IGT v Aristocrat Technologies, Inc
[2009] APO 11
•12 June 2009
ABSTRACTS OF DECISIONS
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Application : No. 2002334685 in the name of Aristocrat Technologies, Inc.
Title: Apparatus and Method for Retrofitting Gaming Machines to Issue and Redeem Tickets
Action:Opposition by Aristocrat Technologies Inc. to an extension of time under section 223
Decision: Issued: 12 June 2009
Abstract
This decision is related to the decision of the Commissioner’s Delegate in Aristocrat Technologies, Inc. v IGT [2008] APO 33 in which it was found that service of the Statement of Grounds and Particulars was not timely effected under the provisions of the Electronic Transactions Act 1999.
Section 223 extension of time granted.
At least two errors were found causative of the late service including failure to appropriately recognise an imminent deadline and mistaken belief relating to service using electronic communication.
Costs awarded against Aristocrat.
PATENTS ACT 1990
DECISION OF A DELEGATE OF THE COMMISSIONER OF PATENTS
Re:Patent Application No. 2002334685 by Aristocrat Technologies and an opposition by IGT to an extension of time under section 223
BACKGROUND
Patent application 2002334685 was filed on 25 September 2002 in the name of Aristocrat Technologies Inc. (hereafter Aristocrat) under the provisions of the PCT. It claimed priority from US basic application (09/968622) filed on 1 October 2001 and entered the National Phase in Australia on 1 April 2004.
The Australian application was advertised accepted on 17 January 2008 and a Notice of Opposition was filed by IGT on 17 April 2008. Under regulation 5.4, the opponent then had 3 months to serve a copy of their Statement of Grounds and Particulars (SGP) on the applicant. This set the deadline for serving the SGP at 17 July 2008.
IGT made a number of attempts to serve their SGP electronically at the applicant's address for service (their patent attorneys Griffith Hack, Melbourne):
· an email which was received by the Aristocrat attorney's server at 23:59:59 on 17 July 2008, one second before midnight;
· a facsimile which was received by the Aristocrat attorney's Melbourne Office at approximately 12:30 am on 18 July 2008; and
· a facsimile which was received by the Aristocrat attorney's Perth Office at 10:32 pm (Perth time) on 17 July 2008
Only the email was actually received by the applicant's address for service in Melbourne on 17 July 2008 and this occurred at one second to midnight. The applicant argued that this was outside of normal business hours when no one was around to receive the email and that the SGP had not been properly served on 17 July 2008.
A delegate of the Commissioner advised the parties that the Commissioner prima facie accepted the date of receipt of the email as the date of service and was therefore satisfied that service was completed in time.
The applicant disagreed with the delegate's view and requested the Commissioner dismiss the section 59 opposition under regulation 5.5 for failure to serve an SGP within the statutory deadline. This matter was heard in Canberra on 17 November 2008.
In her decision, (Aristocrat Technologies, Inc. v IGT [2008] APO 33), the hearing officer found that the SGP was in fact served on 18 July 2008, one day after the statutory deadline. She decided it premature to dismiss the s59 opposition before providing IGT an opportunity to file a section 223 extension request.
An application for an extension of time under section 223 was made by the Opponent on 5 January 2009, with supporting evidence in the form of a Statutory Declaration made by Mr Stephen George Krouzecky filed on 16 March 2009 (hereafter Krouzecky declaration). Subsequent correspondence between IGT and the Commissioner clarified that the application for extension was under subsection 223 (2)(a). Following an invitation by the delegate, Aristocrat provided comments and then objected to the allowance of the extension.
The matter was heard in Canberra on 20 May 2009. The opponent was represented by Mr Richard McCormack of counsel. The applicant was represented by Mr Nick Mountford, Patent Attorney of Griffith Hack, Melbourne, who appeared by video conference.
THE EXTENSION OF TIME
10. The application for extension of time relies on the Krouzecky Declaration filed 16 March 2009. Mr Krouzecky is a principal of the firm Hodgkinson McInnes Patents (HMcIP), responsible for and having carriage for the care and conduct of the present opposition by IGT. The relevant chronology of events is summarized from the Declaration as follows:
| Date | Event |
| 17 April 2008 | Notice of Opposition filed with IP Australia by Krouzecky, then partner of Wrays and Associates (hereafter Wrays) patent attorneys |
| 24 April 2008 | Copy of Notice of Opposition served by facsimile on Aristocrat’s address for service at Griffith Hack, Melbourne, outside of alleged normal office hours |
| 2 May 2008 | Griffith Hack confirmed service of copy of Notice of Opposition on 24 April by letter (subsequently received by Wrays). The letter is signed by Nick Mountford and identifies contact details including Griffith Hack’s principle email address, telephone and facsimile numbers and Mountford’s email address |
| “Late June” 2008 | IGT decides to transfer all files to HMcIP |
| 27 June 2008 | HMcIP notified of IGT file transfers, supplied with cursory listing of all file particulars which included Wrays reference number, application number or short file description and short status information as to whether case was in force or not. Listing included reference to present opposition |
| “Before June 30” 2008 | Krouzecky prepared detailed summary of all IGT oppositions at Wrays comprising index portion and detailed status portion (hereafter Version 1 opposition summary). The 3 most recent IGT oppositions including present opposition omitted from index portion of summary but included in status portion. Short reference made to SGP being due 17 July 2008. Following day Krouzecky noticed omissions in opposition summary and prepared updated version (hereafter Version 2 opposition summary). Version 2 oppositions also categorized into very urgent, semi-urgent and not urgent. Present opposition incorrectly designated as semi-urgent rather than very urgent. Krouzecky requests Wrays to forward Version 2 summary to HMcIP Krouzecky also creates “short list” of oppositions requiring urgent action. Agrees with Wrays that urgent files to be sent to HMcIP immediately. Present opposition omitted from short list of files to be sent to HMcIP |
| 30 June 2008 | Krouzecky resigns from Wrays |
| 1 July 2008 | Krouzecky officially commences with HMcIP. IP Australia requested to change address for service for various opposition cases, including the present opposition to HMcIP |
| 2 July 2008 | IP Australia faxes advice that address for service has been amended to HMcIP for present opposition. Krouzecky’s Version 1 opposition summary emailed to HMcIP |
| 3 July 2008 | Krouzecky moves to Sydney (from Perth) |
| 6 July 2008 | Krouzecky notices incorrect opposition summary version received from Wrays. Arranges for Version 2 to be forwarded by Wrays to HMcIP |
| 7 July 2008 | Krouzecky “properly” commences work in HMcIP office. No IGT files have arrived from Wrays. Wrays exercising lien over files until IGT accounts paid. |
| 14 July 2008 | Krouzecky travels to Perth and meets with Wrays. Receives group of “urgent” opposition files as specified by “short list”. Present opposition not received because not included in shortlist. |
| 16 July 2008 | Present opposition identified as requiring urgent attention by Krouzecky’s personal assistant following database entry of IGT cases from Version 2 opposition summary. Present opposition had not been entered until now because of incorrectly designated “semi-urgent” status. Instructions sought from IGT’s US attorneys. |
| 17 July 2008 Until 9:30 pm WST 11:59:59 pm EST | HMcIP provided instructions and information to compile SGP from US attorneys. File still not received from Wrays. Krouzecky (still in Perth) arranges for Sydney colleague to research and prepare SGP relating to novelty and inventive step. Krouzecky undertakes to complete remaining particulars and arrange service on Griffith Hack Melbourne that evening, taking advantage of WST difference of two hours Krouzecky prepares SGP, allowing 30 minutes to print and send by facsimile to Griffith Hack, Melbourne before 10 pm WST corresponding to midnight EST which he considered to be the cut off. Encountered technical difficulties with sending facsimile. Griffith Hack, Melbourne server receives emailed SGP from Krouzecky. Email communication also advises that SGP would be faxed to Griffith Hack’s Perth address and that should timely service not be acknowledged a s223 application would be filed |
| 18 July 2008 | Griffith Hack, Melbourne receives SGP by facsimile from Krouzecky. |
DECISION
11. IGT have requested a one day extension of time under section 223 to file their SGP. The significance of Aristocrat’s present objection lies in the fact that IGT’s substantive opposition will be dismissed if the extension is refused.
The law on Section 223
12. Section 223 permits the extension of time periods in limited circumstances. The present request for extension is under section 223 (2)(a). Section 223 (2) reads as follows:
Where, because of:
an error or omission by the person concerned or by his or her agent or attorney; or
circumstances beyond the control of the person concerned;
a relevant act that is required to be done within a certain time is not, or cannot be, done within that time, the Commissioner may, on application made by the person concerned in accordance with the regulations, extend the time for doing the act.
13. I am guided by the following principles to be found in decided cases, conveniently summarised in Lazer Safe Pty Ltd v. Commissioner of Patents [2001] AATA 967 at [11]
“(a) the statutory provision to extend time is beneficial in nature, and should be applied beneficially; (Re Sanyo Electric Co Ltd and Commissioner of Patents (1996) 36 APR 470 at 480)
(b) while the applicant has the burden of placing before the Tribunal the circumstances which it claims will justify the grant of an extension of time, that does not amount to a burden of proof and it is not appropriate that it should be so described; (Re Sanyo supra at 479)
(c) (i) for an extension to be granted, there must have been ‘an obvious error or omission’. Although there is no clear or complete meaning for the words "error or omission", (Kimberley-Clark v Commissioner of Patents & Anor (No.3) 13 IPR 56 (Federal Court of Australia) at 583-4) a distinction should be drawn between:
(A) errors or omissions affecting the carrying out of the parties' intentions; and
(B) the consequences of deliberate decision; (Total Peripherals Pty Ltd v IBM & Commissioner of Patents, AAT No. 13336 (1998) AATA 784 (30 September 1998)
(ii) an error or omission involves some type of flawed mental function in the carrying out of the parties' intentions and does not have to be "accidental or due to an inadvertent source"; (Outokumpu Harjavalta Metals Oy v WMC Resources Ltd (1996) 37 IPR 55 at 58).
(iii) errors or omissions resulting from faulty reflection, deliberation or mistake in judgment fall within the scope of s223; (Outokumpu; supra at 58)
(iv) error or omission may include a breakdown in procedure or a failure to exercise due diligence; (Oz Technology v Boral Energy Ltd (1999) APO 18 (2 March 1999)
(d) there must be a causal or connection between the error or omission and the relevant act that is required to be done within the stipulated time. In addition, the applicants for an extension must demonstrate that they had an intention to do the relevant required act, and than an error or omission on their, or their agent's behalf, reasonably could be said to have caused the failure to complete the relevant act in the time prescribed; (see Kimberly-Clark, supra at 579)
(e) (i) the balance of the relevant factors must favour the exercise of the discretion in favour of the applicant for an extension. The Commissioner, in balancing these factors, is entitled to proceed on the basis that it is "more important to consider the consequences of extending or refusing to extend time than to debate the reasons why the act was not done in time; (Re Sanyo, supra, at 479)
(ii) relevant factors include:
(A) whether there has been a frank, comprehensive and clear disclosure of all the circumstances relevant to weighing the discretionary consideration;
(B) whether a serious opposition has been foreshadowed;
(C) whether there has been undue delay in seeking an extension of time;
(D) the interests of the parties in refusing or granting an extension;
(E) the public interest in refusing or granting an extension.”
Was there an error or omission?
14. The present case may be divided into two temporally distinct sets of circumstances that have contributed to the failure of IGT to serve their SGP within the prescribed time. I will first consider the events leading up to 16 July 2008, and then consider the subsequent steps taken by IGT up until Griffith Hack’s receipt of the SGP by email at 11:59:59 pm on 17 July 2008 and by facsimile at 12:30 am 18 July 2008. I must then determine whether these events/circumstances constitute an error or omission within the context of section 223 (2)(a).
15. IGT submits that reasons associated with the transfer of their opposition files from Wrays to HMcIP led to a failure in the timely recognition of the urgency of the pending deadline for serving their SGP. Difficulties were encountered with the transfer of file information, the holding back of physical files until accounts were paid and the appropriate identification and classification of “very urgent” work. (Listed in the table above) Importantly, the lack of identification and the inappropriate classification of this “very urgent” work resulted in Mr Krouzecky only becoming aware of the necessity to file the SGP the day before its due date, 16 July 2008. Prior to leaving Wrays, Mr Krouzecky prepared an “opposition summary” in which he designated opposition files as either “very urgent”, “semi-urgent” or “not urgent”. Regrettably the present opposition was incorrectly assigned a status of “semi-urgent”. This was compounded when Mr Krouzecky prepared a “short list” of urgent cases for his own purposes and omitted any reference to the opposition. Wrays had agreed to send IGT files in a piecemeal fashion, with urgent cases taking priority. Because the opposition summary had not identified the present case as very urgent and the shortlist omitted the case altogether Mr Krouzecky was unaware of the situation. This also resulted in the file not being sent to HMcIP by Wrays. The incorrect and incomplete lists both constitute errors that caused a near-fatal delay in the preparation of the SGP. The errors are clearly the result of Mr Krouzecky’s flawed mental processes at the time. The errors may be distilled into a simple failure to identify the present opposition as “very urgent”.
16. Following recognition of the imminent requirement to serve an SGP Mr Krouzecky sought instructions from IGT’s US attorneys, received on 17 July 2008. He arranged for a colleague to prepare part of the SGP and undertook to complete service on that day. His email containing the SGP was received by Griffith Hack, Melbourne at one second to midnight. IGT submits that at the time Mr Krouzecky was of the belief that this would satisfy the requirements of timely service.
17. Mr Krouzecky was incorrect in this regard. Aristocrat requested that the Commissioner dismiss the s59 opposition under regulation 5.5 for failure to serve an SGP within the statutory deadline. In Aristocrat Technologies, Inc. v IGT [2008] APO 33 (15 December 2008), the delegate subsequently found the applicant had consented to receive electronic communications to enliven the provisions of the Electronic Transactions Act 1999. However, no specific information system was “designated” for the purposes of section 14(3) of the Act. As a result, section 14(4) of the ETA applies and the SGP was deemed to be served when the email was brought to the attention of the applicant’s agent, in this instance 18 July 2008.
18. Aristocrat submits that on the final day Mr Krouzecky had control of the matter but nonetheless failed to meet the relevant statutory requirements. While it is true that Mr Krouzecky failed to serve the SGP in time, I believe this to be merely a matter of hindsight. The question that must be answered is “What was his belief and expectation at the time?” If indeed Mr Krouzecky believed that he was effectively serving the SGP then this would clearly constitute an error resulting from faulty reflection, deliberation or mistake in judgment.
19. In his Statutory Declaration, Mr Krouzecky explains the reasons for his belief “that there was a reasonable precedent established in service of documents between Aristocrat AU and IGT and that service by email in the present circumstance, if received by Griffith Hack before midnight, would suffice as service”. They are relevantly extracted as follows:
“A copy of the Notice of Opposition, in accordance with standard practice adopted for other oppositions involving the related company of Aristocrat US, Aristocrat Technologies Australia Pty Ltd (Aristocrat AU) and Griffith Hack in Melbourne, who had acted as the address for service of Aristocrat AU in some of these oppositions, was served by facsimile on Griffith Hack on 24 April 2008 at 5.46pm WST, which corresponded to 7.46 EST, outside of the alleged normal office hours of Griffith Hack.” “Wrays subsequently received a letter dated 2 May 2008 from Griffith Hack confirming service of the copy of the Notice of Opposition on 24 April 2008 in respect of the Present Opposition.”
“I was aware that there was some uncertainty with sending communications by email, especially for service purposes; however, I was aware that Aristocrat AU had served some evidence on IGT by email in the past. Moreover, I refer to the opposition to Section 104 amendments in respect of Australian Patent Application 752636 (63152/99) in the name of Aristocrat AU and the service of evidence in support that was sent by email to Wrays standard email address on 7 November 2007. In that situation, no communication was made to Wrays regarding the sending of the email and Wrays reference to its email address appeared on its letterhead, no different materially to the manner in which Griffith Hack indicated its email address on its letterhead.”
“I also was aware that IGT had previously served a considerable amount of further evidence on the address for service for Aristocrat AU in the opposition against Australian Patent Application 754689 (81994/98). In the latter instance, however, I did send a communication to the attorney acting for Aristocrat AU advising that service by email appeared to be the only practical way of serving the further evidence given its quite considerable volume as opposed to facsimile. In that circumstance, similarly service was accepted on 29 February 2008.”
20. Aristocrat submitted that Mr Krouzecky had some doubt over whether email communication would effect service as it was his original intention to comply with the requirements for service by fax. Mr Krouzecky admits to “some uncertainty” and also refers to his email in which he surmises “goodwill might prevail to accept the service by email and subsequent facsimile as timely service”. I think it reasonable that Mr Krouzecky would ordinarily prefer to use well established methods of service and that he may have had some reservations about using less common channels. On balance, I think it reasonable to conclude that Mr Krouzecky was of the mind that the service of the SGP by email after hours on the final day would meet the requisite criteria. The unusual circumstances of the present situation are further supported by the original advice of a delegate of the Commissioner in that the Commissioner prima facie accepted the date of receipt of the email as the date of service. It is my view that Mr Krouzecky’s mistaken belief, or faulty ratiocination constitutes an error.
Was the failure to lodge the Statement of Grounds and Particulars because of the errors?
21. Having found that there was at least one error or omission, the next question is whether the failure to serve the SGP in time was because of the error. It is sufficient that an error or omission contributed to cause the failure to do the act. The relationship is one of cause and effect. Normally the error will be seen to thwart an intention to do the act.
22. Firstly, Mr Krouzecky’s failure to appropriately identify the present opposition as “very urgent” was clearly a cause in the delay of preparation of the SGP. Aristocrat submit that this was merely a “brief hiatus” and that it is not a relevant error in that it was not directly causative of the failure in timely service. I do not agree. Once aware of the situation, Mr Krouzecky took immediate steps to firstly obtain instructions from IGT and then complete service of the SGP. Because of the error, HMcIP had only one day in which to complete and serve the SGP, a very tight turnaround indeed. I think that had the error not happened the SGP would have been able to be served well in time and am satisfied that a causal link exists.
23. Secondly, regardless, of the above, Mr Krouzecky nevertheless undertook to complete service on the final day. Mr Krouzecky sought assistance from a colleague and planned his day according to the mistaken belief that he had until midnight. I am satisfied that this mistake in judgement was causal in IGT’s failure to serve the SGP in time.
24. It is clear that Mr Krouzecky intended to serve the SGP. There are two key errors that caused the delay. In my view, either of them may stand alone to enliven s223. Alternatively, the combination of the errors have directly contributed to the SGP being served a day late.
Should the discretion be exercised?
25. I have found that there was at least one error or omission and that the opponent failed to effect timely service of their SGP because of the error(s). I must now consider whether to exercise the discretion to extend time. The relevant considerations are whether there has been a full and frank disclosure of all relevant circumstances; the interests of the parties in refusing or granting the extension; the public interest, including the question of undue delay.
26. Aristocrat has submitted that IGT have not provided a full and frank disclosure. Mr Mountford contended that the absence of Mr Krouzecky’s list from evidence leads to an adverse inference. IGT claim privilege in the list. I believe this to be a reasonable explanation and find that there has been a sufficient disclosure of the relevant circumstances. The provision of the list would have only served to have corroborated IGT’s case.
27. The balance of interests of the parties strongly favours granting the extension. The consequence of refusing to grant the extension is dismissal of the substantive opposition. On the other hand, granting the extension will mean that the opposition to the grant of the patent will proceed, protecting the public interest that invalid patents are not granted. The SGP includes manner of manufacture, novelty and inventive step as grounds. From a cursory look at the specification the documents cited appear relevant. A serious opposition appears to be in train. The delay in requesting the extension, once its requirement was determined was not undue. The extension is for one day, not a significant period by any standard.
28. Overall, it is appropriate to exercise the discretion in the present case.
CONCLUSION
29. The opponent has shown the existence of an error or omission that caused the failure to serve the SGP in time. I am satisfied that an extension of time under section 223 (2)(a) is appropriate. I grant the extension under section 223(2) (a).
30. The time for serving evidence in support of the opposition expires three (3) months after the date of the letter from the Commissioner notifying the parties of the grant of this extension.
COSTS
31. The opponent has successfully argued that the extension be granted. In matters before the Commissioner, costs generally follow the event. In this case, I see no reason to depart from this approach and award costs against the applicant, Aristocrat.
Nicole Howard
Delegate of the Commissioner of Patents
Patent attorneys for the applicant: Griffith Hack, Melbourne
Patent attorneys for the opponent : Hodgkinson McInnes Patents, Sydney
12 June 2009