Henkel Kommaditgesellschaft Auf Aktien and Baroid Drilling Fluids, Inc v Fina Research Sa

[2000] APO 31

OFFICIAL NOTICE

DECISION OF A DEPUTY COMMISSIONER OF PATENTS

Application  :          No. 639219 in the name of Henkel Kommanditgesellschaft auf Aktien and Baroid Drilling Fluids, Inc.

Title:          Use of Selected Ester Oils in Bore-Flushing Fluids,  particularly for the Development of Off-Shore Natural Oil and Gas Deposits (1)

Action:          Opposition thereto by Fina Research SA and Request for Production of Documents

Decision:          Issued            .

Abstract

Fina requested the Commissioner to issue a notice with a summons for the production of documents relating to the availability and/or circulation of a specified document.

Henkel and Baroid have lawful excuse not to comply with the notice for production on the ground that the notice was not served in sufficient time to enable them to reasonably make arrangements to produce the items required.  Furthermore the documents in the notice are not sufficiently identified and compliance with the notice would be oppressive.  

PATENTS ACT 1990

DECISION OF A DEPUTY COMMISSIONER OF PATENTS

Re:Patent Application No. 639219 by Henkel Kommanditgesellschaft Auf Aktien and Baroid Drilling Fluids Inc and Opposition thereto by Fina Research SA and Request for Production of Documents

BACKGROUND

Patent application 639219 in the name of Henkel Kommanditgesellschaft Auf Aktien (Henkel) and Baroid Drilling Fluids Inc (Baroid) was filed on 11 December 1989 as PCT/EP89/01512 claiming priority from a German basic application P38 42 659.5 filed on 19 December 1988.  The application was advertised accepted on 27 July 1993.

Fina Research SA (Fina) filed a notice of opposition to the grant of a patent on 22 October 1993.  Patent application 639219 was also the subject of section 104 amendments, which were advertised accepted on 25 June 1998, and opposed by Fina on 25 September 1998.

The evidentiary stage of the proceedings was finalised on 13 December 1999 and the section 59 and section 104 matters were set down for hearing together.

On 16 February 2000 Fina requested the Commissioner to issue a notice with a summons for the production of certain documents pursuant to section 210(c).  The notice was issued on 17 February 2000.  It required Henkel and Baroid to deliver certain documents to the Commissioner by 10.00 am on 22 February 2000.  By letter from their patent attorney dated 21 February 2000 Henkel and Baroid indicated that they had lawful excuse not to produce the documents sought and requested that the Commissioner not require production.

A hearing took place on the opposition matters in Sydney on 22-25 February 2000.  Dr Annabelle Bennett SC and Mr Stephen Burley of counsel and Ms Jill Newton and Mr John O’Connor of Spruson & Ferguson represented Henkel and Baroid.  Mr John Garnsey QC of counsel and Mr Paul Whenman of F.B. Rice & Co represented Fina.  Dr Francis Leyder European Patent Attorney of Fina and Dr Jurgen Reinhardt of Henkel attended as observers.  The hearing officer was Mr Rob Melvin.

During the course of the hearing Mr Garnsey indicated that Fina disputed the validity of the reasons for non-compliance with the notice for production.  Mr Melvin did not have the delegation to hear the parties on this matter and so I conducted a hearing in Canberra by telephone on 25 February 2000.

APPLICABLE LAW

The power for the Commissioner to require production is provided under section 210 of the Act:

The Commissioner may, for the purposes of this Act:

(a)summon witnesses; and

(b)receive written or oral evidence on oath or affirmation; and

(c)require the production of documents or articles; and

(d)award costs against a party to proceedings before the Commissioner.

The practice of the Commissioner in dealing with a request to issue a Notice Requiring Production is as recited in Eli Lilly & Company v Novo Nordisk A/S [1999] APO 45 (2 August 1999); that is the Commissioner:

"… will consider ex parte whether a requested notice has adjectival relevance. Unless adjectival relevance is clearly lacking, the Notice will be issued - with the expectation that any issues of lack of relevance will be dealt with as a matter of as lawful excuse for non-compliance with the Notice."

Thus the person to whom the notice is given must either produce the documents identified or provide to the Commissioner a lawful excuse. Where there is a dispute as to compliance with the notice it is appropriate that both the party on whom the notice has been served and the party seeking production should be heard.

NOTICE FOR PRODUCTION

Henkel and Baroid were required to produce "documents relating to the availability and/or circulation inside and outside Australia of the prior art documents

• 1.   Proposal (Henkel) "Formulations of formation-protecting drilling fluids for deep drilling with special regard to environmental aspects" (June 1986)

• 2.   "Mineral oil free oil-based drilling fluids developments and outlook" (Herold, Muller, von Papavicza, Henkel)"

At the hearing Mr Garnsey indicated that Fina did not wish to proceed with respect to the document identified in the second bullet point.  In relation to the first bullet point, Fina sought production of documents up to the priority date of 19 December 1988.

SUBMISSIONS

In the letter of 21 February 2000 from their patent attorney, Henkel and Baroid listed several reasons why they had lawful excuse not to produce the documents sought.  These reasons included:

1. The documents identified by the bullet points were not prior art documents.  Documents "relating to" their dissemination are not relevant to these proceedings.  Hence the request for such documents is an exercise in "fishing".

2. Documents relating to circulation or availability outside Australia are irrelevant because this is a 1952 Act case.

3. There was insufficient time for the applicants reasonably to make arrangements to produce the items.

4. The category of documents sought is hopelessly broad and the requirement to search for such documents is therefore oppressive.

At the hearing Dr Bennett also made the following additional points:

1. The issue here was one of discovery rather than production.

2. The onus had shifted from the opponent to the applicant to establish publication.

3. There was no specificity as to the documents required to be produced.

4. There was no suggestion that the documents actually existed.

5. Compliance with the notice would necessitate looking at every document in the possession of each applicant and this is oppressive.

Dr Bennett stated that there was no proof of publication of the document in Australia.

Dr Bennett then indicated that if I found that Henkel and Baroid had no lawful excuse, there would be significant delay in trying to locate the documents, if indeed there were any documents in the category sought. She submitted that any delays would be detrimental to the applicant.
A preliminary search had failed to locate any documents in the specified category, and Dr Bennett provided declarations to support this.

Mr Garnsey made the following points in response:

1. The document was one of the patentee's own documents and had been the subject of declarations from both the opponent and the applicant.

2. Circulation of the document in Australia was directly relevant.  Circulation outside Australia could be relevant if persons with knowledge of the document came to Australia from time to time.

3. The terms of the notice for production were sufficient to identify the documents required.

4. It is not unreasonable to ask the patentee as to whom they had sent the document.

5. Since some effort has already been made to conduct a search, the notice for production should be enforced.

DECISION

On the question of relevance, the document identified in the first bullet point of the notice was referred to in declarations from both the opponent and the applicant in the section 59 opposition.  I understand the document may be relevant to the ground of obviousness.  In dealing with a serious ground of opposition I would expect a responsible opponent to try to establish all the relevant facts to support that ground.  The publication date of a document of prima facie relevance is therefore important.  Accordingly I think it is appropriate for the opponent to make reasonable investigations to ascertain this date.  If this entails requiring the applicant to produce documents to establish this date, then I consider this to be a proper subject for production under section 210(c).  This does not shift the onus from the opponent to the applicant to establish publication as Dr Bennett submitted.  The onus is on Fina to establish the publication date of the document. To do this they seek production of certain documents from the applicant and those documents appear to be relevant to the proceedings.  Therefore, based solely on the issue of relevance, Henkel and Baroid do not have lawful excuse to fail to comply with the notice.

The notice for production was sought in order to try to establish the publication date in Australia of a specified document.  I would agree with Dr Bennett that documents relating to the availability or circulation outside Australia are irrelevant because the opponent is attempting to prove the ground of obviousness.  Henkel and Baroid therefore have lawful excuse not to produce documents relating to the availability or circulation outside Australia of the specified document.  I regard this as a limitation on the class of documents to be produced rather than a finding that they do not have to comply with the entire notice.

On the question of insufficient time for the applicants to produce the documents, I agree that 4 days (the time between service of the notice and the time to produce) are insufficient for two overseas companies to deliver documents to the Commissioner.  Henkel and Baroid therefore have lawful excuse not to comply with the notice.  However the opposition process has already been subject to considerable delay, and furthermore Fina sought further time to respond to a document put in by the applicants at the hearing.  Therefore it would not be unreasonable for a new notice of production to be issued giving a longer time frame for response.  I take Dr Bennett's point that any delays would be detrimental to the applicant.  However this must be balanced against the public interest that all relevant material be placed before the Commissioner so as to achieve the optimum outcome of the opposition.  I will therefore consider the remainder of the arguments put forward as lawful excuse.

Most of these arguments centre around the specificity of the documents to be produced and whether the exercise is one of discovery or production.  In terms of the specificity, Mr Garnsey considered that it was a simple question to be answered, merely requiring knowledge as to whom the document had been sent.  Had the notice been couched in terms of circulation lists, then I think the applicants could hardly have argued that the notice lacked specificity.  However the notice refers to "documents relating to the availability and/or circulation".  Such wording is not in itself unduly broad, depending on all the circumstances concerning the demand for production (Lucas Industries Ltd v Hewitt (1978) 18 ALR 555).

Fina is trying to establish when a specified document was published in Australia.  In order to do this they would need to couch their request for production in sufficiently broad terms to elicit all documents that could bear on this matter.  Consequently I do not believe it would be reasonable for them to limit their request to circulation lists.  However there does not seem to me to be a readily identifiable class or classes of documents to be produced.  As Dr Bennett pointed out, in order to comply with the notice each of Henkel and Baroid would have to inspect every document in their possession to see if it was relevant.   In my view this would be oppressive given the fact that these are 2 large multinational companies and would have records at a number of locations around the world.  Therefore I find that the notice for production does not sufficiently identify the documents to be produced, compliance with the notice would be oppressive and hence Henkel and Baroid have lawful excuse not to comply with the notice.

I have found that Henkel and Baroid have lawful excuse not to comply with the current notice for production.  However it may be that the establishment of the publication date of the document identified in the first bullet point in the notice for production is critical in determining the outcome of the opposition.  The onus would then be on the applicant to produce documents to establish this date and a further notice for production could be issued at this stage.  Further consideration of this matter should therefore be deferred until it is known whether it is critical to establish the publication date.  

CONCLUSION

I find that Henkel and Baroid have lawful excuse not to comply with the notice for production on the ground that the notice was not served in sufficient time to enable them to reasonably make arrangements to produce the items required.  Furthermore the documents in the notice are not sufficiently identified and compliance with the notice would be oppressive.  As such Henkel and Baroid have lawful excuse not to comply with the notice.

COSTS

As the hearing on this matter was concurrent with the hearing on the section 59 opposition, it is appropriate that the issue of costs in relation to this hearing be considered in the context of the award of costs for the opposition.  I therefore defer the issue of costs for consideration by Mr Melvin in his decision on the opposition.

Janet Werner
Deputy Commissioner of Patents

Patent attorneys for the applicant  :  Spruson & Ferguson, Sydney

Patent attorneys for the opponent   :  F.B. Rice & Co, Sydney