Innovia Security Pty Ltd v De La Rue International Limited - [2014] APO 46

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Innovia Security Pty Ltd v De La Rue International Limited
[2014] APO 46
Patent Application: 2008243094

Title:Arrays of Microlenses and Arrays of Microimages on Transparent Security Substrates

Patent Applicant:  De La Rue International Limited
Opponent:  Innovia Security Pty Ltd
Delegate:  Matt Kraefft
Decision Date:  26 June 2014
Hearing Date:  Written Submissions, completed on 6 June 2014
Catchwords:  PATENTS – extension of time to file further evidence – Patent Regulation 5.10 as in force before 15 April 2013 – amended statement of grounds and particulars – new material in evidence in reply – response by way of further evidence from applicant – satisfactory explanation of delay – public interest favoured allowing the extension – extension of time allowed.

Representation: Patent applicant: Davies Collison Cave, Melbourne.
Opponent:Watermark, Melbourne.

IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2008243094

Title:Arrays of Microlenses and Arrays of Microimages on Transparent Security Substrates

Patent Applicant: De La Rue International Limited
Date of Decision: 26 June 2014
DECISION
The applicant has provided a satisfactory explanation for the delay in filing further evidence. The public interest favours allowing the requested extension of time. The interests of the parties are largely offset. On balance it is appropriate to extend the time.
Extension of time allowed until 1 August 2014 to file further evidence.
REASONS FOR DECISION
Background

In a decision dated 1 April 2014 (Innovia Security Pty Ltd v De La Rue International Limited [2014] APO 18), a delegate of the Commissioner allowed an amendment of the opponent’s statement of grounds and particulars in this opposition. Consequential to allowing that amendment, the delegate also allowed the applicant one (1) month from the date of the decision to file further evidence.
On 1 May 2014, the applicant filed an application for an extension of time to file its further evidence. The extended period sought was three (3) months up to 1 August 2014.
The opponent objected and requested to be heard.
The hearing was conducted by means of written submissions. Both parties filed written submissions.
Applicable law
On 15 April 2013, the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No.1) commenced (“the RTB Regulation”). This regulation significantly amended the Patent Regulations 1991 as they apply to patent oppositions. The ability to file further evidence is not available for oppositions commenced on or after 15 April 2013. For oppositions commenced before 15 April 2013, the provisions of the previous regulation 5.10 of the Patent Regulations allowed the filing of further evidence. The present opposition is in the latter category.
The law governing extensions of time to file evidence in a patent opposition has also changed under the RTB Regulation. New regulation 5.9 covers extensions of time which is generally stricter than the previous regulation 5.10 for extensions of time. The appropriate provision for an extension of time to file evidence depends on the date on which the relevant evidentiary period commenced. This follows from sub-regulation 23.36(2), item 2, of the RTB Regulation. In this way, an application for an extension of time may be subject to the new regulation even if the opposition commenced before 15 April 2013.
New sub-regulation 5.9(1) allows the extension of an evidentiary period mentioned in new regulation 5.8. On the other hand, regulation 5.8 describes evidentiary periods only in respect to evidence in support, evidence in answer and evidence in reply. Regulation 5.8 does not define an evidentiary period in respect to further evidence. This means regulation 5.9 does not apply to extending time to file further evidence. Regulation 5.10 of the Patent Regulations as in force before 15 April 2013 is consequently untouched by the RTB Regulation in respect to extensions of time to file further evidence.
Sub-regulation 5.10(2), as in force before 15 April 2013, enabled extensions of time for filing evidence. The Commissioner must not grant an extension unless satisfied that the parties have been notified of the application for extension (reg. 5.10(5) (b)), has given the parties a reasonable opportunity to be heard (reg. 5.10(5)(c)(i)), and is reasonably satisfied the extension is appropriate (reg. 5.10(5)(c)(ii)). In the present case the parties have been notified and have had an opportunity to be heard. The only remaining question is whether it is appropriate to extend the time.
This question has been considered several times by the Federal Court (Ferocem Pty Ltd v Commissioner of Patents [1994] FCA 981; 28 IPR 243, A Goninan & Co Ltd v Commissioner of Patents [1997] FCA 424; 38 IPR 213 and National Starch & Chemical Co v Commissioner of Patents [2001] FCA 33; 50 IPR 398). In summary, the power to extend time is discretionary, so it is necessary to give genuine and proper consideration to all relevant considerations. (Ferocem at 247-8, Goninan at 220). Relevant considerations include:
Amendment of the Statement of Grounds and Particulars
The opponent amended the statement of grounds and particulars to introduce the ground of lack of utility and provided particulars in respect to that ground. The amended statement also added several further documents of prior art and discussion thereof in respect to novelty, inventive step and common general knowledge. These additions appeared to be broadly aimed at bringing the statement of grounds and particulars in line with the opponent’s evidence in support and evidence in reply. The opponent also introduced a few additional particulars on fair basis and clarity.
In Innovia (supra), the delegate at [46] indicated an expectation that the applicant’s further evidence should be focused on the new ground of utility. However, following correspondence from the applicant pointing out the other additions made to the statement of grounds and particulars, a further delegate, by correspondence dated 10 April 2014, indicated that the first delegate did not impose a term limiting the nature of the evidence to be filed. The second delegate concluded that if the original one month period was found to be insufficient for the applicant to file its further evidence then the period could be extended under regulation 5.10(2) as it stood prior to 15 April 2013.
Application for Extension of Time
The applicant’s application for the extension of time cited the following circumstances to justify the extension.
The applicant has identified and retained an expert witness in respect to the amended statement of grounds and particulars and the allegedly new evidence filed as evidence in reply. The applicant has also prepared initial evidence in respect to the new ground of utility. The applicant stated that further time was required to finalise its evidence, particularly noting the inclusion in the amended statement of grounds and particulars of 14 additional pieces of prior art and the further development of argument on novelty, obviousness and common general knowledge. Finally the applicant stated that its witness would be unavailable for most of the month of June.
Explanation of Delay
The opponent submitted the applicant has not been diligent in respect to the new matters in the amended statement of grounds and particulars. The opponent suggested these new matters should have been identified shortly after the filing of the amended statement and particularly noted that it was only since 1 April 2014, the date of the Innovia (supra) decision, that the applicant had made some initial enquiries with the expert in relation to the other matters introduced by the amended statement and the opponent’s new evidence.
The applicant submitted that it had promptly raised strong and legitimate objections to the opponent’s amended statement and the evidence in reply. In the light of those objections, the applicant further submitted it would have been unreasonable for the applicant to incur costs associated with the amended statement and the evidence in reply until it had received notice that the amended statement and/or the evidence in reply would be allowed.
In Shelford Services Pty Limited v Baylor Research Institute, [2014] APO 20 at [18], two points for the preparation of evidence were discussed. On the one hand, in that case it was a reasonable expectation that an applicant, seeking an extension of time, should demonstrate that it had started considering or thinking about how it would defend its case at an early stage. On the other hand, it was also reasonable for an applicant to defer the costs of firm action in preparing evidence in answer until evidence in support was filed. While that decision related to an extension of time to file evidence in answer under the new regulation 5.9, I think the same approach is also applicable in the present case.
In this case the evidence in reply was completed on 16 January 2014. The opponent requested to amend the statement of grounds and particulars on 22 January 2014. In the letter accompanying that request, the opponent indicated that the new documents D7 – D9 in the amended statement were included in the evidence in support while the new documents D10 – D18 were included in the evidence in reply. From this point I would expect the applicant to have at least considered or thought about its response. I find the applicant has done this. The applicant filed two letters on 13 February 2014, each raising serious issues on the face of it, supported by the applicant’s analysis of the issues. One letter related to the opponent’s amended statement of grounds and particulars, particularly mentioning the new utility ground. The other letter made submissions that parts of the evidence in reply were not properly in reply. At this point I would find it quite reasonable for the applicant to have deferred any costs of firm action, such as preparing further evidence, until these matters were resolved. The resolution occurred when the Innovia (supra) decision issued on 1 April 2014, with some clarification by the Patent Office on 10 April 2014, as mentioned above, in respect to the scope of the further evidence available to the applicant.
With this in mind, I will turn to the sufficiency of the one month period allowed in that decision. It is not open to review that decision (R v Smith (Commissioner of Patents); Ex Parte Mole Engineering Pty Ltd [1981] HCA 25, (1981) 147 CLR 340). I can only turn my mind to whether an extension of time is appropriate on the merits of the present application for the extension, that is, in this case, by the nature of the evidence the applicant seeks to adduce and the circumstances preventing the filing of that evidence in the available time.
The applicant submitted that the period for filing further evidence was simply insufficient having regard to the nature of the amended statement of grounds and particulars and the evidence in reply. The applicant particularly noted that, besides the utility ground, the further evidence would need to address other amended matters, namely 14 additional pieces of prior art and further development of argument on novelty, obviousness and common general knowledge, amongst other changes.
As mentioned above, the opponent has indicated that D7 – D9 were filed as evidence in support. I would thus expect that any issues from the applicant in respect to D7- D9 should have been addressed during the applicant’s evidence in answer stage. Moreover, the opponent stated the new documents D19 and D20 were priority documents of the patent application on which the present divisional application is based. The applicant made a point in submissions about the purported relevance of D11 being dependent on D19. However the opponent’s point on this relationship is only that D19 acknowledges some of the disclosures of D11. I regard D7 – D9, D19 and D20 of no particular relevance in considering whether the present application for an extension of time should be granted. Consequently, in respect to volume of new material from the opponent, I consider there are only 9 additional pieces of prior art, D10 – D18, not 14 documents as suggested by the applicant in its application for an extension of time. Nonetheless, 9 documents, on the face of it in this case, is still a significant amount of new material to work through. I can also appreciate the need for the applicant to address further issues on novelty, inventive step and common general knowledge arising from the inclusion of these documents as well as the utility ground.
I conclude there is a satisfactory explanation for the delay in filing further evidence.
Public Interest
The public interest requires a balance between determining a serious opposition on its merits (Goninan at 222) and the efficient and orderly administration of the Patent Office (Ferocem at 247, Goninan at 222).
Aspects of the amended statement of grounds and particulars and the evidence in reply amount to new material, and arguably an additional case for the applicant to answer. Those aspects are the utility ground and D10 – D18, and accompanying material in respect thereof. A proper determination of the opposition on its merits would, on the face of it, require a response from the applicant to these aspects. In respect to the administration of the Patent Office, the extension request would amount to an additional three months in the proceedings, and includes a period of unavailability of the applicant’s witness for most of the month of June. The opposition proceedings in this case commenced almost 4 years ago. I find the requested extension, if allowed, would not be particularly detrimental in the overall proceedings.
I conclude that the proper determination of the opposition on its merits in this case outweighs the need for expeditious disposal of the opposition at this time. The public interest favours allowing the extension.
Interests of the Parties
The applicant submitted that its interest lay in being afforded a proper opportunity to respond to the new case put against it. The opponent did not directly discuss its interest in submissions. I presume its interest may be in the efficient disposal of this opposition. If that is so, then I would find the parties’ interests largely offset.
CONCLUSION
I have found the applicant has provided a satisfactory explanation for the delay in filing further evidence. I have also found that the public interest favours allowing the requested extension of time. I also conclude the interests of the parties are largely offset. On balance I conclude it is appropriate to extend the time.
I allow an extension of time until 1 August 2014 for the applicant to file further evidence.
COSTS
Both parties sought their costs of these proceedings. The opponent further submitted that if the extension of time were granted then there should be no award of costs. The opponent’s basis for this request was that relevant correspondence between the applicant’s attorneys and IP Australia was initially not supplied to the opponent’s attorneys.
Two items were letters from the applicant’s attorneys submitting, respectively, that parts of the evidence in reply were not properly in reply, and the seeking of leave to file further evidence. The third item was the letter from the office of 10 April 2014 mentioned above. In respect to the latter, the official file indicates that the same letter was sent to both parties at that time. The submissions in the first item relate to points made in the application for the extension of time. The second item is the item that led to the generation of the third item. I see no significant detriment here. The applicant’s case for an extension of time was reasonably clear from its application for the extension of time. Moreover the opponent has acknowledged that new matter, namely D10 – D18, was filed in evidence in reply.
I see insufficient reason to depart from the usual practice that costs follow the event. The opponent has been unsuccessful in its objection to the extension of time. I award costs in accordance with Schedule 8 against the opponent, Innovia Security Pty Ltd.
M G Kraefft
Delegate of the Commissioner of Patents