Innovia Security Pty Ltd v Visual Physics LLC
[2014] APO 15
•5 March 2014
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Innovia Security Pty Ltd v Visual Physics LLC [2014] APO 15
Patent Application: 2010226869
Title:Micro-optic security and image presentation system
Patent Applicant: Visual Physics LLC
Opponent: Innovia Security Pty Ltd
Hearing Officer: P M Spann, Deputy Commissioner of Patents
Decision Date: 05 March 2014
Hearing Date: Written submission completed 29 January 2014
Catchwords: PATENTS – extension of time to file evidence in reply – reg 5.9 – whether applicant has acted promptly and diligently at all times – whether circumstances beyond control – extension refused.
Representation: Patent applicant: Shelston IP
Opponent:Watermark
IP AUSTRALIA
AUSTRALIAN PATENT OFFICE
Patent Application: 2010226869
Title:Micro-optic security and image presentation system
Patent Applicant: Visual Physics LLC
Opponent: Innovia Security Pty Ltd
Date of Decision: 05 March 2014
DECISION
Extension of time refused.
REASONS FOR DECISION
This matter concerns a request for an extension of time to file evidence in reply and is determined under regulation 5.9 of the Patents Regulations as amended on 15 April 2013 by the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No 1).
Background
Patent application 2010226869 was filed by Visual Physics LLC (Visual) on 30 September 2010 as a divisional of 2004294182.
The present application was advertised as accepted on 17 November 2011 and a notice of opposition to the grant of a patent was filed in the name of Securency International Pty Ltd on 17 February 2012. A statement of grounds and particulars was served and filed on 17 May 2012 and the evidence in support completed on 24 May 2013 after several extensions of time were obtained. The opponent advised the Commissioner of its change of name to Innovia Security Pty Ltd (Innovia) on 19 March 2013.
Visual on 8 August 2013 filed a request to amend the complete specification together with a request for the Commissioner to stay the opposition proceedings. The latter request was refused. On 22 August 2013 Visual filed a further statement of proposed amendments and it then completed its evidence in answer on 26 August 2013. As a consequence Innovia was required to file an intention to file evidence in reply by 26 September 2013.
On 8 August 2013 Innovia requested a delay in the period for filing evidence in reply pending the outcome of the amendment request. Visual opposed that request and ultimately the delegate refused it finding that the scope of the proposed amendments did not warrant a delay in the filing of evidence.
Innovia filed notice of its intention to file evidence in reply on 26 September 2013. Consequently evidence in reply was due by 26 November 2013. It filed a declaration by Dr Hardwick as part reply evidence on 25 November together with a request for an extension of time of two months for the completion of its evidence. The delegate however was not convinced that an extension was justified and on 29 November 2013 invited Innovia to address the concerns that he had raised. Innovia responded to that invitation on 6 December 2013 but on 16 December the delegate notified the parties of his intention to refuse the request, subject to the parties requesting a hearing.
On 23 December 2013 Innovia requested a hearing and filed written submissions on 29 January 2014. Visual also requested to be heard in opposing the extension and also filed its written submissions on 29 January. I will refer to the parties' submissions as necessary in my reasons below.
On 3 January 2014 Innovia filed a further declaration by Dr Hardwick which is says completes its evidence in reply.
The law
As the period for filing evidence in reply commenced after 15 April 2013, this request is to be determined under regulation 5.9 as amended on 15 April 2013 by the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No 1) – See subregulation 23.26(2)(Item 2). That item also provides that the reference in subregulation 5.9(1) to regulation 5.8 is taken to be reference to regulation 5.8 as in force before 15 April 2013 and paragraph 5.10(1)(b) and subregulation 5.10(2) as in force before 15 April 2013 are taken not to apply.
Consequently while the present opposition was filed before 15 April 2013, and generally is governed by the provisions of Chapter 5 of the regulations that applied before that date, extensions of the time for filing the evidence in reply are governed by the new scheme reflected in regulation 5.9 as in force from 15 April 2013.
Subregulation 5.9(1) gives the Commissioner the power to extend the evidentiary time periods:
The Commissioner may extend an evidentiary period mentioned in regulation 5.8:
(a) if requested in writing by a party; or
(b) on the Commissioner's own initiative.
The power to extend time is discretionary, as evidenced by the use of the word "may". This power is qualified by subregulation 5.9(2), which states:
The Commissioner may extend the period only if the Commissioner is satisfied that:
(a) the party who intended to file evidence in the period:
(i)has made all reasonable efforts to comply with all relevant filing requirements under this Chapter; and
(ii)despite acting promptly and diligently at all times to ensure the appropriate evidence is filed within the period, is unable to do so, or
(b) there are exceptional circumstances that warrant the extension.
Exceptional circumstances are defined in subregulation (5):
In this regulation:
exceptional circumstances includes the following:
(a) a circumstance beyond the control of a party that prevents the party from complying with a filing requirement under this Chapter;
(b) an error or omission by the Commissioner that prevents a party from complying with a filing requirement under this Chapter;
(c) an order of a court, or a direction by the Commissioner, that the opposition be stayed pending the completion of a related proceeding or action under the Act.
Consequently the relevant questions are :
- Has the party (and their attorney or agent) made all reasonable efforts to comply with all relevant filing requirements?
- Was the failure to file the evidence in time despite the party (and their attorney or agent) acting promptly and diligently at all times to ensure the evidence is filed in time?
- Were there exceptional circumstances that warrant the extension?
I can extend the time for filing evidence only if I am satisfied that the answer to questions i and ii is YES, or if I am satisfied that the answer to question iii is YES. If I am so satisfied, then I must consider whether there are any discretionary reasons why the extension should not be granted.
The request
The circumstances relevant to Innovia’s efforts to file evidence in reply within the statutory period can be summarised as follows:
a)The evidence in answer was completed on 26 August 2013.
b)On 4 September Innovia’s patent attorneys (Watermark) met with Dr Hardwick. He was given the evidence in answer and asked to provide comments by end of September. Dr Hardwick indicated that he would be overseas on business during September and was apparently unavailable from 15 September to 2 October 2013.
c)Dr Hardwick again met with Watermark on 14 October 2013 to discuss “several oppositions” and indicated that he would be overseas on business from late October to early November, in the event from 18 October to 4 November.
d)On 16 November 2013 Dr Hardwick met with Watermark to discuss the evidence in answer. Part of that evidence (the Mann declaration) was reviewed but review of other evidence (the Radclyffe declaration) was not completed. Dr Hardwick indicated he would not be available for further meetings from 11 November to 2 December but should be able to complete a declaration in response to the Mann declaration by email.
e)Several communications occurred between Watermark and Dr Hardwick in the latter part of November. Part evidence in reply responding to the Mann declaration was filed 25 November 2013 together with the present extension of time application.
Other circumstances said to be relevant are the amendments proposed by Visual, the attempts by Innovia to obtain a stay of the proceedings in light of the amendments and efforts by the parties to settle the proceedings. I will address these matters as appropriate below.
Has Innovia made all reasonable efforts to comply with all relevant filing requirements?
It is clear that the requirement in paragraph 5.9(2)(a)(i) is intended to import a consideration of the reasonableness of the relevant party’s conduct over the totality of the opposition proceedings rather than its compliance with the particular evidentiary period in question – here the period for filing evidence in reply – which is addressed by the more specific requirement of paragraph 5.9(2)(a)(ii).
Innovia’s conduct in obtaining evidence in support is clearly relevant. Having obtained four extensions of time amounting to 10 months under the former generous extension of time provisions, with, in my view, quite scant justification, it might be thought that grounds exist to question whether that conduct was reasonable. However, there is a clear distinction between the requirement for “reasonable efforts” and “acting promptly and diligently at all times”. What is reasonable in relation to a former evidentiary period was what was reasonable at that time. This includes efforts towards settlement of the opposition which were, under the former legislation, accepted at least in limited circumstances to justify a short extension. The fact that the Commissioner granted the extensions of time is also significant such that I should assume that, at the time, Innovia were considered to be making reasonable efforts to meet the time for filing evidence in support.
Consequently I consider the requirement of 5.9(2)(a)(i) to be met in relation to filing requirements other than the filing of evidence in reply. If I find that Innovia has been prompt and diligent in relation to the evidence in reply it will also have made all reasonable efforts and therefore I do not need to consider further whether Innovia has made all reasonable efforts to comply with all relevant filing requirements
Was the failure to file the evidence despite acting promptly and diligently at all times?
There are a number of relevant factors that are cited as preventing the evidence being filed despite Innovia acting promptly and diligently at all times. These include the availability of the expert Dr Hardwick and the fact that he was involved in multiple oppositions. There is also the need for Watermark to carry out other work in relation to the opposition including addressing the amendments proposed by Visual. However, while work needing to be carried out by Innovia’s expert and patent attorneys not directly concerning the obtaining of evidence is relevant to whether it acted diligently, it is only relevant to the extent that it caused delay in the preparing evidence. Delays that might have occurred by waiting for the outcome of other processes whether submissions to IP Australia or offers to settle are not matters that prevented work to be carried out on the evidence but reflect decisions not to carry out the work in the expectation that it could be delayed or, in the case of settlement, avoided. Such delays are not in my view consistent with acting promptly and diligently in the preparation of the evidence as required by the legislation.
In this regard the Explanatory Statement accompanying the Intellectual Property Legislation Amendment (Raising the Bar) Regulation 2013 (No 1) states at page 19 that:
“In applying the test, the Commissioner will not be required to give a direction to extend a period solely because of delays caused by a legal representative failing to act promptly or diligently, by difficulties in obtaining expert evidence that could have been anticipated and acted on or by attempts to settle the proceedings”
In relation to Dr Hardwick, it is certainly appropriate for Innovia at reply stage to rely on an expert who has made a declaration filed as evidence in support and some accommodation needs to be made for the availability of such an expert. He however was unavailable overseas for 36 days out of the 3 month evidentiary period and it is reasonable to expect that a diligent party could have made significant progress in the review of two relatively short declarations in the remaining time.
While there is a suggestion in Innovia’s letter of 6 December 2013 of Dr Hardwick’s involvement in the preparation of evidence in another opposition and a lack of “bandwith” to consider the present matter in October, I find there is insufficient evidence of the effort required to be allocated to those tasks and their urgency to be satisfied that the preparation of the evidence was pursed promptly and diligently. Rather there appears to have been no activity in significant periods of the chronology without any real explanation.
Consequently I am not satisfied that Innovia’s failure to file all its evidence in reply within the statutory period was despite acting promptly and diligently at all times.
Were there exceptional circumstances that warrant the extension?
Innovia’s submissions focus on three matters which it says constitute exceptional circumstances for the purpose of subregulation 5.9(2)(b):
· There was an error or omission by the Commissioner in refusing to grant a stay in the proceedings after the filing of two sets of amendments by the applicant on 8 August 2013 and 22 August 2013.
· Leave to amend the specification has not yet been granted, refused or withdrawn, and the amendments have not even been advertised for opposition purposes. In the meantime, the evidence in reply has been completed by the filing of a second declaration by Bruce Alfred Hardwick on 3 January 2014, and so the grant of an extension would not result in a prolongation of the opposition proceedings.
· It is in the public interest that the extension of time is granted.
I consider these submissions to be misconceived. While not exhaustive, subregulation 5.9(5) clearly indicates in relation to Commissioner error or circumstances beyond control that relevant circumstances are those that "prevents the party from complying with a filing requirement under this Chapter". Here there is simply insufficient evidence for me to accept that the Commissioner failing to grant the stay sought by Innovia prevented the evidence being filed in time. It may be that the amendments sought by Visual have complicated the opposition proceedings generally but that does not mean that there are exceptional circumstances that justify an extension of the evidence in reply period. Nor is this an opportunity to review the delegate's decision to refuse the stay.
The question of an extension not prolonging the opposition and the public interest are discretionary factors in the granting of all extensions and are not exceptional circumstances. As indicated above, it is a feature of the amended legislation that discretionary considerations do not apply unless the Commissioner is satisfied that the requirements of subregulation 5.9(2)(a) or(b) are met. This is abundantly clear from regulation 5.9 itself but, if there is any doubt, the Explanatory Statement at page 19 states:
“New subregulation 5.9(2) addresses this issue by introducing a new test for determining whether an extension of time for filing evidence is justified. The Commissioner will not be able to extend time periods unless at least one of these conditions was made out. The party seeking the extension will bear the onus of convincing the Commissioner of this. Once the conditions in subregulation 5.9(2) are met, the Commissioner still has the discretion to consider whether or not it is appropriate that an extension of time be granted.”
Consequently I do not consider that there are exceptional circumstances that warrant the extension of time.
Conclusion
I am not satisfied that the evidence in reply was not filed in the prescribed period despite Innovia acting promptly and diligently at all times. I am also not satisfied that there are exceptional circumstances that warrant the grant of a further extension of time.
As a result, the period for filing evidence in reply ended on 26 November 2013 and I direct that the declaration filed on 3 January 2014 is not evidence in reply in relation to the opposition.
However, being in relation to an opposition filed before 15 April 2013, Innovia may make an application for leave to file the declaration as further evidence under subregulation 5.10(4) as it existed before 15 April 2013. I make no comment on the prospects of success for such an application other than that it will be considered on its merits. Otherwise, the declaration may be information that the Commissioner takes into account under regulation 5.11 as it existed before 15 April 2013. Again this will be a decision for the Commissioner to make at the relevant time.
Costs
I award costs in accordance with Schedule 8 of the Patents Regulations against the opponent Innovia.
P M Spann
Deputy Commissioner of Patents
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