Grantek, Inc v Marcal Paper Mills, Inc

[1999] APO 72

OFFICIAL NOTICE

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Application  :          No. 685158 in the name of MARCAL PAPER MILLS, INC

Title:          Process and Apparatus for Manufacturing Absorbent Granular Material

Action:          Application for an extension of time by GRANTEK, INC in which to file evidence in reply, and objection thereto by MARCAL PAPER MILLS, INC

Decision:          Issued            .

Abstract

Extension to serve evidence in reply allowed, despite procedural failure by the opponent.

Costs awarded against Grantek, Inc.

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent Application No. 685158 by Marcal Paper Mills, Inc; an application for an extension of time to serve evidence-in reply by Grantek Inc; and objection thereto by Marcal Paper Mills, Inc

BACKGROUND

Patent Application number 685158 was filed on 26 August 1994 by Marcal Paper Mills Inc (hereinafter referred to as Marcal). The application was advertised accepted on 7 May 1998. A notice of opposition to the grant of a patent was filed by Grantek Inc (hereinafter referred to as Grantek) on 15 April 1998, and a statement of grounds and particulars was served on 14 July 1998.

The evidence in support of the opposition was due to be served on 14 October 1998.  Grantek was allowed an extension of time to file evidence in support following a decision by a delegate of the Commissioner (Marcal Paper Mills Inc v Grantek Inc, [1988] APO 66 (25 November 1998)). Grantek subsequently served its evidence in support on 20 January 1999.

Marcal served evidence in answer on 20 May 1999 following a one month extension in which to serve the evidence.

On 20 August 1999, Grantek filed an application for an extension of time of one month to 20 September 1999 in which to file the evidence in reply.  Marcal objected to the grant of an extension of time on 7 September 1999.

The matter was set down for a hearing in Canberra on 21 September 1999.  Both parties relied on written submissions rather than attend the hearing.

Grantek filed their evidence in reply on 20 September 1999.

THE APPLICATION FOR EXTENSION OF TIME

The opponent set out the following circumstances in its application for an extension of time in which to serve evidence in reply:

“The Opponent has experienced difficulty in engaging an expert Australian witness to support the proposed Evidence-in-Reply by Professor David Kraske.  The proposed Australian witness has been temporarily unavailable.  Further time is required to co-ordinate and to finalise the Opponent’s evidence and to serve such evidence on the Applicant.”

SUBMISSIONS

The written submissions by Grantek expanded on the reasons set out in their application for an extension of time.  The opponent’s evidence in support comprised a declaration by Professor David Kraske, a resident of the USA.  The applicant’s evidence in answer comprised a declaration by Dr Geoffrey Duffy, a resident of New Zealand, who asserted that at least some of the matters referred to by Professor Kraske were not common general knowledge in Australia.  Therefore the opponent sought to engage an Australian expert to reply to Dr Duffy’s assertions.  However the opponent experienced difficulties in locating an appropriate and willing person.  The applicant had experienced the same difficulties in relation to its evidence in answer, as set out in reasons the applicant had given in an application for extension of time to file evidence in answer.  The remainder of the opponent’s submissions refers to the difficulty in obtaining an Australian expert, ultimately Mr David Thurley was engaged, and subsequent delays due to Mr Thurley having a minor operation.

Marcal set out their objection to the extension in the following terms:

“Regulation 5.8(4) requires the Opponent to serve a copy of their Evidence-in-Reply within one month of being served by the Applicant with a copy of the Evidence-in-Support (sic).

If the Opponent serves on the patent Applicant a copy of a Notice of Intention to File Evidence-in-Reply, the Opponent then has a three-month period within which to serve on the patent Applicant a copy of the Evidence-in-Reply.

As the patent Applicant has not been served with a copy of the Notice of Intention to File Evidence-in-Reply (Regulation 5.8(4)(b)) the Opponent’s evidence was due on 20 June 1999.

The application for an extension of time dated 20 August 1999 is in respect of an extension from 20 August 1999 to 20 September 1999.  There has been no request for an extension of time for the period 20 June 1999 to 20 August 1999.

Assuming the application is under Regulation 5.10(2) then the Opponent has failed to file the application at an early stage of the prescribed period sought to be extended.  Further in this regard the opponent needs to show that special circumstances existed which prevented the application being made before that time.”

DECISION

In light of the applicant’s submissions, I advised the parties by letter dated 24 September 1999 that I could not deal with the request for an extension of time from 20 August 1999 to 20 September 1999 unless the opponent filed a notice of intention to serve evidence in reply, together with a request for an extension of time to serve the notice.  The relevant parts of regulation 5.10 are set out below.

The opponent subsequently served and filed the notice and accompanying request for extension of time.  The applicant initially objected to this extension and the matter was set for hearing.  However the applicant withdrew its objection before the hearing date and the extension was allowed.  Therefore I must now consider the request for an extension from 20 August 1999 to 20 September 1999.

The law on extensions of time under regulation 5.10

The requirements for serving evidence in reply are set out in Patents regulation 5.8(4):

1. If an opponent intends to rely on evidence in reply to the evidence referred to in paragraph (2) (a) or (3) (a), the opponent must:

   a).    within 1 month of being served with a copy of the evidence under paragraph (2) (a) or (3) (a), serve on the applicant:

   i)a copy of the evidence in reply; or

   ii)if the opponent does not serve on the applicant a copy of the evidence in reply — a copy of a notice of intention to serve evidence in reply; and

   b).    if the opponent serves on the applicant a copy of a notice of intention to serve evidence in reply — serve on the applicant a copy of that evidence within 3 months of being served with a copy of the evidence under paragraph (2) (a) or (3) (a); and

   c).    file the evidence in reply and any notice of intention as soon as practicable after the copy of the evidence in reply or notice has been served on the applicant.

Regulation 5.10(2) allows for the time in regulation 5.8(4) to be extended:

(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).

Regulation 5.10(5) provides:

(5)       The Commissioner must not … grant an application under subregulation (2) … 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

(b)       if he or she proposes to act on his or her own motion — ensures that the parties are notified of the proposed action; 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.

The law on extension of time provisions, and more specifically the law on regulation 5.10 of the Patents regulations 1991, has been considered and summarised by Burchett J in Ferocem Pty Ltd v Commissioner of Patents (1994) 28 IPR 243 and more recently by Sackville J in A Goninan & Co Ltd v Commissioner Of Patents (1997) 38 IPR 213.  In both of these decisions it was stated that regulation 5.10 confers a broad discretion, which cannot be reduced to an imperative compliance with particular requirements.  On the contrary it is necessary to give proper, genuine and realistic consideration to all relevant aspects of the case. Relevant aspects include:

(a) Reasons provided on why an extension of time to lodge evidence-in-support is needed

Relevant reasons include explanations on any delays in filing evidence to date. The reasons why the evidence was not served in time are a relevant consideration, but a satisfactory explanation is not a mandatory requirement.

(b) The public interest

The public interest in determining a serious opposition on its merits is a relevant consideration. There is also the efficient and orderly administration of matters before the Patent Office to consider.

(c) The interests of the parties involved in the opposition

Disadvantages to either the applicant or the opponent are relevant considerations.

Reasons on why an extension of time to lodge evidence-in-support is needed

The reasons why an extension is sought relate to the difficulty in obtaining an Australian expert and subsequent delays once an expert was obtained.  While the reasons are brief, I note that they are very similar to reasons the applicant provided in a request for an extension of time to serve evidence in answer.  The opponent’s written submissions explain the situation in greater detail.  I am satisfied that the reasons in relation to the evidence of Mr Thurley would normally justify an extension of time.

The opponent’s evidence in reply also included a declaration by Professor Kraske, who also provided a declaration in support.  In my letter of 24 September 1999, I pointed out that the reasons for the extension were silent as to why this declaration was not filed in time.  In a letter dated 1 October 1999, the opponent stated:

“… in view of the decision taken by the Opponent to engage an expert Australian witness to support the proposed Evidence-in-Reply by Professor Kraske, and in view of the difficulties experienced in securing the services of such an expert as set out in our letter to the Commissioner dated 16 September 1999, it was decided that it was appropriate to delay the filing of Professor Kraske’s declaration in order that his evidence could be coordinated with that of the Australian expert as may be required.”

I do not find this argument particularly convincing.  The submissions do not clearly set out what the difficulty in finding an Australian expert has to do with Professor Kraske’s declaration.

The public interest

Sackville J recently considered the significance of public interest in cases where there has been a lapse in procedure at p222 in A Goninan & Co Ltd v Commissioner Of Patents (supra)

"The Commissioner must take into account the public interest in determining a serious opposition on its merits.  The Commissioner must give consideration to that aspect of the public interest even where the party has failed to comply with the procedural requirements specified in the regulations.  However as Burchett J made clear in Ferocem, the public interest must be weighed with and against other considerations.  It is not the only factor considered."

This has been well summarised in the Office decision on Patent 675388, Nippon Steel Corp v. BHP Steel (JLA) Pty Ltd, issued 26 February 1998. As the hearing officer so succinctly put it:

"On the issue of the public interest I am guided by the reasons of Burchett J in the Ferocem case and reiterated by Sackville J in Goninan (supra).  In short, the public interests are not all ranged on the same side.  On the one hand are the expeditious disposal of matters in the Patent Office, and questions of costs, efficiency, and of insistence of standards maintained.  On the other hand are the words of Kitto J in Kaiser Aluminium & Chemical v. The Reynolds Metal Company (1969) 120 CLR 136 at 143, viz a serious opposition should be dealt with on its merits rather than be shut out as a consequence of a failure of procedure."

The extension and associated difficulties such as the problems with the notice of intention have certainly led to a delay in proceedings.  However I also note that the opponent only sought an extension of one month and filed the evidence within that time.

A delegate of the Commissioner considered whether or not a serious opposition was in train in the current proceedings while dealing with a request for an extension of time to file evidence in support of the opposition (Marcal Paper Mills Inc v Grantek Inc, [1988] APO 66 (25 November 1998)). The delegate said:

“On the question of whether the opposition is a serious one, Mr Pearson submitted that Grantek has already received a considerable volume of evidentiary material from the opponent's US attorneys. The statement of grounds and particulars alleges want of novelty compared with several US patents, most of which were not originally cited by the examiner, and also want of novelty compared with 5 journal articles.

Reference has been made by both the opponent and the applicant that the equivalent patent in the United States is the subject of litigation.

I clearly cannot comment on the quality of the evidence, since none has as yet been filed. However based on the information in the Statement of Grounds and Particulars, and the comment from both parties that the equivalent case is being litigated in other jurisdictions, I am satisfied that a serious opposition is in train.”

Since the delegate’s decision the opponent has filed evidence in support and the applicant has filed evidence in answer.  It is clear that a serious opposition is in train.

The interests of the parties involved in the opposition

The opponent’s interests are in having the extension allowed so that their evidence in reply will be considered at the substantive hearing.  The applicant’s interests are generally the opposite.  The applicant’s interests also include having the matter determined as quickly as possible.  It also appears that the failure of the opponent to file a notice of intention to serve evidence in reply left the applicant in some uncertainty over whether or not evidence in reply would be filed.

CONCLUSION

Taking all of the above circumstances into account, I find that the opponent has justified an extension in relation to the evidence of Mr Thurley.  In relation to the declaration by Professor Kraske, the request did not provide reasons for the delay in filing this declaration.  However I note that all of the evidence in reply was filed within the time requested by the opponent.  I also note that the extension to file a notice of intention to serve evidence in reply was only filed as a result of the current action instigated by the applicant.  However, I note the comments by Burchett J in Ferocem Pty Limited v Commissioner of Patents, (1994) AIPC 91-057 where he quotes from Kaiser Aluminium and Chemical Corporation v The Reynolds Metal Company (1969) 120 CLR 136 at 143. That is, that “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.” These comments appear to be particularly relevant in the present case.

I allow the extension from 20 August 1999 to 20 September 1999 in which to file evidence in reply.

COSTS

I have allowed the extension to serve evidence in reply.  However the extension to file a notice of intention to serve evidence in reply was only filed as a result of the current action instigated by the applicant.  The failure to file a notice of intention has resulted in the current request for an extension of time being unnecessarily complex and has resulted in inconvenience to the applicant and to the efficient expedition of the matter.  I also noted above that the reasons for the extension were silent in relation to some of the evidence.  In these circumstances, I award costs against Grantek, Inc.

Brendan Bourke
Delegate of the Commissioner of Patents

Patent attorneys for the applicant  :  Spruson & Ferguson, Sydney

Patent attorneys for the opponent   :  H.R. Hodgkinson & Co., Sydney