Innovia Security Pty Ltd v De La Rue International Limited
[2014] APO 18
•1 April 2014
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Innovia Security Pty Ltd v De La Rue International Limited [2014] APO 18
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: Dr N. R. Madsen
Decision Date: 1 April 2014
Hearing Date: Written submissions completed on 7 March 2014
Catchwords: PATENTS – amendment of the statement of grounds and particulars – ground of utility added – amendment requested after completion of evidence in reply – error or omission established – balance favours exercising of Commissioner’s discretion – period allowed for applicant to file further evidence
Representation: Patent applicant: Davies Collison Cave
Opponent:Watermark
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: 1 April 2014
DECISION
Amendment to Statement of Grounds and Particulars allowed
No award of costs
The applicant has one month to file further evidence
REASONS FOR DECISION
Background
Patent application number 2008243094 was filed by De La Rue International (De La Rue) on 3 November 2008 as a divisional application of 2005238699. The application was accepted on 7 July 2011. On 28 October 2011, Securency International Pty Ltd, now Innovia Security Pty Ltd (Innovia), filed a Notice of Opposition to the application followed by a Statement of Grounds and Particulars (SGP) on 30 January 2012. The SGP included novelty, inventive step, manner of manufacture and Section 40 as grounds of opposition to the application.
Evidence in support was filed and complete by 30 January 2013. Evidence in answer was filed and complete by 16 October 2013. A number of extensions of time were granted to both parties during these evidence periods.
On 16 October 2013, the applicant filed a request to amend the specification and a first statement of voluntary amendments under Section 104. In response, the opponent commented on these amendments as being not allowable. The applicant filed a second set of voluntary amendments on 18 November 2013 in order to address the comments of the opponent. The Commissioner advertised the request to amend the specification on 16 January 2014.
The opponent filed and completed evidence with evidence in reply on 16 January 2014. On 22 January 2014 the opponent filed a request to amend the SGP. While the proposed amendment provided new particulars under the current grounds of opposition it also sought to add the new ground of utility as well as to add new particulars to support this ground.
On 13 February 2014 the applicant filed an objection and request to be heard in regard to the requested amendment to the SGP. A delegate of the Commissioner determined that the hearing would be based upon written submissions. Both parties have filed written submissions.
The relevant law
As a consequence of the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 there are substantial changes to Chapter 5 of the Patents Regulations 1991. In the case of the present application and the present request to amend the SGP, the request is governed by Regulation 5.9 as in force immediately before 15 April 2013.
Regulation 5.9 relates to amendment of the SGP, and relevantly states:
(1) Subject to subregulation (2), the Commissioner, on the written request of an opponent and subject to such terms as the Commissioner may specify:
(a) if the Commissioner reasonably believes that an amendment of a statement referred to in regulation 5.4 corrects an error or omission by the opponent or by his or her agent — may amend the grounds of opposition set out in the statement; or
(b) …
(c) must amend particulars relating to a ground set out in a statement that is served and filed under regulation 5.4.
(2) The Commissioner must not allow an amendment requested under subregulation (1), if:
…
(d) he or she does not reasonably believe that the applicant has been notified of the proposed amendment.
(e) [repealed]
(3)The Commissioner must give the parties an opportunity to make representations concerning the proposed amendment.
(4)If the Commissioner allows an amendment, he or she must give the applicant a copy of the statement as amended.
I note that the regulations were amended on 29 November 2000 to remove the requirement in paragraph 5.9(2)(e) that an amendment is not allowable if the Commissioner reasonably believes a person will be unduly prejudiced by the amendment. In the present case, the applicant has been notified of the proposed amendment and the parties have been given an opportunity to make representations.
The matter for determination relates to fact that the amendment seeks to introduce the new ground of utility and consequently is subject to paragraph 5.9(1)(a). As the requested amendment also introduces new particulars under the new ground of utility it must follow that allowance of such an amendment under paragraph 5.9(1)(a) will provide for allowance of the associated new particulars under paragraph 5.9(1)(c). However if the Commissioner’s power is not exercised under paragraph 5.9(1)(a) to allow the new ground of utility then there will be no basis for those associated particulars to be amended under paragraph 5.9(1)(c).
10. In relation to the operation of paragraph 5.9(1)(a) it is clear that the Commissioner may allow an amendment to the ground if he or she reasonably believes that the amendment corrects an error or omission. The power to amend is discretionary, so “the opponent must demonstrate both the facts that enliven the power, as well as the circumstances that justify the exercise of that power” (Biosys v Ecogen Australia Pty Ltd (1993) 26 IPR 688).
The application to amend the SGP
11. The opponent’s reasons provided with the application to amend the SGP were:
“To amend the Statement of Grounds and Particulars to include further documents brought to light in the preparation of evidence.”
12. In the opponent’s written submissions it is stated that:
“…there was an error or omission by the opponent's attorney in that the ground of lack of utility was omitted by mistake from the original Statement of Grounds and Particulars filed on 30 January 2012 in this opposition.”
13. A declaration by John Roger Green accompanied by Exhibits JRG-1, JRG-2 and JRG-3 was provided as evidence. The declaration discusses the circumstances leading to the failure of the opponent to include the ground of utility before 22 January 2014. In particular the declaration discusses at paragraph 3 that:
“On 28 October 2011, Watermark filed a Notice of Opposition to Australian Patent Application No. 2008243094 in the name of De La Rue International Limited (“the Application"), which is a divisional Application of Australian Patent Application No. 2005238699 (“the parent application”). We were instructed to oppose the Application on all of the grounds on which the parent application was opposed.” (my emphasis)
14. According to the submissions of the opponent and associated declaration, a first attorney employed at Watermark was responsible for the conduct of the opposition to the opposed parent application. This attorney left Watermark in about March of 2011. At this point a second attorney assumed responsibility for the conduct of the opposition to the parent application. This second attorney was also responsible for the opposition to the present (divisional) application from the time of filing of the Notice of Opposition until his departure in June of 2013. The submissions and declaration provided by the opponent state that it was this second attorney who inadvertently omitted to include the ground of utility in the SGP filed on 30 January 2012.
15. According to paragraph 8 of the declaration:
“After the completion of Evidence in Support on 30 January 2013, an amended Statement of Grounds and Particulars was prepared by the second attorney on 31 January 2013:
(a) to include two further prior art documents, brought to our attention by the witness, Dr Michael Hutley;
(b) to add new particulars to the ground of lack of fair basis; and
(c) to add the new ground of lack of utility of the invention omitted in error from the original statement filed on 30 January 2012.”
16. A copy of this amended SGP was provided as Exhibit JRG-2. From the file record and the submissions of the opponent it is clear that the second attorney failed to file this amended SGP. A copy of a letter from the attorney dated 31 January 2013 to the opponent is provided as Exhibit JRG-3. This letter discusses the filing of evidence in support and amendment to the SGP. Regarding the amendments to the SGP the letter relevantly states:
“Lastly, we added a new ground of the lack of utility of the invention”.
17. This second attorney left Watermark in June of 2013 at which time the declarant assumed responsibility for opposition to this application. The declarant proceeded to complete evidence in reply to this opposition on 16 January 2014. The declarant states at paragraph 12 of his declaration that after completion of evidence in reply:
“… I reviewed the opposition file to see if the Statement of Grounds and Particulars needed updating in view of the Evidence in Reply. In a review of the file, I noticed that the amended Statement of Grounds and Particulars prepared by the attorney on 31 January 2013 (Exhibit JRG-2), had not actually been filed at IP Australia on that date, despite it having been mentioned in the letter from the second attorney to the opponent on that date (Exhibit JRG-3).”
18. The declarant duly filed a request to amend the SGP on 22 January 2014. This amendment included the amendments prepared by the second attorney in addition to amendments which were considered necessary in light of the evidence in reply. As discussed above, it is the inclusion of the new ground of utility to which the applicant objects.
19. In summary, the opponent submits that the declaration demonstrates the intention to include the ground of utility in the original statement and that it was inadvertently omitted by the attorney responsible (second attorney) at the time of filing of the original SGP. The opponent further submits a subsequent error occurred on behalf of the second attorney in failing to file the amended SGP of 31 January 2013.
Error or omission
20. The definition of an "error or omission" in the context of sec 160 of the Patents Act 1952 was expressed by Jenkinson J in Kimberly-Clark Ltd v Commissioner of Patents and Another (No 3) [1988] FCA 421; 13 IPR 569 at pages 579 to 580 in the following terms:
"It is in my opinion difficult to suppose that only the inadvertences and accidental steps, and not errors resulting from faulty reflection, of the former class of persons were intended by the draftsman to be within s 160(1). Further, the word "error" is not easily assigned a clear meaning restricted by reference to one or several particular categories of flawed mental function. The attempt is likely to lead to the drawing of fine and often unrealistic distinctions. And some fine errors of judgement by agents and attorneys may be as bizarre and as little to be anticipated as lapses of memory and accidental slips."
21. While Kimberly-Clark Ltd v Commissioner of Patents dealt with a different section of the former Act, these comments have been considered equally applicable to Regulation 5.9. The words "error or omission" in Reg 5.9 were considered in Biosys v Ecogen (above):
"The term "error or omission" has been considered many times in decisions concerning section 223 (and its equivalent, section 160 of the Patents Act 1952). I consider that it would be inappropriate to give a different meaning to the term "error or omission" when used in regulation 5.9(1)(a) (see D.C.Pearce and R.S.Geddes "Statutory Interpretation in Australia" 3rd edition, pages 65 to 67). Thus, it is apt to apply the following formulation: "an error or omission has been considered to have occurred where there has been a breakdown in procedure in effecting a party's intention" (Stork Pompen v Weir Pumps [1988] APO 7; 11 IPR 542 at 546; this point was not overturned in the decision of the AAT reported at [1988] AATA 331; 13 IPR 163). As a consequence, the intention of the party with respect to doing some act is an essential preliminary to the demonstration of an error or omission."
22. It is clear from Biosys v Ecogen that the meaning given to "error or omission" in decisions concerning section 223 of the 1990 Act and section 160 of the 1952 Act is relevant to regulation 5.9. It is also clear from Kimberly-Clark that the words "error or omission" should be given a broad meaning.
23. In Biosys v Ecogen it was noted that the intention of the party with respect to doing some act is an essential preliminary to the demonstration of an error or omission. Furthermore, Biosys v Ecogen confirms that “whether or not there has been an error or omission should be assessed by having regard to the actions and intentions of the opponent on or before the date of filing the [SGP]”. I am satisfied that this approach must be applied to the present case. As such I must consider whether the evidence demonstrates the requisite intention of the opponent to include the ground of utility in the SGP filed on 30 January 2012.
24. The submissions of the applicant comment on the requisite intention at the time the opponent filed the original SGP. The applicant submits that:
“The Green declaration does not provide any evidence relating to the Opponent's intention at the time it filed the [SGP]. The Opponent's reticence as to the nature and timing of its instructions suggests that the Opponent may not, in fact, have formed the requisite intention to include the ground of lack of utility... The Opponent suggests that the inclusion of the ground of lack of utility in the Statement filed in relation to the parent application somehow evidences the Opponent's intention to include the ground in the Statement for the present opposition. The inclusion of a ground in one [SGP] does not automatically lead to an inference that it was intended to be included in another [SGP]. Furthermore, it must be borne in mind that the Statement filed in relation to the parent application did not include any particulars supporting the ground of lack of utility, and the outline of submissions filed by the Opponent for the hearing of the opposition relating to the parent application did not include any submissions relating to a lack of utility… This suggests that the Opponent did not consider lack of utility an important ground of opposition in relation to the parent application, and in such circumstances, it is entirely possible that there was no intention to include this ground in the Statement filed in the present opposition.”
25. The opponent’s evidence relating to the intention at the time of filing the SGP constitutes declared statements indicating the attorneys were instructed to oppose the application on all of the grounds on which the parent application was opposed and that the responsible attorney inadvertently failed to do so. I accept there is no evidence in regard to the nature and timing of the instructions from the opponent. I am left to infer when these instructions were received. The usual practice of parties involved in an opposition is that instructions relating to the particular grounds of opposition are provided before filing of the SGP. As such, on the face of the declared statements alone, I think it is more reasonable to consider that these instructions were received before filing the SGP. This does not preclude the possibility that it is also open for me to believe that the instructions were received after the filing of the SGP. In order to determine which inference is ultimately most reasonable I will further consider the evidence and circumstances relating to the amendment to the SGP.
26. I have compared the SGP of the present application to the SGP of the parent application (Exhibit JRG-1). With particular regard to the grounds of opposition, the wording of the grounds of opposition in the SGPs is identical save for the claim numbering and exclusion in the present application of the ground of utility. This is consistent with the statement of the opponent that they were were instructed to oppose the application on all of the grounds on which the parent application was opposed.
27. The applicant discusses the failure of the SGP filed in respect of the parent to provide particulars regarding the ground of utility. While this fact suggests that the ground of utility raised on the parent applicant was open to dismissal I am not satisfied that this demonstrates a lack of intent to oppose the present application on the ground of utility. I accept that it may suggest that the opponent did not consider utility a particularly important ground of opposition but this does not got so far as to demonstrate that the opponent did not intend to raise the ground of utility. Similar can be said for the applicant’s suggestion in regard to the outline of submissions provided by the opponent before the hearing of the parent application which did not address the ground of utility. Thus I do not consider that these points detract from my initial inference that it is more reasonable to consider that the instructions were received before filing the SGP.
28. Finally, I refer to Exhibit JRG-3. As discussed above, this Exhibit is a letter from the second attorney to the opponent dated 31 January 2013 and discusses amendments to the SGP that were drafted by the second attorney. Relevantly, the letter refers to the addition of the new ground of utility and simply states:
“Lastly, we added a new ground of the lack of utility of the invention”. (my emphasis)
29. This reference to a new ground of opposition supports the possibility that the instructions to oppose the application on all grounds may have been provided after the filing of the SGP. However I consider that this statement does not detract from the inference that the opponent initially intended to include utility as a ground. The absence of any mention of an error or omission in the letter does not demonstrate that the particular amendment was not for correction of an error or omission. I think it is reasonable to believe that that the inclusion of the new ground is for the purpose of correcting an error, although not explicitly stated. Thus I remain satisfied that it is more likely that the instructions were received before filing of the SGP.
30. I am satisfied that the opponent possessed the requisite intent to oppose the application on grounds including that of utility. I consider that the issues discussed above do not weigh against the inference that the instructions were received before filing the SGP.
31. The applicant further submitted that:
“The Opponent does not provide any evidence of the nature of the "error or omission", except to say that the ground of lack of utility was "inadvertently omitted". There is no evidence of the attorney's intention, or how the omission took place. It is also not clear whether the omission relates to the failure to include only the ground of lack of utility, or whether it also includes an omission to provide any particulars in support of that ground.”
32. As discussed above, I am satisfied of the opponent’s intent. For similar reasons to those already discussed I am also satisfied that it is a reasonable inference that the second attorney “inadvertently omitted” to oppose the application on the ground of utility. The evidence and relating to the amendment to the SGP do not detract from a reasonable inference that an error occurred. Further, I see no reason to consider that the inadvertent omission of the ground of utility is not an “error or omission” under the broad definition. Finally, I do not consider it relevant whether the error or omission also included the failure to provide particulars in relation to the ground of utility as I need only ask the question according to paragraph 5.9(1)(a) as to whether the failure to include the ground of utility was an error or omission.
33. Therefore, I reasonably believe that the amendment to the statement of grounds and particulars corrects and error or omission by the opponent’s attorney. As I am satisfied of the facts that enliven the power to amend the SGP I must now determine whether it is appropriate in the circumstances to exercise that power.
Exercising of the Commissioner’s discretion
34. There appear to be a number of considerations relevant to the Commissioner’s discretion. I am satisfied that the considerations relevant to the exercise of this discretion reflect those of Kimberly-Clark Ltd v Commissioner of Patents (see also Domtar Inc v Westvaco Corporation [1997] APO 13; Emory University v Biochem Pharma Inc. [1996] APO 9; (1996) AIPC 91-242; 33 IPR 466). These include:
· the conduct of the opponent including any unreasonable delay by the opponent in correcting the error or omission and whether there has been a full and frank disclosure
· the interests of the parties
· the public interest
The conduct of the opponent
35. In regard to the conduct of the opponent it is relevant as to whether the opponent unreasonably delayed rectifying the error or omission. According to the declarant, the second attorney realised his initial error and prepared an amended SGP in January of 2013. It appears from the letter provided as Exhibit JRG-3 that the second attorney realised this initial error when reviewing the evidence in support. I am satisfied that a further error from this attorney or his secretary led to this amended SGP not being filed. The declarant assumed responsibility for the opposition in June of 2013. According to his declaration at paragraph 12 the declarant indicates that after completion of evidence in reply on 16 January 2014, he reviewed the SGP to see if it needed updating. It was at this point that he realised the second attorney’s failure to file an amended SGP. The declarant filed the amended SGP (which is the subject of this decision) on 22 January 2014.
36. Given the late stage of the opposition I think that the opponent’s actions have not been as prompt as they could have been. For example the opponent’s attorneys could have conducted reviews of the SGP at earlier stages of the opposition. However I do not consider it unreasonable that the opponent appears to have used the completion of evidence in support and evidence in reply as points in time at which to review the SGP. Thus I am satisfied that the opponent has not unreasonably delayed rectifying the error or omission.
37. I am satisfied that it could normally be expected that a request to amend under paragraph 5.9(1)(a) should include a full and frank disclosure of all the relevant circumstances. Such a requirement should not be said to be imperative but should be taken into account along with all of the other factors relevant to the Commissioner’s discretion. I accept that the initial application for amendment to the SGP was completely lacking in that it did not provide any information relating to an error or omission in regard to the ground of utility. However, I am satisfied that the evidence filed by the opponent is sufficiently full and frank.
38. The declaration provided by the opponent is frank in stating the intentions of the opponent however I acknowledge that the information provided by the opponent is rather limited. The opponent has not provided any evidence relating to file notes, emails or other documentation relating to the instructions received by the attorney. However, on the face of the information before me I have no particular reason to believe that further information relevant to the “error or omission” is available. Also I do not consider there to be any inconsistencies in the information provided by the opponent. Thus I am satisfied that the disclosure is sufficiently full and frank to justify the exercise of the commissioner’s discretion.
Interests of the parties
39. With particular regard to the applicant it is clear that there is a degree of inconvenience in that they must now address the ground of utility either by way of submissions or evidence. The opponent’s interest clearly lies in being able to oppose the application on the ground of utility. The applicant’s task of addressing this ground by way of submissions and evidence does not appear to be particularly onerous. The ground is well particularised and there does not appear be any evidence in support or reply directed towards a lack of utility. Therefore, I am satisfied that the interest of the opponent outweighs that of the applicant.
The public interest
40. The applicant submitted that in addition to the determination of an opposition on its merits the public interest involves such factors as the orderly conduct of patent opposition proceedings and the delay in resolution of the patent opposition. In the present situation, I accept that it is undesirable for new grounds to be raised at such a late stage of the opposition (in this case after evidence in reply). Also I am satisfied that there is likely to be a delay arising from the allowance of the amendment as the applicant seeks to address the newly raised ground. Both of these factors must weigh against the potential exercise of the Commissioner’s power.
41. On the other hand, the public interest is served by an opposition being determined on its merits, and in this regard I am satisfied that there is a public interest in having all grounds of opposition before the Commissioner for determination at the hearing. I am satisfied from the associated particulars (which detail an allegation of lack of utility against claim 2) provided in the amended SGP, that the ground of utility warrants consideration at a hearing. I consider that this interest outweighs the fact that the conduct of the opposition has been to a degree disorderly and also any short delay caused in providing the applicant opportunity to respond. Thus I am satisfied that the public interest favours allowance of the amendment to the SGP.
Conclusion
42. I reasonably believe that there was intent of the opponent to include utility in the SGP filed on 30 January 2012 and that this did not occur because of an error or omission. Thus I am satisfied that the opponent has demonstrated the facts that enliven the power to amend.
43. In taking into consideration the relevant factors I am also satisfied that the circumstances that justify the exercise of that power. In this regard I consider that the opponent’s disclosure is sufficiently full and frank and that there have been no unreasonable delays in seeking amendment. I consider the interest of the opponent over that of the applicant favours the exercising of the Commissioner power to amend, as does the public interest. The public interest involves consideration of the orderly conduct of proceedings and associated delays in resolution of opposition matters which in this case weigh against allowance. However in this case I think these public interest considerations are outweighed by the public interest in having the opposition determined on its merits in regard to all possible grounds.
44. Having regard to the considerations that are relevant to this matter, the balance falls towards allowing the amendment to the SGP. I hereby allow the amendment. In accordance with Regulation 5.9(4), a copy of the statement as amended will be given to the applicant.
Terms of the amendment
45. In accordance with Regulation 5.9(1), should the Commissioner amend the statement, whether to amend the grounds or any particular, he/she may do so subject to any terms as the Commissioner may specify. The parties submitted that in the event of allowance of the amendment the Commissioner could provide a period for the applicant to file evidence in regard to the new ground of utility. I am satisfied that such a period should be provided.
46. The applicant has indicated that a period of at least three months should be provided to prepare and file further evidence. As the scope of the issues to be addressed by this further evidence should be focused on the new ground of utility I am not satisfied that three months is required. Instead I am satisfied that one month is sufficient. I do not consider it necessary to provide a period to the opponent to file further evidence in response as I believe the opponent has had an opportunity to file evidence in regard to the ground of utility as evidence in support. Additionally the opponent has not indicated a need to file any further evidence.
47. I direct that the applicant has one (1) month from the date of this decision to file further evidence.
Costs
The initial explanation provided by the opponent to justify the extension of time was severely lacking. No discussion of any error or omissions was provided in the application to justify the inclusion of the new ground of utility. In fact the new ground of utility was not even discussed in the application which stated that the reasons for the amendment were:
“To amend the Statement of Grounds and Particulars to include further documents brought to light in the preparation of evidence.”
Although it is normal for costs to follow the event, I believe I can adopt the approach taken in a similar situation where an application for extension of time as filed is inadequate, and the extension is subsequently granted on the basis of information provided at the time of the hearing. In such a situation the party objecting to the application was justified in their objection and should not be penalised by an award of costs against them. This approach was adopted in Apotex Pty Ltd v Les Laboratoires Servier [2012] APO 91, for instance. I see no reason to depart from this approach given the facts before me. The opponent has been successful on the basis of new information provided in written submission. Considering the lack of information given in the initial application, the applicant was justified in objecting to the amendment to the SGP, and the award of costs should not penalise them. It is appropriate to make no award of costs.
Dr N. R. Madsen
Delegate of the Commissioner of Patents
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