances have not resulted from NEG's own actions. It is also evident that despite the recurring problems faced by NEG they have continued to actively search for suitable experts in what I accept is a relatively specialised field of technology.
On balance I believe NEG have shown that they have experienced difficulties of a kind which justify the need for the extension of time presently sought.
The public interest
As made clear in Ferocem, the public interests are not all ranged on the same side. While these interests are certainly in favour of seeing matters before the Commissioner pursued diligently, they must be balanced against the need to ensure that a serious opposition is dealt with on its merits.
I have no doubt that a serious opposition is in train. The statement of grounds and particulars raises issues of novelty and inventive step and some progress has been made in the preparation of evidence in support of these substantive grounds of opposition. It is also the case that in spite of the difficulties they have encountered in gathering expert evidence, NEG are continuing in their attempts to acquire the services of suitable witnesses so as to complete the evidence in support which, as I have already indicated, weighs towards allowing a further extension of time.
The public interest in determining a serious opposition on its merits requires me to form a view as to the nature and significance of the evidence that it is sought to adduce. I am guided here by what Sackville J said in Goninon said at pages 225-6:
"I do not mean to suggest that the evidence has to be scrutinised in the same way as would occur at a hearing on the merits. But unless the delegate forms a view as to the issues addressed by the proposed evidence, and whether that evidence is likely to be important in the opposition proceedings, it is difficult to see how proper consideration can be given to the public interest in having such proceedings being determined on their merits."

The evidence immediately to hand clearly goes to the question of novelty and, although there is no direct material on the point, from a brief perusal of other material before me it is apparent that a significant part of NEG's case relates to grounds in which the question of what information was common general knowledge in Australia is likely to have an important bearing. It is well settled in law that the state of the common general knowledge must be determined on the basis of evidence from suitably qualified experts of what was known by the person skilled in the relevant art. I am therefore satisfied that the evidence which is already available together with the expert evidence sought by NEG is potentially relevant to a determination of the opposition on its merits.
Mr Allen suggested that this aspect of the public interest would be satisfied by granting NEG a limited extension (per Ferocem at page 248) to validate the service of the partial evidence filed by them on 13 and 30 September 2002. I am not convinced of this. The grant of a short extension of time would permit NEG to put the documents they have particularised into evidence. However, NEG may as a consequence be precluded from effectively arguing their case on the important ground of inventive step since in the absence of expert evidence the Commissioner is unlikely to consider documentary evidence alone as sufficient proof of what is common general knowledge. Clearly the public interest in the validity of granted patents favours a proper determination of the opposition (see eg. Novo Nordisk A/S vEli Lilly and Company [2000] APO 14).
In reaching this conclusion I have not overlooked the fact that the public interest in having a serious opposition determined on its merits could be protected without NEG's full involvement if the opposition by Vestas continues and is successful, but of course this is not certain. In my opinion this uncertainty may be prejudicial to the public interest.
I am also mindful that granting this extension will cause a further delay of three months. However, I believe the effect of this delay on the expeditious disposal of matters before the Commissioner represents a comparatively minor inconvenience in the present case. Relevantly, as the opposition by NEG is running concurrently with the Vestas opposition, neither opposition can proceed to hearing until the evidentiary stages of the other have been completed. In fact as pointed out in Resolute Resources Limited v Billiton SA Limited [1999] APO 82 the oppositions will, as a matter of practice, be heard jointly. Thus I do not consider that the hearing of the multiple oppositions will be unduly protracted if I were to grant the extension presently sought by NEG.
Overall I consider the public interest in providing NEG with an opportunity to obtain relevant evidence that would allow a more just determination of the opposition outweighs any delay in the opposition proceedings.
The interests of the parties
Clearly NEG's interests would be best served by granting an extension of time to allow their case to be presented in full. On the other hand, I accept that GEC could be disadvantaged by a further 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 GEC as the effect on NEG if they were denied the opportunity to fully state their case.
In my view the balance of the parties' interests at this stage of proceedings weighs in favour of allowing the extension.
CONCLUSION
I have found that on balance NEG have provided a satisfactory explanation of the need for a further extension of time. The private interests of NEG, together with the public interest, also support the granting of an extension. I am therefore satisfied that an extension of time is appropriate in all the circumstances, and I grant NEG an extension until 28 November 2002 in which to serve evidence in support.
Mr Carter indicated he was hopeful that NEG would finalise their evidence within this time but was unable to give an undertaking to that effect. However, while I accept NEG are acting in good faith, I would view with concern any additional extension of time sought be NEG for the reason only that they still had not identified a suitable expert witness.
COSTS
The power of the Commissioner to award costs is discretionary, so I must take into account all relevant considerations.
In matters before the Commissioner, costs usually follow the event. In the present case my allowance of the extension sought has in part been based on the submissions and declaratory evidence provided by Mr Carter which are far more detailed than the explanation given in the extension application. I therefore consider it appropriate that GEC and NEG bear their own costs.
Accordingly, I make no award of costs.
O L Haggar
Delegate of the Commissioner of Patents
Patent attorneys for the applicant : Davies Collison Cave, Melbourne
Patent attorneys for the opponent : FB Rice & Co, Carlton, Vic

[2002] APO 42

15 November 2002