Henkel Corporation v Makhteshim Chemical Works Limited

[2000] APO 51

OFFICIAL NOTICE

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Application  :          No.705467 in the name of Henkel Corporation

Title:          Pharmaceutical Compositions Comprising Lycopene

Action:          Request by Makhteshim Chemical Works Limited for an extension of time for filing evidence-in-support of the opposition and objection thereto by Henkel Corporation

Decision:          Issued            .

Abstract

A serious opposition is being pursued.  Even though no evidence has being filed to date, the opponent has provided a satisfactory explanation for the delay.  It is expected that the evidence will be filed within the extended time.  It is in the public interest that the current extension is allowed.

Accordingly the opponent has made out a proper case for the grant of the extension.  Therefore, the extension of time from 19 May 2000 to 19 August 2000 for the purpose of service and lodgement of the evidence in support in respect of the opposition is allowed.

PATENTS ACT 1990

DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS

Re:Patent Application No. 705467 by Henkel Corporation and request by Makhteshim Chemical Works Limited for an extension of time for filing evidence-in-support of the opposition thereto and objection thereto by Henkel Corporation.

BACKGROUND

Patent Application 47421/96 was filed on 22 December 1995.  The application was advertised accepted on 20 May 1999 and was given an Acceptance Number of 705467.  Makhteshim Chemical Works Ltd filed a notice of opposition to the grant of the Patent on 23 August 1999.   Statement of grounds and particulars was served on 19 November 1999. 

Evidence in support was due to be filed by 19 February 2000.  Makhteshim Chemical Works Ltd (Makhteshim) filed an extension of time application on 18 February 2000.  This was subsequently granted.  On 19 May 2000, Makhteshim filed for its second extension of time application from 3 months from to 19 August 2000. 

Henkel Corporation (Henkel) objected to this extension.  A hearing was set down in Canberra on 11 July 2000.  Dr Peter A. Stearne, Patent Attorney of Davies Collison Cave, represented the opponent.  Mr Richard H. Baddeley of Watermark represented the patent applicant.  Dr Peter Stearne appeared by telephone.  Henkel relied upon written submissions by Mr Baddeley.

Application for extension of time

The circumstances upon which the application for the extension of time were based are as follows:

“Our Israeli expert, Professor Avarim, requires further time for the preparation of his declaration, following review of the statement of grounds and particulars of opposition and the prior art cited therein.

“Our Australian patent attorney, Dr Peter Stearne, has met with our Australian expert.  Our Australian expert has reviewed the statement of grounds and particulars of opposition and prior art relied upon in this opposition.  A preliminary report has been sent to our Australian attorneys by our expert and further time is required for our Australian expert to complete his analyses and considerations so that evidence can be prepared and served in these proceedings.”

To put this in context, the circumstances upon which the first extension were based are as follows:

“Our overseas expert, Professor Avarim, is currently reviewing the specification of Application no. 705467, the prior art cited by us in our Statement of grounds of opposition, and the statement of grounds.  Further time is required to enable Professor Avarim to complete his analysis and for preparation of declaratory evidence from him.

Our Australian attorneys have sent material for review to our Australian expert who has been unavailable as a result of being overseas on vacation and has just returned to Australia.  Further time is required for our Australian expert to review relevant material, and then to meet with our Australian attorneys so that declaratory evidence may be prepared.”

Mr Baddeley for the patent applicant in a letter dated 7 June 2000 objecting to the current extension of time stated that the "time to serve evidence-in-support is becoming too protracted to be justified by reasons given in the latest application”.

The law on extensions of time

Service of evidence in support is governed by regulation 5.8(1).

5.8(1) If an opponent intends to rely on evidence in support of the opposition, the opponent must:

(a) serve on the applicant a copy of any evidence in support of the opposition within:

(i) 3 months of serving the applicant with:

(A) a copy of the statement referred to in subregulation 5.4 (1) ("filing of statement");

(b) file the evidence in support of the opposition as soon as practicable after the copy of the evidence has been served on the applicant.

The relevant law on the extension of time to serve evidence in opposition matters is governed by Regulations 5.10(2) and 5.10(5).

5.10(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).

5.10(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

(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 has been considered by Burchett J in Ferocem Pty Ltd v Commissioner of Patents (1994) 28 IPR 243 and Sackville J in A Goninan & Co Ltd v Commissioner Of Patents (1997) 38 IPR 213.  These cases established the following principles:

(a) The power is discretionary.
Regulation 5.10 confers a broad discretion, which cannot be reduced to an imperative compliance with particular requirements: Ferocem at 247-8 and Goninan at 220. Rather it is necessary to give proper, genuine and realistic consideration to all relevant aspects of the case.  Relevant aspects include:

(b) Explanation of the delay
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. Ferocem at 247

(c) The public interest
The public interest in determining a serious opposition on its merits is a relevant consideration: Goninan at 222.  It is necessary to consider the nature of the evidence the opponent seeks to adduce and the significance of that evidence in opposition proceedings: Goninan at 225-6. The delegate also needs to consider whether an extension should be granted to permit the opponent to rely on evidence which is immediately available: Goninan at 255.  Even if some evidence has been filed, the delegate still needs to consider whether an extension to allow further evidence is appropriate having regard to the public interest: Goninan at 255. The effect of delays on the efficient and orderly administration of the Patents Office is also a relevant consideration: Goninan at 222.

(d) The interests of the party seeking the extension
The interests of the party seeking the extension are a relevant consideration.

(e) The interests of other parties involved in the opposition
It is relevant to consider the disadvantages to the other party of delays in determining the Opposition: Goninan at 222.

DECISION

In applying these considerations to the facts of the case and taking into account the submissions of each party, I reached the following conclusions.

(a) Explanation of the delay

Mr Baddeley in his written submissions stated that:

"No explanation was provided in the original application for extension of time."

This was further expanded to include the comment that:

"If factors causing delay are not explained, there is less material on which the Commissioner can base his discretion.  Where no factors explain the need for an extension, there is no basis for one: Exxon Chemical patents Inc v BP Chemical Ltd [1999] APO 22 (22 March 1999)."

In his conclusion, Mr Baddeley stated that the extension of time should be refused because "sufficient information was not provided in the original extension of time".  [Underlining my emphasis]

I am somewhat perplexed by these comments in view of the fact that in the first extension of time reasons for that extension were given.  

Mr Baddeley further asserted that the Australian expert was not identified in either application and was only identified through a letter from the opponent to the applicant on 28 June 2000.  Although this letter is not in evidence, Dr Stearne at the hearing confirmed the contents of this communication.  It appears to me that Mr Baddeley is placing undue weight on the identity of the expert.  I cannot see how this is a relevant factor in the explanation of the delay.  It seems that this argument is more relevant to the issue of the public interest rather than relevant to the explanation of any delay.  I will consider the issue at that point.

Dr Stearne read from the letter of 28 June 2000.  Significantly, in the letter, Dr Stearne expected that the evidence of Professor Nestel would be served within the time period of the current applied extension.

As stated in the current application for the extension of time, a preliminary draft report has been issued.  Mr Baddeley stated that this raises "the question as to why further time was needed-after seven months-for a draft declaration to be prepared."  This statement appears to be in error as it was plainly stated in the first extension of time that the Australian expert was on vacation leave.  Since that time, as stated in Makhteshim's application for a further extension of time, Dr Stearne has met with the Australian expert who has reviewed the statement of grounds and particulars and the prior art cited therein.  The Australian expert has also drafted a preliminary report that has been sent to the Dr Stearne.  In his written submission, Dr Stearne stated that Professor Nestel had returned from vacation on 18 February 2000 and had provided the preliminary report on 19 May 2000.  I have no difficulty with this explanation.  I think it is entirely appropriate that Professor Nestel have further time in which to complete his analyses and considerations.  At the hearing, Dr Stearne stated that he was currently reviewing the draft declaration. 

Perhaps Mr Baddeley is suggesting that six months is too long because six months is a long period of time.  This seems to me to be constructing a particular requirement for extensions of time in opposition matters.  As noted by Burchett J in Ferocem, this argument reduces the delegate’s discretion to an imperative compliance with a particular requirement.  I do not agree with Mr Baddeley on this point.

Mr Baddeley also put forward the issue that as Professor Avarim is an “Israeli expert” the relevance of his evidence is questionable because consideration of inventive step involves determination of the state of common general knowledge in Australia.  Although Mr Baddeley raised this reason in regard to the explanation of the delay, it is more appropriate to consider the relevance of the evidence in the context of the public interest.  I will discuss this point later in that context.

Dr Stearne raised the point that both of the opponent’s experts are practising cardiologists with busy clinical practices.  This is not an unexpected outcome given the nature of the invention under consideration.  I believe that this adds further weight to the explanation given by Dr Stearne. 

In summary, I believe that the opponent has provided reasonable explanation of the cause of the delay in serving its evidence.

(b) The public interest

Under this heading, Mr Baddeley made two points.  Firstly as Professor Avarim is an “Israeli expert” the relevance of any evidence he may provide is questionable without explanation because consideration of inventive step involves determination of common general knowledge in Australia.  As Dr Stearne rightly pointed out at the hearing, Professor Avarim can comment upon other matters, not simply common general knowledge.  Dr Stearne also indicated that common general knowledge might be the same in different countries and hence the Professor’s evidence could be relevant to common general knowledge.  However, this is fundamentally a matter for the substantive hearing and ought not to be shut out unless it is completely untenable.  The evidence of Professor Avarim, who the opponent considers to be an expert in the art, must be considered significant to the determination of the opposition.  It is in the public interest that the extension is allowed for Professor Avarim’s evidence to be placed before the hearing officer.

Secondly, although it is understood that Professor Nestel is a prominent cardiologist, he was not initially identified in the extension application.  I could infer from this statement that Mr Baddeley has no issue with the evidence that Professor Nestel may adduce, only with the fact that he was not identified.  From what Dr Stearne has said I believe that Professors Nestel’s evidence would have a significant impact on the outcome of the opposition given his expertise in the field.  It is in the public interest that the extension is allowed for Professor Nestel’s evidence to be placed before the hearing officer.  Even if I were to agree with Mr Baddeley on this point about the expert not being identified in the application for the extension of time, I would consider that the evidence should not be shut out due to a failure in procedure: Kitto J in Kaiser Aluminium and Chemical Corporation v The Reynolds Metal Company (1969) 120 CLR 136 at 143.

In relation to expeditious disposal of matters before the Patent Office, Dr Stearne submitted that a) that the matters have been dealt with as expeditiously as possible and b) that extensions of time totalling six months are by no means out of the ordinary and generally conform with the normal time taken for the opponent to serve evidence in support particularly where the opponent is an overseas company and the experts providing evidence are medical specialists.

In relation to Dr Stearne’s first submission, there is no evidence to suggest that the opponent has been less than expeditious.  Reference has been made to the nature of the experts’ professions and it seems to me that in view of these facts coupled with the vacation leave for Professor Nestel, that the opponent is dealing with the matter as expeditiously as it can.  In relation to Dr Stearne’s second reason, I am of the view that this is not of great relevance as each case must be judged on its merits not according to some ‘average’ time.

(c) Interests of the party seeking the extension

Mr Baddeley commented on this point as follows:

“Interest is obviously in favour of allowance of an extension but this must be weighed against delay which has been too long.”

However, if the extension were not to be obtained then that effectively shuts off the opposition in view of the fact that no evidence in support had been filed.  The prejudice to the opponent’s case would be serious.

(d) Interests of the other party

Mr Baddeley for Henkel Corporation stated that “if delay continues, the prejudice to Henkel which seeks expeditious grant of its patent, increases.”  While this statement is undoubtedly correct, in the context of the facts of this case, I do not believe that the patent applicant would be seriously prejudiced if delay continued to the end of the current period of extension applied for by the opponent.

Concluding remarks by the parties

Mr Baddeley concluded:

“In all the circumstances, Makhteshim Chemical works did not provide sufficient information to justify an extension of time in its original application.  Ample time has been provided to serve evidence and the extension of time application ought to be refused.”

Dr Stearne concluded:

“We submit Makhteshim has provided a sufficient explanation for the granting of an extension of time within which to serve its evidence, that a serious opposition is being pursued, and that the applicant’s interest, and indeed the public interest, is served by allowing the application for extension of time in order to serve the evidence of Professors Nestel and Avarim.”

Conclusion

In my view, a serious opposition is being pursued.  Even though no evidence has being filed to date, the opponent has provided a satisfactory explanation for this delay.  It is my expectation that the evidence will be filed within the extended time.  It is my view that it is in the public interest that the current extension is allowed.

Accordingly, the opponent has made out a proper case for granting the extension.  Hence, I allow the extension from 19 May 2000 to 19 August 2000 for the purpose of service and lodgement of the evidence in support in respect of the opposition.

COSTS

Henkel Corporation has not been successful in its objection to the extension of time.  Accordingly I award costs against Henkel Corporation.

G.M.Cox
Delegate of the Commissioner of Patents

Patent attorneys for the applicant: Watermark, Perth 

Patent attorneys for the opponent: Davies Collison Cave, Sydney